YES - WE ARE ALSO LAND LOTS AND HOMES.COM LLC REAL ESTATE BROKERAGE - reverse mortgage info below......read on....
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LISTINGS
RIVER COMMUNITY
river home for sale - 299,000 - obo, community boat dock, boat ramp , private park, private neighborhood, separate 2 story building on property ( inlaw suite, hobby shop, you decide ) 2300+ sq ft. 2 story main house , many extras, long time wakulla county builder designed and lived in this home, decks, corner lot, next to park and river, sand roads, vacation paradise, fenced, great 2nd home, or primary- reverse for purchase if you like - call broker today 850-556-6694 in mysterious waters, wakulla station area, one of a kind, won't last long....
WATER VIEW
intown - 1500+ sq ft. 169,900 -obo
tallahassee - timeberlake - on the water - porch , deck, bonus room, fireplace, hardwoods, many extras, private park and pond view - call broker - 850-556-6694 - reverse your way home or traditional purchase
TOWNHOME
intown - 1400 sq ft. townhome - 162,500
near keiser university, shopping, I-10, great layout, ranch, community pool and clubhouse, great neighborhood, college student, professional, senior - reverse your way home on this one or traditional purchase
COASTAL
lot for sale on alligator point - call today for more details 199,000 850-556-6694
REPRINTED FROM THE WAKULLA AREA TIMES FLORIDA JUNE 2008 written by Our Broker
REVERSE MORTGAGES - THE NEW SOCIAL SECURITY ?
Think about it, if we started talking about a program that everyone knew about that you paid into your whole life from the day you got your first job, and every time you got paid, made a payment, or a small portion went into an account for you to use when you retire and upon retirement; you decide when you want to start the program depending on when you needed the money, and stopped working. You could begin at 62 yrs old by withdrawing your money from the program, a little every month, or you could delay having the program start paying you until you really need the money. Say, you’re in your late 60’s or even longer, the program would always be there for you and your spouse, because you made monthly payments into it your whole life. It’s a program that was created by the Federal government and private industry and it’s insured and guaranteed by the Federal government. What would you call it?? Social Security, maybe not, maybe you would call it a Reverse Mortgage, because it works the same way!! So if one program, social security, is easy to understand and use, and everyone knows that when you get near retirement, it’s time to start thinking about Social Security, then the Reverse Mortgage program, which works very similar, should be easy to understand and to use. Soon more and more people will come to find that the Reverse Mortgage is really just the next Social Security.
Let’s elaborate further. We all know that we are living longer now, longer than ever. We all know, social security was designed for seniors along time ago, long before we were living so long. And we all know that the cost of living is more expensive than ever, really expensive. The dollar just doesn’t go very far these days. It won’t buy eggs, fuel, bread or milk. One dollar buys very little any longer. Taxes, insurance, food, electric bills and fuel, are sky high. Everything is so expensive. Back when Social Security was created for seniors, seniors had a small dollar of their total assets in Real Estate equity, and Real Estate in general. My mom and dad’s house cost was just $25,000 and their payment was just $101 per month until they paid the home off. Now the average cost of a home in Florida is in the $250,000 price range, but no one knew that when they designed the Social Security system that seniors would have hundreds of thousands of dollars of equity in their homes and no one knew people were going to live into their 70’s, 80’s and 90’s. We all know this because we know that Social Security is just not going to be enough money to pay for a retired person to live these days. We all know that seniors need more money to live on and enjoy their retirement years. But the good news is that most seniors have substantial real estate assets now, more than ever before. In the last decade we have just now started to understand how to use these real estate assets to make retirement more affordable and enjoyable with new financial tools like reverse mortgages. Just like Social Security was a new financial tool when it came out, not everyone understood it, but it soon became an accepted part of everyone’s financial plan in retirement. Just like I believe REVERSE MORTGAGES will as well, a new financial planning tool for all senior citizen home owners to be used in retirement.
