A reverse mortgage could help your clients age 62 and older to effectively leverage an important retirement asset: home equity. Thanks to significantly lower costs and academic research that demonstrates the value of FHA-insured Home Equity Conversion Mortgages (HECMs), reverse mortgages are gaining acceptance as a valuable and effective tool to help satisfy the challenges of meeting retirement goals for decades.
With its flexible payment options, a reverse mortgage can give borrowers more financial control and can serve as an excellent risk management tool, while keeping productive assets under your management — helping their portfolios last longer. As a tax-efficient strategy, clients can use a reverse mortgage to reduce their income taxes* by lowering their withdrawals from qualified accounts. Other uses include refinancing aconventional mortgage with a HECM, so as to eliminate a client's monthly principal and interest payment. Or perhaps using a HECM to finance the purchase of a home, thereby reducing the amount of cash older clients have to "put down" when downsizing.
Clients can establish a lower-cost HECM credit line and draw on it as needed for future expenses, such as health care costs. A unique feature of the HECM credit line is the amount available to clients will grow monthly, independent of any change in home value. This feature provides additional available cash in future years that may prove valuable as clients savings are depleted.
To see the pros and cons of a Reverse Mortgage Line of Credit vs. a traditional Home Equity Line of Credit (HELOC), click here.
To learn more, please contact me.
HECM Loan Specialist, NMLS #21059
Call 815-703-4745 | firstname.lastname@example.org
|*||Not tax advice. Consult a tax professional.|
|†||The information being shown is for illustrative purposes only. Scenario is a 62-yr-old couple, with a home valued at $500,000 & no mortgage, securing a reverse mortgage line of credit (LOC). LOC will grow at 5.125% above the 1-Year LIBOR (margin = 3.875% + ongoing Mortgage Insurance Premium of 1.25% = 5.125%). The initial LOC is $237,375; left unused, in 10 years, when they are 72 yrs. old, LOC will have grown to $462,333 in available funds. In 20 years, at age 82, assuming no withdrawals the amount available will be $900,483. The estimates shown are based on a CA property and Reverse Mortgage Funding LLC’s HECM Annual ARM as of 6/15/16. The initial APR is 5.149%. The loan has a variable rate. The rate is tied to the 1-Year LIBOR plus a margin of 3.875%. There is a 5% lifetime interest cap. This means that the maximum rate that could be imposed is 10.149%. There is a $0/ month servicing fee. In this example, closing costs include an origination fee of $0, third-party closings costs of $2,897.45, and an up-front FHA Mortgage Insurance Premium of $2,500 depending on the appraised value of the property securing the loan. The borrower receives a credit at closing of $5,272.45. Interest rates and funds available may change daily without notice.|
The Customer Comes First Her I have been very happy with all of my dealings with Larry McAnarney. He has the drive needed to handle all the details in a timely manner but explain the steps and concepts in an easy to understand and gentle, laid back manner. Never a hard sell with Larry. With a plan to close the transaction before the first of the month, Larry kept the momentum going until all was settled with four days to spare. He was available for questions and advice at all times which was very beneficial because of the timetable involved. Professional and engaging. Win-Win-Win.
Valerie D — Jan 30, 2015
Very Professional from Start to Finish!! With little or no knowledge about the details involved in a reverse mortgage, I set out to find a company I could TRUST to help me make the best decisions on my Moms behalf of receiving a source of a supplemental income. I was referred to Larry McAnarney by a friend. I contacted Larry and he replied to my email in a timely and VERY professional manner. After speaking with him on the phone with my list of questions I felt very confident that this was the person I would be dealing with from here on out. His response time to my calls and emails was beyond excellent when it comes to customer service. I would highly recommend Larry to anyone who is looking into the possibilities of a Reverse Mortgage. I would have given Larry a SIX star rating if I could.... but, a five star will have to do for now.
Alicia F — Feb 20, 2015
Overall Rating...Outstanding Presentation by Mr.McAnanarny very thorough and easy to understand.The closing was flawless and Mr. Mc followed up in a very timely manner. Overall rating...outstanding.
Tom G — Jan 7, 2016