What would you do with an Extra $239,000?•Pay-off Debts•Supplement your income•Help Children and/or Grandchildren•Create a Larger Estate for Heirs
What if you could get a Mortgage Loan with these features!• No financial qualifications• No monthly payments as long as you live in the house• Competitive market interest rates• Little or No out of pocket costs to establish• FHA or FNMA programs• Never a chance of foreclosure
The Reverse Mortgage• Can turn your “nest” into a “Nest Egg”• Turn your home equity into monthly income• Payoff current mortgages• Make home repairs• Payoff credit card or other debt All With No Payments As Long As You Live In The Home
With The Reverse Mortgage• You must be age 62 or older (both)• Have your home mostly paid off• Plan to live there the rest of your life• Need or want extra cash or income• Receive HUD counseling• Pay for an appraisal (around $450.00)
Questions We Often Hear• What is a Reverse Mortgage?• Who backs this program?• Why are so many seniors doing this?• How does it effect property taxes• Will my heirs be upset?• What is the process?• How do I make my proceeds work for me?
What is a Reverse Mortgage?Officially it is called a Home Equity Conversion Mortgage “HECM” for short. This is a unique loan designed for Seniors 62 and older. It allows you to get equity out of your home to provide current income or any other goal you may have, without ever having to make a payment on the loan as long as you live in the home. If you live in the home until your death, your heirs will have the choice to pay off the loan or sell the home and keep any equity that is left.The mortgage company “Pays You”, instead of you paying them!
Who Backs This Program?• FHA fully insures the loan and guarantees that no debt ever passes to your heirs.• HUD participates in regulating the program and the industry to protect the seniors.• All seniors must complete a HUD counseling session.• Congress passed legislation making Reverse Mortgages a permanent program.
Why Are More Seniors Doing Reverse Mortgages?• They are living longer and outliving their incomes• They want increased buying power• They need more flexibility in the budget• They want to remain independent, and don’t want to rely on children financially• They want no more mortgage payments• They want to help their children or provide for grandchildrens education• They want to travel and enjoy retirementCan you think of few reasons yourself?
More Reasons Seniors Doing Reverse Mortgages ….• Financial Difficulties• Need more income• Health problems and/or Medical bills• Living on fixed income but expenses keep increasing• Drop in income for loss of spouse• Drop in investment income or loss• Can’t keep up with payments in the house• Senior needs in-home care or a live-in
How Does A Reverse Mortgage Affect Property Taxes?• No changes at all!• You are responsible to keep the insurance and taxes paid on your home• Prior to the Reverse Mortgage any past due taxes would have to be paid
How Does A Reverse Mortgage Affect Social Security?• Does not affect Social Security or Medicare benefits.• Medicaid (needs-based Welfare) maybe effected in you build up cash resources• It may count against income and disqualifies you for Food Stamps
How Do You Qualify?• You must own your home• It must be free and clear or have a small mortgage balance• You must be 62 or older• Get a HUD Counseling Certificate• Pay for an appraisal and inspection
Could I Lose My Home?• No, you keep title to your home• You keep your Homestead Exemption• You must occupy your home• You can keep the home in a Living
How Safe Is The Reverse Mortgage ?• HECM is the safest mortgage you can get• You cannot outlive the loan• Cannot be made to make any payments, as long as you live in the house• Guaranteed by F . H. A.• You will never pay a penny, as long as you• live in the home
Reverse Mortgage vs. Home Equity LoanReverse Mortgage Home Equity Loan• No-Income Requirement • Yes-Income Requirements• No-Monthly Payments • Yes-Monthly Payments• No-Foreclosure Possible • Yes-Foreclosure Possible• No-Credit Required • Yes-Credit Required• No-Risk To Other Assets • Yes-Other Assets At Risk• You Retain Control • No Control
How Much Can I Receive? Based on a home value of $400,000.00 Initial interest rate of 6.56%*$195,000. $230,000. $265,000. Age 65 Age 75 Age 85 As of Dec 31, 2005, based on the younger spouse’s age Get a quote from us to see how much you can receive! * The creditline growth rate above is based on todays interest rates. Actual growth in your available creditline will vary with future changes in rates.
What Are My Options With The Money?• Just take monthly payments to supplement your income• Take funds when you need them like a Home Equity Line of credit• Take the full amount of cash and control where it is invested and when and how it is used
Our Recommendation Take the lump sum and control it• This way it is portable• You can avoid probate• You can have an income for life• You can increase your estate• You can leave an estate for heirs
What Will My Heirs Say?• It depends on if they want you to enjoy the most income possible.• Most children want their parents to live at the highest standard of living possible.• They want their parents to be independent.• When the parents do ultimately pass away the children are happy to get what ever is left. What do you think your children want for you?
How Do I Get Started?• Answer a few simple questions and we can get you a quote from the lender showing how much money you can get• If you want to proceed from there, pay for an appraisal and inspection• Make any repairs needed to bring your home up to FHA standards (paid for from the loan)• Collect your equity and invest it safely
Are You Ready To Turn Your Nest into A Nest Egg? $$$$$$$$$$$
I am licensed to offer some unique investment vehicles but that part of my service is completely separate from the Reverse Mortgage. Would you like a recommendation on how to invest the lump sum?
How could I Make My Proceeds Work Best For Me?• Funds can be placed in a special approved annuity• This annuity is fully guaranteed and is one of the few vehicles that HUD recognizes as safe for seniors• Your annuity can be issued with a checkbook• You can take interest only or interest and principal• You can create an income you cannot out live• It avoids probate and protects funds from creditors• Any balance left passes to your heirs
Guaranteed Return Annuity• Portable• Safe• Guaranteed• Market Returns with no risk• Multiple interest crediting strategies• Checkbook access• Income you cannot outlive• Issued by an “A” rated company