So, if the family home I grew up in, in the 60’s and 70’s, cost just $25,000, and if 10 years ago the average price of a new home was $150,000, and today the average price of a new home is $250,000 then it makes perfect sense to borrow your half of the money (or equity) that you paid into housing your whole life and take it in monthly payments over the rest of your non working years. You would then be able to enjoy your life better and have a less stressful retirement. The best part is, you can still leave your family your estate or the other half of your equity because your home is worth so much more today, than it was in the past. Borrowing half the equity to live on, in a house that is worth twice as much today than it was worth 10 years ago and leaving the rest to your family makes sense. When you really think about it, is the home that you live in today so much bigger and nicer than the home you lived in the 70’s, or does it just cost more ?? Just like a loaf of bread, a gallon of gas, a dozen eggs, are they better than they were in the 70’s or bigger or more, or does it just cost more? If it just cost more, then in today’s economy that means they are worth more, because of inflation and the cost of living and the value of the dollar and other any other economic factors. If it just costs more and it’s worth more, then why not borrow the equity that you’ve created through buying a valuable home, making lots and lots of payments, and owning something of significant a value. The $250,000 home is the same home that used to be worth at $150,000. So if it’s worth $250,000 now, why not take out half to live on? It’s your equity. You’ve earned it through appreciation and payments, it’s your money, why not use it to make life easier. Isn’t that what all your investments were saved for in the first place, for a better retirement? And your house happens to have been the best investment you ever made. Unlike your stocks, bonds, CD’s, IRA’s or pension plans, you can’t live in them, but your home is a great investment and a place to raise your family too.
In the first paragraph I described a program to you which sounded a lot like Social Security but could also describe a Reverse Mortgage. If you are over 62, you can proportionately borrow, from your home, based on your homes value, your age and the current interest rate. Those three factors combine to calculate a value; or dollar amount ; of maximum equity; you can have in cash, in a lump sum, or in monthly payments for you and for your spouse , for the rest of your lives. (Similar to Social Security or payout on of an Annuity over 10, 20 or 30 years) All 62 year olds are eligible without regard to income or credit and the most popular of reverse mortgages - $350,000 in home value or lower – HECM Reverse Mortgages, are written and guaranteed and insured by FHA and HUD. HECM meaning- Home Equity Conversion Mortgages, FHA - meaning the Federal Housing Administration and HUD-meaning Department of Housing and Urban Development. Most people believe you must be a home owner and it must be your primary residence as well, but a reverse mortgage can be used for purchasing a home, using the same calculation, in an arms length transaction a proportion of your age, appraised value of the home, and the current interest rate combine to yield a dollar amount of buying power. The rest, you would need to bring in cash, securities or an IRA. THE REVERSE MORTGAGE HAS NO PAYMENTS, because you already own your equity. When you became a home owner, you paid mortgage payments your whole life to build equity and you transferred that equity to each new home you bought. A Reverse Mortgage is lending you that equity, in cash, for your hard earned work in building the value of your home your whole life. There are so many great ways to use a reverse mortgage as your new retirement financial planning tool.
Let us help you thru this process anytime, at your convenience, weekdays, evenings , or weekends , to evaluate your options and equity dollars, or we can also mail you literature from AARP and the National Reverse Mortgage Lenders Association for free at your request. So that you may further understand how you can use a reverse mortgage to make retirement easier – and how a reverse mortgage might be the new social security, for those who want to take advantage of this great FHA/ HUD program. And soon more and more people will come to find that the Reverse Mortgage is really just the new Social Security.
Michael J. Weltman , authors many articles on Reverse Mortgages for Publications in North Florida and several websites. He owns Financial Consulting Services Group, helping people with many financial options including Reverse Mortgages. He has a Masters Degree in Finance, is a Chartered Senior Financial Planner, Seniors Real Estate Specialist, Certified Senior Advisor, Mortgage Broker, Real Estate Broker, and Real Estate Instructor in Florida. This year Mr. Weltman will receive the “ new” Lender Integrity Seal of Approval (LISA) , for high standards and education in the mortgage industry. Currently serving on Boards of Directors for the Tallahassee Board of Realtors, Wakulla Council of Realtors and the Professional Business Fraternity- AKPsi- at FSU, Weltman is writing the new course on Reverse Mortgage to be taught for CE credit to realtors in N. Florida.
