reverse mortgage- for-financial-&-real estate pros
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Post on 07-Nov-2014
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DESCRIPTIONChris Beard would like to develop referral partnerships with bankers, financial planners, insurance agents, elder care attorneys, CPA's, Home Health Agencies and Realtors to discuss how a FHA Insured HECM reverse mortgage can be an excellent financial.
- 1. Reverse Mortgage Planning Strategies for ProfessionalsRealtors - Financial Planners - CPAs- Insurance Agents- Eldercare Attorney
- 2. Senior Baby Boomers Are ExplosiveSegment of Market. Every day over 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every day for the next 19 years. 35% of Americans at present over the age of 65 rely almost entirely on Social Security payments alone. Baby Boomer home ownership is over 70 percent.
- 3. The U.S. population 65 and older is now the largest in terms ofsize and percent of the population,
- 4. More than one third of adults, 34%, surveyed in November 2010 said thatthey had no savings for retirement, and 27% had no personal savings.
- 5. How does a reverse mortgage loan differ from aconventional mortgage ?With a conventional mortgage or home equity loan: Borrowers qualify based on their income, employment and credit score. These loans require the borrower to repay the amount borrowed by making monthly mortgage payments over a specified term to the loan servicer.With a reverse mortgage loan: Borrowers 62 + of age There are no income, employment or credit score qualifying restrictions Primary residences only No monthly mortgage payments are required from homeowner as long as the conditions of the loan are met
- 6. Why Help Clients With Reverse Mortgage? Reverse mortgage loan proceeds may be used for any purpose as a tax free proceed : Meeting daily or monthly expenses Covering healthcare , home health care, Life Insurance premiums ,LTC premiums Long Term Care of spouse Remodeling or home repairs and upkeep , paying taxes and homeowners insurance premium Consolidating credit card debt Delaying Social Security Income till FRA - Full Retirement AGE means more money 5.5% -8% more per year if they wait until age 70-thus increasing the amount of ones ultimate monthly Social Security income. Estate Planning gifting Eliminate a current conventional mortgage payment expense
- 7. Disbursement Options Fixed monthly payments A line of credit - earns interest until withdrawn through a combination of a retirement portfolio and reverse mortgage equity line withdrawals that the cash flow survival rate was higher than if used as a last resort and provided a higher net worth after a 30 year period Lump sum - proceeds taken up front as cashOr a combination of any of these options Modified Tenure- combination of LOC + monthly payments as long as they reside in home. Modified Term - combination of LOC + monthly payments for specific period of years
- 8. HECM Line of CreditLOC Grows at Current rate until withdrawn
- 9. HECM SAVER- lower home value solutionHECM Saver Rolled out in October 2010 HECM Saver is a low cost alternative to the HECM Standard Reverse Mortgage. The HECM Saver significantly reduces the upfront Mortgage Insurance Premium (MIP) therefore reducing the total closing costs. The initial MIP premium is 2% on the standard HECM and is dropped to .01% for the HECM Saver This can make the HECM Reverse Mortgage a more attractive option for a borrower with a lower home value The drawback is that the borrower will be given a lower principal limit from which they can draw out the equity
- 10. HECM SAVER- lower home value solution
- 11. HECM SAVER- lower home value solution MIP Reduced Available Funds Reduced
- 12. Retirement Solutions How Can We Work together to put these strategies together for seniors: Financial Planners Stretching the retirement income of your clients with the Line of credit reverse mortgage Insurance Agents Utilizing equity line to fund a whole life or universal life premium or Long Term Care Policy Home Owners Insurance Premiums Realtors Show a borrower how they can downsize using a reverse mortgage HECM for Purchase of a new more accommodating home when they might not otherwise qualify
- 13. Retirement Solutions Case Study #1 Ann and Richard Bartow, both age 80, are looking for a way to pay for immediate healthcare needs and be prepared to cover future long-term care insurance premiums. The Bartows want stay in their home, which they own free and clear. The last thing they want to do is start making monthly mortgage payments again Their Financial Planner or Insurance agent refer them to Chris Beard a reverse mortgage consultant. Chris shows the Barrows how a reverse mortgage loan could help address their needs and ease their financial concerns: Current home value $400,000 Reverse mortgage proceeds $243,000 The Bartows choose a $55,000 initial lump sum and put the rest of their proceeds in a reverse mortgage line of credit. This gives them the flexibility to draw out available funds to manage expenses as they arise. They are able to stay comfortably in their home and they have financial options to manage their expenses.
- 14. Retirement Solutions Case Study #2 Kim Smith is a recently retired school teacher age 65. She loves the convenience and easy maintenance of her villa near the coast, but is concerned about meeting her living expenses and increased homeowners insurance premium on a fixed income. Ms. Smith makes monthly mortgage payments of $1,200, and her remaining mortgage principal balance is $40,000. Her retirement income sources are limited to a modest pension and Social Security. Ms. Smith wants to avoid dipping into her personal savings, but thinks things will be tight. Jim her homeowners agent refers her to Chris Beard, a FirstBank reverse mortgage consultant. Chris shows Ms. Smith how a reverse mortgage loan could eliminate her monthly mortgage payments and give her budget more breathing room and cover housing expenses like homeowners insurance and taxes.
- 15. Retirement Solutions Case Study #3 Empty nesters Jean and Thomas Parker, both 74, want to buy a smaller, more manageable single-story home ,they work with real estate agent Shelley Smith to sell their current two-story home. In a separate transaction, the Parkers want to buy a new single-story home priced nearby senior housing community. Realtor Shelly Smith introduces the Parkers to Chris Beard, a FirstBank reverse mortgage consultant. Chris shows the Parkers how a fixed-rate reverse mortgage loan for purchase feature the additional funds theyll need: New home purchase price $300,000 Reverse mortgage proceeds $200,309 Cash required to close $99,691 The Parkers combine $99,691 from the sale of their departure home with the. $200,309 reverse mortgage loan proceeds to buy a new home for $300,000. They move in, without the required monthly mortgage payments of a traditional mortgage - and no more stairs to climb!
- 16. Purchase Market Opportunities The current housing conditions make the reverse mortgage for purchase a great solution for those over 62 looking to transition or relocate. Here are a few reasons that make now the time to consider the reverse purchase: Untapped Resource -Real Estate Purchase Reverse is untapped underutilized loan program- lack of understanding or awareness Home Values -Current home values are 33% lower than in 2006 Inventory Large volume of homes on the market to choose from Tightened Credit- qualifying requirements for conventional financing Reverse does not underwrite this way Less disposable income- less income needed with reverse borrowers plus borrowers keep nest egg and have no future payments Low Interest Rates- historically low expected at least through part of 2013 Home Equity- of adults older than 65, four in five own their homes outright, without a mortgage Growing Senior Population- 20% of population over 60 years old -By 2020 expected to reach 76 million in US population Retirement Planning- Financial planners recommend utilizing your home as a resource to extend income in combination with SSI & pensions over longer period of life rather than just a last resort resource
- 17. Realtor Purchase Market Opportunities Realtors help your clients and grow your own business opportunities: Show buyers how they can buy/ qualify for a higher value home Show buyers how they can purchase a home with no future mortgage payments Help Seniors buy when credit score and income requirements are an issue for them (Reverse does not underwrite that way
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