change your life with a reverse mortgage
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Change Your Life With A Reverse Mortgage. 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. Facts From AARP. - PowerPoint PPT PresentationTRANSCRIPT
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?