REPRINTED FROM TALLAHASSEE REALTOR MAGAZINE AUGUST 2008
Lender Points – Michael Weltman
Thinking in Reverse
Reverse mortgage? Tell me why I should care? And who is it going to help? How does that work? We all should have a genuine concern when it comes to our senior clients, and mortgages, and their primary residence.
So what are the moving parts, and why the name? Is there just one kind? No, there are many types of them. Known as reverse mortgages or home equity conversion mortgages (HECM), these loans yield cash for equity to the owner, in proportion to their age, the FHA appraised value, and the current interest rate. The lower value loans are controlled by the FHA lending limit by county. But a jumbo program is also available. And they have fixed and adjustable reverse mortgages, too. Rates currently are around 3.5 % ARM, over 6% fixed. Some are FHA products. No credit or income requirement, just age – 62 and over. They are reverse amortization loans, or negative-am loans, where the balance of the loan goes up, not down. They are payment-free (but you could make payments). They have no value ceiling, so feel free to go to St. George, SouthWood, or Golden Eagle with one of these. It’s also a non-recourse mortgage, which means it won’t ever go upside down, without protection to the estate and homeowner.
Let’s start with an example. Take a $100,000 home just to keep it easy (if you like bigger numbers, double whatever I say for a $200,000 home, or triple it for a $300,000 home, and so on). A 73 year old owns a home free and clear; it’s the primary residence, and no mortgage. His home is worth $100,000 with an FHA appraisal. He can get $58,000 in a reverse mortgage. When calculating for a couple, use the age of the youngest borrower. No payments, and they can take the money in a lump sum, credit line (growing), or “tenure” a social security-like annuity payment that lasts as long as they do, both borrowers. So if the borrowers need a roof, or a roof and an HVAC unit and some improvements, they can live in that home forever. Then they just found a way to get the money, through a reverse mortgage. They can spend it all on the house, or half on the house, and put half in a growing line of credit. They can use the money for anything after lien holders are paid.
In another example, a 73 year old’s $500,000 home yields $211,000, no payments, to spend on whatever he wants – a second home, RV, land, home improvements, a credit line – all of the above. Got you thinking, right? So you can shut off his $200,000 mortgage, or his $100,000 mortgage, and give him $100,000, too.
But, what if he just wants to buy more real estate using the equity in his real estate? No problem. All lien holders on the home must be paid off first, if there are any. Let’s use the example of a 73-year-old couple, husband and wife, and the home is $200,000, then we have $124,300 to buy them an investment home, town home or condo – a rental property for which they’ll pay cash. Then they put a renter in there, and they have their primary residence with a reverse mortgage on it, no payments, and a second investment home they paid cash for, with your help, and no payments – and its earning income for them in their retirement. Or split the difference: say they have a $62,000 mortgage that they want to stop making payments on, and a $62,000 piece of land they want to buy. Same difference. Did I tell you these are FHA/HUD insured, backed, and guaranteed, non-recourse mortgages? And if you’re talking over $350k in value, the jumbo loan is not a HECM product, but still a very good tool for a client to use.
Or, think about that in reverse – a reverse for purchase, that is. Use the above numbers as purchase numbers and not refinance numbers. What if a buyer came to you, and they were over 62 and they wanted to look at a $600,000 home somewhere in Tallahassee.
How much do you think they would bring to closing, and how much would the reverse bring to closing? $413,000 at age 62, for a $600,000 home; buyer pays most all closing costs – that’s a $187,000 discount, that the reverse mortgage funds. And at 72, the buyer brings $346,000 to closing on a $600,000 home and no payments; the reverse brings the rest. That’s a $254,000 discount for your senior, retiree client. At 81 years old, on a $700,000 home, they would bring $363,000 to the closing – that’s a $337,000 discount that the reverse would fund, with no payments (almost half off!). Think you could sell a few houses to seniors, with these discounts? Are you working with seniors now who could use this and the proceeds from their previous sale to buy?
