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 | email@example.com
|*||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.|
Excellent customer service Wonderful service. Know edge w Very helpful
Judy E — Jul 30, 2014
Nervous in the Beginning Larry was very knowledgeable about the processing of the reverse mortgage. He answered all my questions in a way that I could understand each step of the process. I was nervous in the beginning but with Larry helping me step by step in understanding the process, I became very much at ease. I would be more than happy to recommend others who would want to do a reverse mortgage. Again, thank you Larry.
Dorthie A — Feb 6, 2017
Great experience Larry McAnarney was just super. He helped us stay organized and explained everything that needed to happen to complete the reverse mortgage. We really couldn't have done it without him. Like anything that's associated with the government, there are lots of hoops to jump through. But Larry was very patient with our questions and was easy to work with from start to finish. My wife was getting impatient with the process and said some things that would have caused most people to say good-bye, but Larry stayed calm and didn't put any pressure on us to make a final decision. He treated us with respect and wanted to be sure that WE were happy with what we were doing. I'd highly recommend Larry to anyone who is considering a second mortgage. It was a great experience.
Terry M — Aug 14, 2015