YOU may be surprised to learn that the #1 FEAR among older Americans is running out of money - DEATH is #2. I became a Reverse Mortgage Specialist to help my Baby Boomer friends, their parents and grandparents quell the fear of running out of money. Therefore, I teach my clients and their trusted advisers how to use the Reverse Mortgage as a Retirement Funding Strategy. The goal is to help you keep more money in your pocket and live the lifestyle of your choice!
Did you know that older Americans possess most of the wealth in this country? But, their wealth is tied up in Home Equity, which leaves many CASH POOR? A REVERSE MORTGAGE provides the retirement funding strategy to allow eligible homeowners to tap into their housing wealth. Older Americans are then able to use some of their home equity (housing wealth) as TAX FREE CASH.
REVERSE MORTGAGES play a vital role in funding a better retirement lifestyle. More Older American homeowners can tap into their housing wealth by using this retirement funding strategy. Then they may be able to remain in their own homes for the rest of their lives.
You must be a homeowner at least 62 years of age. pass a financial assessment review, and your home must be FHA approved with sufficient equity. There are no monthly principal and interest payments due with this loan. (You must continue to live in your home as your primary residence, pay property taxes, hazard insurance, HOA and other property charges and maintain your home) The loan is due when the last borrower (or eligible non-borrowing spouse) permanently moves out or fails to meet the loan obligations. The best part is that YOU CONTINUE TO OWN YOUR HOME! The lender is not on title with you. You can choose when you wish to pay off the loan or sell your property.
The HECM - Home Equity Conversion Mortgage
The Home Equity Conversion Mortgage (HECM) is a federally insured (by FHA/HUD) Reverse Mortgage. The HECM program was signed into law by President Ronald Reagan as a national program in 1978.
An important update occurred in 2008, when as part of the Home Economic Recovery Act (HERA), eligible homeowners could buy a home using a reverse mortgage.
One of the most recent updates addresses the top issue in the minds of most people. "What happens when one of the spouses is under 62?" The good news is that the younger spouse may now remain on title (although not on the loan as a borrower), and stay in the home with the reverse mortgage in place if the older spouse dies first.
$ 679,650 is the new maximum value limit. The loan is based on the lesser of the appraised value or this new maximum value limit. The loan amount (or principal limit) varies depending on the age of the youngest borrower or non-borrowing spouse. The maximum HECM is $509,737.
The Jumbo Reverse Mortgage
The Jumbo Reverse Mortgage is currently offered by only a handful of lenders. It is known as a "proprietary product;" meaning it is designed specifically by the lender who is offering the loan. It is not federally insured, but does have similar guidelines to a HECM, It is primarily used for high value homes worth in excess of $1 million.
If a home does not meet FHA guidelines to allow the use of a HECM, then sometimes a Jumbo Reverse Mortgage is the right choice even if the home is valued under $1 million.
There are a couple of major differences between the Jumbo Reverse Mortgage and the HECM. 1) The Jumbo is a fixed rate loan with no further cash draws available. 2) The HECM can be a fixed or adjustable rate mortgage. Borrowers with an adjustable rate often receive monthly payments from a growing line of credit.
$4 million is the maximum loan amount with a Jumbo Reverse Mortgage. The loan is based on a percentage of the appraised value as determined by the lender.
A Reverse Mortgage may very well be the right retirement funding strategy for you! I recommend that we talk together real soon. I am happy to include any of your family members or trusted financial advisors in the discussion. My consultations are always free. I take the time to make sure that you are completely comfortable with how a reverse mortgage would work for you. This decision could give you financial peace of mind and the lifestyle you have hoped for! Right now click the button below to get in touch with me.