So think of the reverse mortgage as a refinance tool, or a senior jumbo loan purchase tool, or a senior, buy-an-investment-property purchase tool. Or a senior land-purchase tool. Or a pay-off-my-mortgage-and-give-me-extra-money-for-repairs tool. Or a put-the-money-in-a-credit-line-with-a-growth-rate-half-a-point-higher-than-the-rate-we-are-lending-the money-at tool, etc. – you get the point. With that in mind, you can probably think of a few people that need a roof and an HVAC unit, and maybe some new floors, appliances, a home addition, screen room, etc. who are over 62 and are free and clear in their homes, (or almost free and clear). Or a retiree who needs a small rental home around campus. Or a senior at the coast who wants to shut off a $300,000 mortgage on a $700,000 house. Or buy a $700,000 home on discount…
The possibilities are endless. So now your client list is, too.
Michael J. Weltman, CSA, CSFP, MBA, SRES
Wakulla Council Director
Land Lots and Homes, LLC
REPRINTED FROM WAKULLA AREA TIMES FLORIDA APRIL 2008
Compare your options - to your right is a standard mortgage calculator with todays rates. And just up above it is the reverse mortgage calculator to compare rates. And the payments on the reverse are always $0, so keep that in mind.
Some Great Reading - click on reverse mortgage books on the left and you can print or download great books written by the National Reverse Mortgage Lenders Association. And we will mail you more books, just call
Don't settle for less than all the options - did you know there are many many different kinds of reverse mortgages. Work with someone who can explain and offer them all to you.
Choose which one works for your situation
HECM 100 & HECM 150
HECM Monthly ARM & HECM Annual ARM
HECM Fixed Rate Reverse Mortgage
Fannie Mae HomeKeeper for Purchase
HECM Refi for Purchase
Jumbo Loan Cash Advantage Account (back in 2009)
Forward/Reverse Combo for 2nd Home
Reverse Primary for 2nd Home, Investment/Rental Income or Vacation Home
Reverse / Real Estate IRA Combo for 2nd Home and more...Tenure, Credit Line, Lump Sum, 203K Repair Reverse, Standard Refi to Eliminate Mortgage. And we know how to do them all. So why would you want to limit your options when thinking in Reverse.
10 STEPS TO SAFETY
IN YOUR REVERSE MORTGAGE
Imitation is the sincerest form of Flattery.
Now that the mortgage business is quieting down, originators, advisors, and brokers are looking to stay in business as their loan volume has slowed dramatically. So they decided to get into reverse mortgages to stay in business or to make a quick buck.
Don’t become an experiment for someone who does not know this business inside and out. Ask these questions of your Reverse Mortgage Advisor…..
1) Are they a licensed Mortgage Broker in this State ?
2) Do they have a physical commercial office space, a place where You can visit their company? ( not a desk in their home ) Someplace where they have been for awhile, cause you are going to have this loan for awhile.
4) How many HECM loans have they done ? Over 100 ? How many years have they been in this business ? Over 5 Years ? The Reverse Mortgage Business.
5) Do they have specialized training with seniors ? Like a CSA – certified senior advisor designation ? Like a CSFP ? Chartered Senior Financial Planner ? Like an MBA – Masters Degree in Finance ? Like a SRES – Seniors Real Estate Specialist Designation ? Are they a Member of the National Association of Mortgage Brokers ? Florida Association of Mortgage Brokers ? National Reverse Mortgage Lenders Association ?
This will show you how much time and energy and money this Individual puts into training and development.
6) Are they using Financial Freedom Senior Funding Corp., to close their loans ? Financial Freedom is the Largest Reverse Mortgage Lender in the Nation ! , they close more than 50 % of all reverse mortgages nationally. They have been around a long time and they will be around and their CEO is a founding member of the National Reverse Mortgage Lenders Association.
7) Will they come to your home ? Will they talk to your Lawyer, your CPA, your accountant ? your family ? Many people are trying to do reverse mortgages BY MAIL ?? You receive a 125 page document and you get to talk to them on the phone and NEVER meet them in person. DON’T DO ONE THIS WAY !! – BEWARE - If they won’t or don’t want to come to you and sit in your home and look into your eyes, they don’t deserve to finance your home.
