Citing the desire among many older homeowners to leave their homes to members of their family, New Jersey-based reverse mortgage lender and servicer Longbridge Financial has announced a new proprietary reverse mortgage product that aims to help borrowers preserve home equity for their heirs.
The latest offering in the company’s Platinum line of proprietary reverse mortgage products, Platinum Preserve is a variation of the company’s Platinum Max loans. That product is a non-Federal Housing Administration (FHA) reverse mortgage program with a minimum age requirement of 55 in some states.
“This new feature is designed to help senior homeowners tap into their home equity now while reserving a portion for future needs, offering a balanced approach to immediate and long-term financial planning,” the company said Tuesday when announcing the product.
Longbridge CEO Chris Mayer discussed some of the dynamics that led to the product’s development. This includes the often-expressed reluctance of older homeowners to tap into home equity in retirement out of fear that it will limit the assets they can leave their heirs.
“Older homeowners have built up nearly $14 trillion in home equity, yet many are hesitant to tap into it because they want to use some of that wealth for their families or future health care needs,” Mayer said.
“A 2024 Freddie Mac survey found that 75% of baby boomer homeowners plan to leave their home or its value to their children or heirs. Other homeowners may want to preserve some portion of their home equity to downsize, pay for future health care needs or give money to a charity that is important to them.”
To that end, the new reverse mortgage product will allow Longbridge to offer the senior cohort an option to tap some of the equity in their homes while “still preserving a meaningful portion for the future,” Mayer said.
“Whether they’re looking to pay off an existing mortgage, supplement retirement income, help pay for rising insurance premiums or simply create some breathing room, borrowers can do it with confidence that they’re not giving up what matters most,” he said.
Platinum Preserve is a fixed-rate reverse mortgage that gives borrowers the option to choose the amount of loan proceeds they can access, as opposed to accessing the full amount of proceeds. The loan also does not maintain an upfront mortgage insurance premium, which can bring the costs down, according to Longbridge.
“Setting aside 10% to 40% of a borrower’s home equity can help provide peace of mind, enabling homeowners to maintain financial control and plan confidently for any future financial needs,” the company said of the new product.
That flexibility could allow for some financial planning through use of a reverse mortgage “without compromising long-term financial goals.”
Platinum Preserve launched Tuesday with availability in 21 states: Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Missouri, Montana, Nevada, New Hampshire, New Jersey, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah and Virginia.
The company said that rollouts in additional states are planned for the future.
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