Change Your Life With A Reverse Mortgage

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Reverse Mortgage History

1989– FHA program began

2006– More than 240,000 lives changed through Reverse Mortgages

2007– Fastest growing segment of the mortgage market

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Facts From AARP•65% of senior homeowners plan to stay in their existing home as long as possible

•82% of senior homeowners who require some level of assisted living prefer to remain in their home as long as possible

•http://www.aarp.org/•1-888-OUR-AARP (1-888-687-2277)

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National Council on the Aging

The National Council on the Aging prepared an extensive report on how to use a Reverse Mortgage to “Use Your Home to Stay at Home”

http://www.ncoa.org/

1-202-479-1200

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Improve Your Life!

Better Better LifeLife

Home Home EquityEquity

Cash Cash FlowFlow

A Reverse Mortgage allows you to use the money you have invested in your home for so many years– Afford the things you enjoy and need

– Fulfill your dreams

– Make life easier and worry free

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What are Your Goals?

Monthly Cash Flow?

Healthcare Costs?

Travel?

Big Purchase?

Home Improvements?

Peace of Mind?

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Benefits of a Reverse Mortgage

Pay off your mortgage

No monthly payments ever

Tax-free cash flow

Generally, there are no restrictions on how you spend

your money

Does not affect Social Security or Medicare benefits

You continue to own your home

You/Your heirs keep all remaining equity once the

Reverse Mortgage is paid off

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Benefits of a Reverse Mortgage

You will never pay back more than the home value

No credit, income or asset qualifications

Repay at any time with no prepayment penalty

Government insured – FHA

Independent non-profit counseling

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How Does it Work?

Who Qualifies?– Homeowners with some equity in their home– All people on title must be at least 62 years old– Property must meet lender’s qualifications

How much equity is available?– Determined by Age & Home Value– All existing home loans are paid off– Closing costs are financed into the loan

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Flexible Payment Options

Lump sum– We discourage placing full draws into savings or other

investments

Credit line– This is the most common method of disbursement

Fixed term– Monthly payments for life

Tenure– Fixed monthly payments to you guaranteed by the FHA

insurance

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Repayment Options– When you sell your home– When you leave the home for more than 12

consecutive months for medical reasons– After the passing of the last homeowner– Repay or refinance at anytime during the loan

(Details vary by loan program)– If you don’t pay your homeowner’s insurance

(replacement coverage) and– Property taxes

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Closing Costs

Loan Origination Fees

Typical mortgage closing costs– Appraisal & related inspections– Credit report– Title & escrow

FHA mortgage insurance premium (MIP) on FHA

HECM loans

No hidden costs– Every cost detailed on the Good Faith Estimate

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FHA Protection Feature

Principal Limit Lock– Sets the Expected Interest Rate ceiling

If the Expected Rate on the Loan Application Date is different

from the Expected Interest Rate on the Loan Closing Date, the

Client will receive whichever of these Expected Rates that

result in a higher maximum amount that may be borrowed.

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Obligations During the Loan

Maintain the home as primary residence

Keep the home in good condition

Maintain paying homeowner’s insurance and

property taxes

Ongoing costs added to loan balance– Interest accrues only on amounts borrowed– Monthly service fee – 1/2% annual FHA mortgage insurance premium (FHA

Loans)

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You May Need Home Repairs

Benefit to ensure safety of the home

Repairs can be done after the loan has closed

Licensed contractor for bids only

1½ times the bid amount held in the true set aside

account

6 months to complete repairs

Re-inspection will be done when work is complete

Two party check to pay contractor

Remaining true set aside account funds returned

to you

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Change Your Life!

What are the overall benefits of a Reverse

Mortgage?

Independence

Peace of mind

Flexibility

Security

Additional cash flow

Control of your life

Happiness

How do you put a price on these?