8) Do they understand Title work, Fee Simple and Warranty Deeds, Estates, Tenancy in the Entireties, Medicaid Planning, Elder Law, Property Taxes, Florida Save our Home Act and Homestead, Surveys, Encroachments, Clouds on Title - do they have a background in real estate. A reverse mortgage is refinancing real estate. Better yet, are they a Real Estate Broker, or Real Estate Instructor? A Reverse is more than a mortgage, it’s a planning tool, a retirement tool, maybe a health care payment tool, tax payment tool , insurance payment tool and More …..
9) Are they trying to sell you something else? – Besides a Reverse Mortgage? Like an Annuity or Estate Planning? Beware
10) Do your homework, Check Your Advisor Out, Use Google, Ask Around, Take your Time, Call the Chamber of Commerce and be sure to pick the right person and company to help you with this important financial decision. Call us today for more assistance – 850-556-6694 or toll free. Its free, if we don’t do one in your state, or area, we can point you in the right direction.
FINANCIAL CONSULTING SERVICES GROUP– Broker – Michael J. Weltman, MBA, CSA, CSFP, RME, SRES – Is a Mortgage Broker, Real Estate Broker, Real Estate Instructor and Insurance Broker - and Brokers REVERSE MORTGAGES AND OTHER MORTGAGE PRODUCTS THRU-
AMERIFIRST HOME MORTGAGE 1522 Crawfordville Hwy Wakulla, FL 32327- with over 5 years of experience with HECM’s and over 100 closed and funded loans
email your contact information for a private, confidential , free quote and assistance brokerllh@yahoo.com
1. What is a reverse mortgage?
Q. What is a reverse mortgage?
A. A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free* income—without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower (s) permanently leaves the home.
* Consult Tax Advisor. Not all products available in all states. call Financial Consulting Services for more information 850-556-6694
2. How does a reverse mortgage differ from a home equity loan?
Q. How is a reverse mortgage like a home equity loan? How is it different?
A. Both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash.
They differ in that with a home equity loan you must make regular monthly payments of principal and interest. However, with a reverse mortgage you do not make any monthly mortgage payments for as long as you stay in the home.
Q. Can my current income influence my ability to get a reverse mortgage?
A. No. Since reverse mortgage borrowers need not make monthly repayments, there are no income qualifications. call Financial Consulting Services for more information 850-556-6694
3. What are the advantages of a reverse mortgage?
Q. What are the advantages of a reverse mortgage?
A. There are many. Here are a few of the most significant:
Remain independent. A reverse mortgage allows you to remain in your home and retain home ownership.
Stay in your home. It allows you to remain in your home and retain home ownership.
No monthly mortgage payments. You need not pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home.
Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free* and will not affect your Social Security or Medicare benefits.
Freedom and flexibility. The money you get from a reverse mortgage is yours to use in any way you choose.
* Consult Tax Advisor -call Financial Consulting Services for more information 850-556-6694
Q. I’ve heard that with a reverse mortgage the lender would own my home. Is this true?
A. It’s absolutely false. The borrower retains title to the property. The reverse mortgage lender is merely extending a loan to the borrower.
Because the homeowners retain title, they remain responsible for the payment of property taxes, insurance, utilities, home maintenance, and other expenses — just as they would with a standard first mortgage or home equity loan.
Q. Can I refinance a reverse mortgage, as I would be able to do with a traditional home mortgage?
A. Yes. Refinancing can make sense if your home increases in value or interest rates drop.
Q. Is it possible for my loan balance to become greater than the value of my home?
A. No. You can never owe more than what your home is worth. What’s more, since the reverse mortgage is what is known as a "non-recourse" loan, the lender cannot seek repayment from your income, your other assets, or your estate. In other words, the house stands for the debt.
