Dispelling the Myth About Reverse Mortgages

What have you heard about Reverse Mortgages?

If I wrote you a check today for $50,000 and told you that you do not have to make monthly payments, what would you do with that money?

• Supplement your income?
• Buy a new car, truck or motor home?
• Replace lost income due to the death of a spouse?
• Hire a caregiver to avoid nursing home?
• Pay off debts?
• Help your grandchildren?
• Create a larger estate for your heirs?

Why Are More Seniors Taking a Closer Look at Reverse Mortgages?

• They want to maintain their dignity and independence.
• They want to improve their quality of life.
• They are living longer and outliving their incomes.
• Medical and prescription costs continue to increase at a staggering rate.
• They want to protect themselves from lost social security and retirement income once the first spouse has passed away.
• They want to have the ability to afford at-home healthcare and avoid the dreadful nursing home costs.
• They want to fix-up their homes or want cash for needed home repairs.
• They want to eliminate monthly mortgage payments.
• They want to buy a new car, truck, or motor home to travel and enjoy life.
• They would like to create a larger estate for their heirs with proper estate planning.
• They do not want to be a financial burden on their children.
• Many are forced to or must return to work because of losses in the stock market and lack of proper retirement planning

What is a Reverse Mortgage?

This is a unique loan called a Home Equity Conversion Mortgage or “HECM” designed for seniors that are 62 years of age and older. It allows you to get equity out of your home in the form of monthly income, an equity line of credit or immediate cash, tax-free, to use for any reason or goal you have, without ever having to make a payment on the loan, as long as you live in your home.

If you live in your home until your death, your heirs will have the choice to pay off the loan or sell your home and keep the remaining equity.

Is a Reverse Mortgage Safe?

Yes! FHA fully insures your loan and guarantees that no debt ever passes to your heirs, above & beyond what the home is worth.

HUD participates in regulating the program and the industry to protect you, therefore, all reverse mortgage applicants must complete a HUD counseling session which we can help you set up.

In 2001, Congress passed legislation making Reverse Mortgages a permanent government program.

What are some of the features, advantages, and benefits of a Reverse Mortgage?

• You keep title to your home.
• You can keep your home in a living trust.
• All income is Tax-Free.
• No restrictions on how you use the funds.
• Make no payments while living in your home.
• You cannot outlive the loan.
• There are NO charges to your property taxes.
• Guaranteed by the U.S. Department of Housing (HUD).

What are my responsibilities?

• You are responsible to keep the Insurance and Taxes paid on your home.
• All property liens, if any, must be paid from the proceeds of the Reverse Mortgage.
• You must continually occupy your home (cannot be gone for more than 1 year at a time)
• You must maintain the home.

How Do I Qualify?

• You and your partner are age 62 or older.
• Have enough Equity in your home.
• Plan to keep your home as your Primary Residence.

A Reverse Mortgage has:

• No financial qualifications.
• No monthly payments as long as you live in your home.
• Lower interest rates set by HUD.

How much money will I be eligible for?

Each county in every state has a lending limit on appraised values which are set by the Federal Government.

From that lending limit, your age, the current interest rates, and the equity in your home, we can determine how much you will be eligible to receive. The older you are the more you may receive.

How do I receive the money?

• Leave the money in the HUD program and take monthly payments to supplement your income;
• Leave the money in the HUD program and take funds when you need them like a Home Equity Line of Credit;
• Take all available funds as a “Lump Sum” disbursement:
• Or a combination of the above.

What about your heirs/children?

• Do they want to inherit your home free and clear OR do they want you to enjoy the most income possible today?
• Most children want their parents to live at the highest standard of living possible.
• They want their parents to maintain their dignity and independence.
• When you do pass away, your children will receive the remainder of your estate once the loans are paid off.

What are the next steps?

1) Contact our team to run an analysis to show you what you qualify for based on your specific information.

2) Have our team help you set up your free HUD Counseling appointment.

3) You and our team will call to set up your application appointment with the Reverse Mortgage Specialist.

4) Review the required documentation needed to start the application once your HUD Counseling appointment is complete.