reverse mortgage for home purchases[1]
Post on 07-Nov-2014
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Reverse mortgage for home purchasesA new financing opportunity for purchase transactions.
Carlos A. Camargo Reverse Mortgage Specialist
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Trusted leadership you can count on -meeting the needs of senior homeowners
As the nation’s leading retail originator of reverse mortgages, Wells Fargo is committed to helping seniors age 62 or older use the equity in their homes to realize financial independence and peace of mind.
Now with the new reverse mortgage for purchase program, count on Wells Fargo to help provide a new home financing option.
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Table of contents
What is a reverse mortgage?
What is the Home Equity Conversion Mortgage (HECM) for Purchase?
How can it help senior homebuyers?
Examples of a HECM for Purchase transaction
Frequently asked questions
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What is a reverse mortgage?
A reverse mortgage is a non-recourse loan that enables homeowners — age 62 and older — to convert a portion of your
home’s equity into tax-free1 funds
There are no income, health, employment, or credit-score
qualifying requirements2
The amount of funds you can qualify for is based on your age, the property’s value, and current interest rates
Funds may be obtained in a lump sum, monthly payments, a line of credit, or a combination of any of these options
Applicants must agree to participate in a counseling session with a HUD approved agency
1. Consult a tax advisor2. Loan proceeds are not considered income and will not affect Social Security or Medicare benefits. Monthly reverse mortgage advances may affect borrower eligibility for other programs. Consult either a local program office or an attorney to determine how, or if, monthly reverse mortgage payments might affect a specific situation.
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Reverse mortgage for purchase
What is the Home Equity Conversion Mortgage (HECM) for Purchase? An FHA-insured reverse mortgage
Enables senior homebuyers, age 62 or older, to purchase a new primary residence and obtain a reverse mortgage in simultaneous transactions with no monthly mortgage payments
Allows you to combine reverse mortgage proceeds with a down payment from your current home sale or other assets, to purchase a new home
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Reverse mortgage for purchase
How can it help you? Purchase a new home without taking on a new monthly
mortgage payment
Purchase a primary residence suitable for their current needs
Purchase a home in a senior housing community
Move into a new home that’s easily accessible with modern amenities
Downsize to a smaller, easier-to-maintain home
Relocate closer to friends and family members
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Reverse mortgage for purchase
How does the program work? Step one:
Gloria and Ted Palmer, both 74, want to buy a more accommodating single-story home
They work with real estate agent Jane Mills to sell their current two-story home
In a separate transaction, they look into buying a new single-story home in a housing development being built by Bill Davis
The Palmers meet with Mills and Davis and look at several homes priced at $300,000
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3. Actual loan amounts available depend on the rates in effect when a loan is closed and the actual origination fee and closing costs charged, the appraised home value and current equity loan limits in your county.
Reverse mortgage for purchase
How does the program work? Step two:
Mills introduces the Palmers to Carlos Camargo, a Reverse Mortgage Consultant with Wells Fargo Home Mortgage
Reynolds shows the Palmers how the reverse mortgage for purchase could provide the additional funds they’ll
need3
Purchase Price $300,000
Reverse Mortgage Proceeds $177,002
Cash Required To Close $123,000
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Reverse mortgage for purchase
How does the program work? Step three:
The Palmers combine the $123,000 from the sale of their departure home, as a down payment with the $177,000 reverse mortgage to purchase a new home for $300,000 — and have no monthly mortgage payments!
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4. These are examples of what sources may or may not be used to cover the cash required to close. For detailed information please contact your Reverse Mortgage Consultant.
Frequently asked questions
What sources are allowed for the cash required to close?4
The sale of the departure home
The sale of the homebuyer’s other assets
The homebuyer’s savings
What sources cannot be used for the cash required to close? Seller financing and concessions
Cash withdrawn from credit cards
A bridge loan of any kind
Subordinate financing
Gift money from parties involved in the transaction
Down payment assistance programs (DAPs)
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Frequently asked questions
What property types are eligible? Single family HUD-approved condos Planned unit developments (PUDs) Two- to four-unit properties
(one must be owner-occupied) Manufactured homes built after June 15, 1976
What property types are not eligible? Co-ops Second homes Boarding houses Bed and breakfast establishments Manufactured homes built before June 15, 1976 and any on leased
land
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Frequently asked questions
What requirements must the new home meet? Must become the buyer’s primary residence
Must be occupied by the buyer within 60 days from closing date
Construction must be complete, the property habitable, and a certificate of occupancy or its equivalent issued prior to the loan application
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Essential facts
Enables homebuyers age 62 or older to purchase a new home without taking on monthly mortgage payments
Reverse mortgage customers receive title to and own their new home
The sale of a departure home is a completely separate transaction from the purchase transaction and reverse mortgage for purchase
Reverse mortgage is placed on the new primary residence
Reverse mortgage proceeds will be calculated based on the youngest homebuyer’s age and the lowest value of either the new home’s sale price or appraised value or the national HECM lending limit
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Industry leader
Well Established. Well Respected. Wells Fargo.
For over 155 years, the Wells Fargo name has stood for reliability; integrity and pioneering progress that helps people manage their money and grow their assets. As part of the Wells Fargo & Company family, Wells Fargo Home Mortgage can provide easy access to banking, insurance, investment and consumer finance services to help our valued customers achieve their current and long-term financial goals.
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Information is accurate as of the date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All rights reserved. 105091 3/09
For more information
Contact information
Carlos A. Camargo
805-985-2808 Office Phone
818-324-3802 Cell Phone
Carlos.A.Camargo@Wellsfargo.com
www.Carlos4Reverse.com
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