Q. Can a reverse mortgage lender take my home away if I outlive the loan?
A. No they cannot. And the loan is not due at that time either. In fact, you don’t need to repay the loan as long as you or another borrower continues to live in the house and keep the taxes paid and insurance in force. call Financial Consulting Services for more information 850-556-6694
4. How much money can I get?
Q. How do you determine the amount of cash I am eligible for?
A. The amount you can borrow depends on several factors, including your age, the type of reverse mortgage you select, current interest rates, the location of your home, and the appraised value of your home and FHA's lending limits for your area. In most cases, the older you are, the more valuable your home, and the less you owe on it, the more money you can get.
call Financial Consulting Services for more information 850-556-6694
5. How can I use the money I get from a reverse mortgage?
Q. Are there any limits on how I use the money I receive from a reverse mortgage?
A. You can use the money for anything you choose, from daily living expenses, home improvements, healthcare expenses, paying off existing debts, or simply enhancing your retirement years. For many people, the money provides a "financial security blanket," in case unexpected expenses arise.
call Financial Consulting Services for more information 850-556-6694
6. In what ways can I receive the money from a reverse mortgage?
Q. Is there a choice in how I receive the cash from my reverse mortgage?
A. Most definitely. With most reverse mortgages you have a wide range of payment options, one of which should be ideal to meet your financial needs.
You can choose to receive the money all at once, as a lump sum.
You can receive equal monthly payments as long as one of the borrowers lives and continues to occupy the property as a principal residence.
You can choose to receive equal monthly payments for a fixed period of months.
You can get a line of credit*; which allows you to take funds at times and in amounts of your choosing until the line of credit is exhausted. This is the most popular option, chosen by more than 60% of reverse mortgage borrowers.
You can opt for a combination of line of credit with monthly payments for as long as the borrower remains in the home.
Or, finally, you can choose a combination of the above.
* Note: in Texas, lines of credit are not permitted by state law.call Financial Consulting Services for more information 850-556-6694
7. What requirements or restrictions are involved in the reverse mortgage process?
Q. Who can qualify for a reverse mortgage?
A. Seniors 62 years of age or older qualify. There are no income, health or credit qualifications.
Q. I still owe money on a first or second mortgage. Can I still get a reverse mortgage?
A. Yes. You may be eligible for a reverse mortgage even if you still owe money on a first or second mortgage. The funds you would receive in the reverse mortgage would be used to pay off whatever existing mortgages you have on the property.
Q. Can I get a reverse mortgage on a second home or resort property I own?
A. Unfortunately no. Reverse mortgages may only be taken out on your primary residence.
Q. What kinds of homes are eligible for a reverse mortgage?
A. First and foremost, the reverse mortgage must be on the borrower(s) primary residence, that is, where they live most of the year. Most reverse mortgages are taken on single family, one-unit homes. Some programs also accept two-to-four unit buildings that are owner-occupied. Some programs grant reverse mortgages on condominiums and manufactured homes built after June 1976. Mobile homes and cooperatives are generally not eligible for a reverse mortgage. to contact the Financial Freedom representative nearest you to determine if your home is eligible.
Q. Would a home that is in a "living trust" be eligible for a reverse mortgage?
A. Yes. In most cases a homeowner who has put his or her home in a living trust can usually take out a reverse mortgage. A review of the trust documents would be made by the reverse mortgage lender to determine if anything in the living trust would be unacceptable.
call Financial Consulting Services for more information 850-556-6694
8. What kinds of reverse mortgages are available?
Q. Are all reverse mortgages the same?
A. No, actually there are three basic types of reverse mortgages:
1.Federally-insured reverse mortgages. Known as Home Equity Conversion Mortgages (HECM), they are insured by the U.S. Department of Housing and Urban Development (HUD). They are widely available, have no income requirements, and can be used for any purpose. (For more on HECM reverse mortgages. These work well with homes worth $300,000 or less.
2.Government-sponsored reverse mortgages. A Home Keeper® is Fannie Mae's conventional market alternative to the Home Equity Conversion Mortgage (HECM). It is a government-sponsored enterprise program and works like a HECM loan in many ways. However, a Home Keeper® reverse mortgage addresses a few needs that are not met by HECM loans, such as individuals with higher property values, condominium owners, and seniors wishing to use a reverse mortgage to purchase a new home. (For more on Fannie Mae Home Keeper reverse mortgages. These can be used to PURCHASE a primary residence of almost any value.
