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Reverse Mortgages

Reverse Mortgages

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Reverse Mortgages

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  1. Reverse Mortgages

  2. Welcome • Introductions • Facility information Welcome

  3. Overview • Reverse Mortgage Overview • Qualifications for a Reverse Mortgage • Benefits of a Reverse Mortgage • Loan Costs • Common Uses of Proceeds • Payment Options • Reverse Mortgage Products • Steps to Getting a Reverse Mortgage • Next Steps • Additional Resources

  4. Reverse mortgages are a way for homeowners, 62 and over, to access equity they have in their homes • A reverse mortgage is a loan against your home that you do not have to pay back for as long as you live in the home • You still own your home throughout the entire term of the loan • A reverse mortgage can help you access cash based on the value of your home without you having to make monthly mortgage payments and can help you better manageyour financial future What is a Reverse Mortgage

  5. Qualifications • There are no income or health requirements, and minimal credit verification requirements. • The amount of reverse mortgage benefit is determined by • The age of the youngest borrower on title (all borrowers must be at least 62 years of age) • The current appraised value of the home • Current interest rates

  6. No monthly mortgage payments • No income qualifications • Loan proceeds may be tax-free (consult a financial or tax advisor) • You can receive the money in a way that suits your financial situation – lump sum, line of credit, fixed monthly payments – or a combination of any of these options • May not affect Social Security or Medicare benefits (contact a financial or tax advisor) • The loan is not due until the last borrower permanently leaves the home • Neither you nor your heirs will owe more than your home‘s appraised market value at the time repayment is due Benefits

  7. Common Uses of Proceeds • Paying for daily expenses • Making home repairs and improvements • Covering medical expenses • Purchasing long-term care insurance • Establishing trusts • Helping to financially support family members (e.g., funding grandchildren’s tuition) • Paying off loansor bills • Maintaining or improving quality of life • Something special - buying a new car or taking a vacation

  8. Benefit Payment Options • Lump Sum • A withdrawal of your available benefit at loan closing (the entire amount or a partial amount), typically to pay off your existing mortgage balance, if any, and to provide cash. • Fixed Monthly Payments • Tenure: A fixed monthly payment for as long as you remain in the home. • Term: A fixed monthly payment for a specific term that the borrower determines. • Line of Credit • A credit line the borrower can access at any time. The unused balance has a growth feature, which means the borrower will have access to additional benefits the longer they remain in their home. • A combination of any of these options • Partial prepayments allow for increases in available credit

  9. Loan Cost • Origination Fee • Mortgagee Insurance Fee • Appraisal Fee • Title Insurance • Servicing Fee Set-Aside • Other Closing Costs • Repayment

  10. Home Equity Conversion Mortgage (HECM) • Government insured program • Monthly or annually adjustable • Benefit amount determined by HUD County Lending limits • Mandatory counseling by a HUD-approved counselor • Proceeds are available as lump sum payment, line of credit, as fixed monthly income, or a combinations of these options • Unused portion of line of credit can grow • Loan origination, mortgage insurance and closing costs can be financed by the loan • Generally, SSI or Medicaid/MediCal are usually not affected • No limitation on use of loan proceeds (after any other mortgage debt is paid) • Loan proceeds are equity and not taxed (consult your tax advisor)

  11. Informed Decisions We recommend that you do your research to get the information you need. Other things you might consider: • Talking to your family or other trusted advisors • Other potential solutions such as: • other types of mortgages such as refinancing, a home improvement loan or an equity line of credit • state or local programs that might provide funds for home repair or property tax deferral • consulting a legal, financial or tax advisor to discuss your financial needs and considering other potential income solutions • social services benefits that may be available such as Supplemental Security Income (SSI), Medicaid, MediCal, Veterans Benefits, and widow/widower benefits • comparing the costs and benefits of selling your home to those you would receive from a reverse mortgage • purchasing a traditional annuity

  12. Steps to Getting a Reverse Mortgage • If you decide a reverse mortgage is the best solution for you, the process involves: • Education – understand the loan and the process • Appraisal – determines the current market value of your home • Underwriting – when the loan file is reviewed • Closing – when the loan documents are signed and you determine how you want to receive your loan proceeds

  13. Additional Resources • We Support Informed Decisions • National Reverse Mortgage Lenders Association • National Council on Aging

  14. Click here to have an Affinity reverse mortgage specialist contact you and receive a free no-obligation reverse mortgage estimate. Reverse mortgages funded and administered by an Equal Housing Lender. This is general information only and does not represent all underwriting requirements and restrictions. All program guidelines subject to change. This is not a commitment to lend. May not be brokered in all states, call for details.