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Home Equity Conversion Mortgages

Home Equity Conversion Mortgages. Courtesy of: First Financial Reverse Mortgages 1-800-720-7003 FirstFinancial@firstloans.net. Borrowers should consult financial advisor and appropriate government agencies for any effect on taxes or government benefits.

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Home Equity Conversion Mortgages

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  1. Home Equity Conversion Mortgages Courtesy of: First Financial Reverse Mortgages 1-800-720-7003 FirstFinancial@firstloans.net Borrowers should consult financial advisor and appropriate government agencies for any effect on taxes or government benefits. Make sure your clients understand the features associated with the loan program they choose and the effect of an adjustable rate to their overall loan cost. Advisor and/or broker/correspondents are independent entities and do not form legal partnership or agency relationships with Financial Freedom. Information is intended for Mortgage Professionals only, and not intended for distribution to consumers

  2. What is a Reverse Mortgage? • A retirement tool that allows senior homeowners to convert home equity into tax-free cash Without • Leaving their homes • Having income to qualify • Being required to make monthly mortgage payments • Having to repay the loan until last borrower permanently moves out • Who can get a Reverse Mortgage • Senior homeowner, at least 62 years old • With enough equity in his/her home to qualify

  3. How Does This Differ from a Traditional Mortgage Loan? • Does NOT require repayment until - Last borrower moves out - Borrower (s) sells the property - Last borrower passes away • Borrower may qualify more easily compared to a traditional loan

  4. Features and Benefits • Homeowner retains title to the home, not the lender • Seniors’ savings are preserved and their cash flow is increased to use for the cost of living and to enjoy life • Reverse mortgage proceeds are tax free • Borrowers are not required to make monthly mortgage payments • Virtually no income or credit qualifications are required • Senior enjoys financial security and independence

  5. Qualifications • Senior homeowner(s) 62 years or older • Home must be a 1-4 family residence • Most Condominiums and PUDs are eligible • Manufactured homes meeting HUD guidelines • Primary residence • Mandatory HUD approved counseling

  6. Borrower’s Responsibility • Keep property taxes current • Maintain hazard insurance • Maintain property in reasonable living condition • Live in the home as primary residence

  7. How Safe is the HECM Reverse Mortgage? • FHA administers the HECM program and guarantees that borrowers receive their requested loan advance if the lender defaults • The borrower(s) will never owe more than the fair market value of the home upon loan maturity.

  8. How is the Loan Amount Calculated? • Appraised home value or the national lending limit (whichever is less) • Age of the youngest borrower • Current interest rate

  9. Interest Rates • HECM Variable -Monthly and annually adjustable options available based on the One Year CMT index plus a margin and monthly adjustable options based on the One Month LIBOR index plus a margin • HECM Fixed -Fixed rate for the life of the loan -Competitive rates offered for loans with 100% upfront draw -Single alternate rate for loans other than 100% upfront draw .

  10. Flexible Payment Options • Reverse mortgage proceeds can be received: - Monthly - Lump Sum - Line of Credit - OR a combination • You can change payment plan at any time during the life of the loan. (a nominal fee will be charged)

  11. Come On In…The Process is Easy 1. Contact First Financial Reverse Mortgages 2. Discuss and review benefit illustration 3. Set up an appointment with a HUD approved housing counselor 4. Complete application 5. Order FHA appraisal

  12. Completing the Process 6. If loan is approved, all outstanding conditions must be cleared 7. Draw loan documents 8. Three day right of rescission 9. Loan funds, documents are recorded and proceeds, if any, are disbursed as instructed

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