3.Proprietary reverse mortgages. These are private loans with unique features that appeal to certain kinds of borrowers. An example of such reverse mortgages, which are backed by the companies that develop them, is Financial Freedom's Cash Account Advantage Plan. (For more on Cash Account Advantage Plan reverse mortgages. These can be done with homes over $500,000 to homes worth Millions of Dollars.
Q. What are the main differences between a HECM reverse mortgage and a proprietary product like Financial Freedom's Cash Account Advantage Plan?
A. In general, the HECM product may offer a higher loan amount for a lower valued home (for example, under $500,000) depending upon the loan amount caps in specific counties/MSAs, the amount of equity in the home, and the age of the borrower. For a higher valued home with significant equity, a senior may be likely to qualify for a larger cash payout through a Cash Account Advantage Plan reverse mortgage. Cash Account Advantage Plans are not currently available in all states. (For more on Financial Freedom's Cash Account Advantage Plan reverse mortgages call Financial Consulting Services for more information 850-556-6694
9. When must a reverse mortgage loan be repaid?
Q. When will I have to pay the principal and interests cost of this loan?
A. Your reverse mortgage loan becomes due and must be paid in full when one or more of the following conditions occurs: (a) the last surviving borrower passes away or sells the home; (b) all borrowers permanently move out of the home; (c) the last surviving borrower fails to live in the home for 12 consecutive months due to physical or mental illness; (d) you fail to pay property taxes or insurance; (e) you let the property deteriorate, beyond what is considered reasonable wear and tear, and do not correct the problems.
10. What is owed when a reverse mortgage loan is repaid?
Q. What has to be repaid when the loan becomes due?
A. When the last surviving borrower permanently moves out of the home or dies, the reverse mortgage loan becomes due. The reverse mortgage principal, interest charges, and service fees (such as closing cost fees) are paid from sale of the house or other assets of the estate.
11. How will a reverse mortgage affect my estate?
Q. If I take a reverse mortgage, will I still have an estate that I can leave to my heirs?
A. When you sell your home or no longer use it for your primary residence, you or your estate must repay the lender for the cash received from the reverse mortgage, plus interest and service fees. Any remaining equity belongs to you or your heirs. It’s important to remember that you can never owe more than the home's appraised value when it is sold. None of your other assets will be affected by your reverse mortgage loan.
Q. Must the heir or the last surviving borrower sell the property to repay the reverse mortgage loan?
A. No. Repayment may be accomplished by refinancing the reverse mortgage with a traditional "forward" mortgage loan, or through the use of other assets.
12. What are the costs and fees?
Q. Other than repaying the principal and interest, what kinds of fees are involved in a reverse mortgage?
A. Most reverse mortgages have an application fee (which may cover the cost of a credit report and an appraisal), an origination fee, closing costs, insurance, and a monthly servicing fee. These charges can be paid by the reverse mortgage itself, making them no immediate burden to the borrowers; the costs are added to the principal and paid at the end, when the loan becomes due.
Financial Freedom's Cash Account Advantage Plan has options with no upfront costs – no origination fee, no application fee, and no closing costs. to learn more about Financial Freedom's Cash Account Advantage Plan.
Q. How much cash will I have to come up with to cover origination fees and other closing costs?
A. One of the real benefits of a reverse mortgage is that you can use the money you get from your home’s equity (dependent upon final calculations) to pay for the various fees that are part of the loan costs overall. The costs are simply added to your loan balance, and you pay them back, plus interest, when the loan becomes due—that is when the last surviving borrower permanently moves out of the home or passes away.
Q. Are reverse mortgage interest rates fixed or variable?
A. All reverse mortgages have variable rates that are tied to a financial index and will vary according to market conditions.
Q. What is "TALC" and why should I know about it?
A. TALC is short for "Total Annual Loan Cost." It combines all of the costs of a reverse mortgage into a single annual average rate and can be very useful when comparing one type of reverse mortgage to another.
Reverse mortgages vary considerably in features, benefits, and costs. It’s not always easy to compare "apples to apples." If you are considering a reverse mortgage, be sure to ask the lender or counselor to explain the TALC rates for the various reverse mortgage products.
