Reverse Mortgage Seminar


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Reverse Mortgage Seminar

  1. 1. More commonly known as the Reverse Mortgage The HECM (Home Equity Conversion Mortgage)
  2. 2. What is a Reverse Mortgage? <ul><li>A federally insured program that allows home owners the ability to convert a portion of there homes equity into TAX FREE money. </li></ul><ul><li>This money can be used for ANY purpose, without ever making a mortgage payment. </li></ul>
  3. 3. Reverse Mortgage Benefits <ul><ul><li>Increase Monthly Cash Flow </li></ul></ul><ul><ul><li>Eliminates Mortgage Payment </li></ul></ul><ul><ul><li>Replenish Savings </li></ul></ul><ul><ul><li>Be prepared for emergencies </li></ul></ul><ul><ul><li>Pay off consumer debt </li></ul></ul><ul><ul><li>Receive monthly income (tax-free) </li></ul></ul><ul><ul><li>Become financially independent </li></ul></ul><ul><ul><li>Visit family & friends more often </li></ul></ul><ul><ul><li>Create investment opportunities </li></ul></ul>
  4. 4. Is a Reverse Mortgage Safe? <ul><li>YES! FHA fully insures the loan and guarantees that no debt ever passes to the heirs, above & beyond what the home is worth. </li></ul><ul><li>HUD participates in regulating the program and the industry to protect seniors, therefore, all reverse mortgage applicants must complete a HUD counseling session. </li></ul><ul><li>In 2001, Congress passed legislation making Reverse Mortgages a permanent government program. </li></ul>
  5. 5. How is this possible? <ul><li>Up front Mortgage Insurance Premium </li></ul><ul><li>Losses to the lender are protected by insurance and HUD/FHA </li></ul><ul><li>Lender is just deferring interest for a later date </li></ul><ul><li>Client benefits by borrowing homes equity without making a payment </li></ul>© Al Arciniaga 2008 Telephone (888) 951-3279
  6. 6. How Does A Person Qualify? <ul><li>All Persons on Title Must be at least 62 years age </li></ul><ul><li>Have Enough Equity in your Home. </li></ul><ul><li>Home must be Primary Residence . </li></ul>A Reverse Mortgage has: <ul><li>NO Income Qualifications. </li></ul><ul><li>NO Credit Qualification </li></ul><ul><li>NO Monthly Payments </li></ul>
  7. 7. How a Reverse Mortgage Works <ul><li>Maximum Claim amount is Calculated by Age, Home Value, and Interest Rate </li></ul><ul><li>Borrow against home equity </li></ul><ul><li>Must pay off existing mortgage(s) </li></ul><ul><li>Homeowners Retain Ownership /Title just like a Regular Mortgage with a Lien. </li></ul><ul><li>Requires Reverse Mortgage Counseling by HUD/FHA Approved Counselor </li></ul>
  8. 8. Reverse Mortgage Facts <ul><li>Must be first lien / no other liens on property </li></ul><ul><li>Leftover home equity goes to owners or heirs </li></ul><ul><li>Must be a primary residence property </li></ul><ul><li>Federal, State or title liens must be paid </li></ul><ul><li>Not necessary to pay collections at closing </li></ul><ul><li>May be in mortgage default or foreclosure </li></ul>
  9. 9. Reverse Mortgage Example <ul><li> Example: </li></ul><ul><ul><li>62 years old, Value $285,000 = $178,125 Principal Loan Limit </li></ul></ul><ul><ul><li>75 years old, Value $285,000 = $208,620 Principal Loan Limit </li></ul></ul>
  10. 10. Typical Retirement Assets
  11. 11. HECM Product Features <ul><li>Disbursement Options: </li></ul><ul><ul><li>Cash at Closing </li></ul></ul><ul><ul><li>Line of Credit </li></ul></ul><ul><ul><li>Tenure (Fixed for Life) </li></ul></ul><ul><ul><li>Term (Fixed for a specific Period) </li></ul></ul><ul><ul><li>Combination of these </li></ul></ul><ul><ul><li>(Note: Borrower may change disbursement options at any time) </li></ul></ul>
  12. 12. Other Key Facts <ul><li>No monthly payments…Really! </li></ul><ul><li>Non-Recourse Loan </li></ul><ul><ul><li>Lender recovery is limited to the collateral </li></ul></ul><ul><li>Borrower must maintain property taxes & homeowners insurance </li></ul><ul><li>Interest accrues during the life of the loan </li></ul>
  13. 13. This is to expensive! <ul><li>A Common Misconception is that the Reverse Mortgage is too Expensive. When in fact it is very similar in cost compared to the standard FHA mortgage. </li></ul><ul><li>The Fees will be different for each mortgage amount. In order to get an accurate estimate on your fees the best thing would be to meet with us one on one. </li></ul>
  14. 14. Reverse Mortgage Summary <ul><li>Eliminate Largest Monthly Expense </li></ul><ul><li>Funds Can Provide a Monthly Income and or Liquid Reserves for any Purpose </li></ul><ul><li>Reverse Mortgages Money is a Home Loan: </li></ul><ul><ul><ul><li>Generally considered State and Federal Tax Exempt (See your Tax professional for tax advise) </li></ul></ul></ul><ul><ul><ul><li>Funds from Reverse mortgages do not effect Social Security or Medicare (Note: Consult the appropriate </li></ul></ul></ul><ul><ul><ul><li>government agency for Medicaid monthly asset regulations) </li></ul></ul></ul>
  15. 15. What's Next? <ul><li>Schedule a time to meet (each situation is unique) </li></ul><ul><li>Determine homes value </li></ul><ul><li>Get a quote of your specific figures and fees. </li></ul><ul><li>Determine if it benefits your situation </li></ul>© Al Arciniaga 2008 Telephone (888) 951-3279
  16. 16. Thanks for Coming! <ul><li>We will be holding another seminar </li></ul><ul><li>In St. George, Wednesday, February 10 th , 11:30 @ the Golden Corral </li></ul><ul><li>Invite Your Friends and Family! </li></ul>