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.|
Many Thanks! We were hesitant about a reverse mortgage but our financial planner referred Larry McAnarney to us. So glad he did! Larry is very personable and professional. He explained everything to us and made sure we completely understood it all. Anyone would surely benefit by having Larry to consult with on a reverse mortgage. Larry, many thanks for all your help and peace of mind! Many Thanks!
Lee & Jeanette P — Aug 17, 2017
Reverse Mortgage through Larry McAnanery Larry made the whole process so easy and easy to understand. He answered all of our questions and let us know everything that was going on. He was even at our closing I would DEFINITELY recommend him to friends and family
Susan K — Aug 12, 2014
Very Easy Process Larry made this process easy from start to finish. Was always available with any questions that came up. Even after closing! I would not hesitate to recommend a reverse mortgage to any senior and Larry to help thru the process. Thank You Larry! I am grateful.
Carol B — Jan 29, 2016