13. Are there tax consequences? What about my Social Security and Medicare benefits?
Q. What are the tax consequences of a reverse mortgage? What about my Social Security and Medicare benefits?
A. Because reverse mortgages are considered loan advances and not income, the IRS considers them to be not taxable. Similarly, having a reverse mortgage should not affect your Social Security or Medicare benefits.
If you receive SSI, Medicaid, or other public assistance, your reverse mortgage loan advances are only counted as "liquid assets" if you keep them in an account past the end of the calendar month in which you receive them. You must be careful not to let your total liquid assets become greater than these programs allow. It may be wise to consult your tax advisor on this.
Another tax fact to bear in mind: interest on reverse mortgages is not deductible on your income tax returns until the loan is paid off entirely.
Q. If I take on a reverse mortgage, how will it affect my government benefits?
A. The funds from a reverse mortgage do not affect regular Social Security or Medicare benefits. You should discuss the impact of a reverse mortgage on federal,state or local assistance programs with a professional advisor, such as your local Area Agency on Aging (toll free at 1-800-677-1116), an independent reverse mortgage consultant*, or a tax attorney.
* A list of approved counseling agencies is posted on the Internet by the U.S. Department of Housing and Urban Development, at www.hud.gov.
14. What advice should I get before taking a reverse mortgage?
Q. I understand that I must meet with an unbiased counselor before completing my reverse mortgage application. What does that accomplish?
A. This is a federally mandated feature of the reverse mortgage process and is designed for your protection. The counselor, who is from an independent government-approved housing counseling agency, explains in detail the pro's and con's of all your reverse mortgage alternatives. He or she will discuss a reverse mortgage’s costs and financial implications, should tell you about any government or nonprofit programs for which you may qualify, and advise you on any proprietary reverse mortgages that may be available in your area.
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**************** **************** We are members of the Tallahassee Board of Realtors and Wakulla Realtors Council, Captial City Chapter of the Florida Assoc. of Mortgage Brokers , Seniors Real Estate Specialist Council, Wakulla Chamber of Commerce, Association of Chartered Senior Financial Planners, National Reverse Mortgage Lenders Association, Florida Associaton of Mortgage Brokers, Florida Association of Realtors, National Association of Realtors, National Association of Mortgage Brokers *******************
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****************** Our Broker has a Masters Degree in Finance - Is a FL. Licensed Real Estate Instuctor And Adjunct Professor at Various Local Colleges . He is also a FL. Licensed Mortgage and Insurance Broker. A Certified Senior Advisor and Chartered Senior Financial Planner , Seniors Real Estate Specialist and Reverse Mortgage Specialist. We are also licensed to Broker Mortgages , Reverse Mortgages and Real Estate IRA's and Insurance thru Financial Consulting Services, to better serve our clients needs.
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A Reverse Mortgage Can Turn Your Home Equity into a Paycheck
A Reverse Mortgage or Reverse Home Mortgage is a great financial product for seniors to use in their retirement plan.
When looking for ways to get cash from their home, most people consider selling their house or borrowing against their home equity and making monthly loan repayments on a home equity loan.
With a reverse home mortgage, you get all the benefits of selling your house and all the benefits of getting a home equity loan - but you can still live in and retain ownership of your home and you don’t have to pay back the loan. No matter how you structure a reverse mortgage, you typically don't pay anything back until you die, sell your home, or permanently move out. And, your ability to secure a reverse mortgage is not dependent on your credit history, income level, health or any other factors that might make a home equity loan expensive or problematic.
By converting your home equity into income, a reverse mortgage is a way to stay in your home and get cash to use for any purpose. There are no restrictions on how you can use money from a reverse mortgage.
So, what is the catch? To many, a reverse home mortgage sounds too good to be true. The only big disadvantage of a reverse mortgage is the high closing cost - which is only problematic if you plan to stay in your home for a short period of time. Generally speaking, if you don’t think that you will remain in the house for longer than another five years, a reverse mortgage might not be the most financially advantageous retirement income planning strategy.
To be eligible for most Reverse Mortgages, you must own and reside in your home and be a senior 62 years of age or older. (In most cases second homes, apartment buildings and homes less than a year old are not eligible for a reverse mortgage.)
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