Cincinnati reverse mortgage Dayton reverse mortgage
reverse mortgage Cincinnati reverse mortgage Dayton
Reverse Mortgage In Detail
If You Are 62 or Older, Have an Inadequate Monthly Income or Savings & Intend To Remain In Your Home For The Next 5 to 10 Years, You Owe It To Yourself To Closely Consider Reverse Mortgage and “Retire On The House”.
Use Your Largest Financial Asset, Your Home’s Equity, To Insure That You Will Be Able To Age Well-Age At Home
Reverse Mortgage-Your Best Source For Retirement Income
A reverse mortgage is a powerful financial tool. Incorporating your home equity into a retirement income strategy will become a lifetime planning resource for all senior homeowners no matter their means. The HECM reverse mortgage has been substantially revised as of 04/27/2015 to radically improve the loan program by adding income and credit testing, limit upfront draws to protect future equity, add spousal protections to accommodate younger spouses and reduce closing costs and fees. It can give you a bundle of tax free money to live on in retirement (Not tax advice-Consult a tax professional), it can payoff your existing mortgage, it will help insure that you can retain your home and “Age Well-Age At Home”. With a reverse mortgage you receive money and you get to stay in your home too. The “reverse” nature of this loan is that you can payments instead of making payments. You are able to borrow a conservative portion of your home’s available equity. Existing mortgages, if any, would have to be able to be totally paid off from that amount. You decide when and how much to borrow. When the loan becomes due, the loan balance, and only the loan balance, is repaid from the sale of the house at market value. Homeowner’s must continue to pay real estate taxes, homeowner’s insurance and to maintain the home.
How The FHA Reverse Mortgage Could Benefit You
If you are struggling to make your mortgage payment, a reverse mortgage might pay off your existing loan in full, prevent or stop foreclosure and provide immediate relief.
Do you know where adequate monthly income will come from years into your retirement? Do you have the monthly income of at least $2,000-$3,000 a month necessary to keep a home?
With funds from your reverse mortgage you can access frail care, (home health care, assisted living or nursing home care) as a private pay patient and postpone or eliminate the need for Medicaid, a welfare program. Reverse mortgage allows the stronger spouse to continue to live in the family home and preserve their “rainy day” savings accumulated over a lifetime for the future of the stronger, community spouse and still insure for the frailer spouse the money necessary to pay for the care each of us would like to able to access as age and fragility increases.
Do you lack significant cash savings? Is your largest asset the equity you have in your home? If so, you might benefit from a reverse mortgage.
If you cannot afford to stop working, a reverse mortgage is for you.
If your income is limited to Social Security alone, or Social Security and a modest pension, taking a reverse mortgage is to your benefit.
Do you know where the money will come from for a needed car or your tax bill? Reverse mortgage borrowers do.
If you are drawing down your investments month after month just to make your monthly budget please consider the reverse mortgage.
When your home needs repair or major improvements the reverse mortgage is there for you.
- Reverse Mortgage can be used to buy a home more appropriate to your retirement years without having the burden of qualifying for a purchase loan and without a monthly payment
- Use as an alternative to an early filing for Social Security
- Avoid having to sell investments into down markets when cash funding is needed
- An excellent funding source for the capital needed to finance that startup business in retirement
- A source of after tax income (Not tax advice, please see a tax professional)
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FHA Reverse Mortgage Basics
A reverse mortgage provides substantial financial help to homeowners 62 and older who wish to “Age Well-Age At Home”.
The reverse mortgage is NOT a wild eyed financial scheme. It is NOT a scam. It is NOT a loan of last resort.
You are NOT trading your home for the money. You CAN NOT be foreclosed upon with a reverse mortgage for missing monthly payments as there are NO monthly payments. Homeowners must continue to pay as due their real estate taxes, homeowner’s insurance and to maintain the home.
Homeowners 62 and older may borrow a portion of their home’s equity without ANY monthly repayment EVER due. (If the borrower does not meet reverse mortgage loan obligations such as payment for property taxes and insurance and condo dues if any, then the loan will need to be repaid) It works in reverse to the mortgage you used to buy your home. There is never a monthly payment. You are building up a loan balance as you borrow your reverse mortgage funds. The loan balance, and only the loan balance, is due back in one lump sum when the loan finally becomes due. You are NOT trading or selling the home to Uncle Sam for the money.
A HECM loan lends you significant money NOW, with no repayment due back until the “last of you” (if you are man and wife for example) reaches a life event of move away, pass away or remain out of the home for a continuous year. This may be many years. The average HECM loan is outstanding for 7 to 9 years. No bank is willing to do this. The money can help you retain your home and age in place. By remaining at home, which is also your cheapest, most practical and most emotionally satisfying retirement housing, you will be the happiest and healthiest possible. And you will also reduce and delay Uncle Sam’s very substantial healthcare expenditures for Medicare and Medicaid, etc.
Reverse Mortgage provides tax free access (Not tax advice-consult a tax professional) to the home equity trapped in your primary residence. Your home’s equity is quite possible your largest financial asset.
Employment is not required. Unlike approving a forward mortgage, loan underwriting does not use debt to income or payment to debt ratios for approval. The loan makes available to borrow a conservative percentage of the home’s equity. The greater the home value, older you are, or the lower the available interest rates, the more funding is available. The loan cannot be cancelled or the available funds reduced after close. The loan has no pre-payment penalty. The loan features borrower control over when and if money is borrowed from available funding. Escrow accounts are available. The cash can be used for any purpose. It’s your money.
Money can be delivered as a monthly check, a line of credit that allows the homeowner to draw money in the future when they want, in the amounts they want, a lifetime of monthly payments or a combination of any of the payment plans. If you have existing title liens,(ex. mortgages) the reverse mortgage funds must be first used to pay off those liens in full.
You are NOT trading or selling the home for the money. If you use up all your funds, or, one of the homeowners reaches a life event, repayment IS NOT triggered. Although the loan does not become due when you use up all your money, you can exhaust the available funds.
The loan balance can be paid from any resource but is usually paid from the sale of the home by you, or your executor, at fair market value. There is no forced or quick sale. The remainder of the sales price after the repayment of your loan balance is yours. It goes to you or your estate.
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Homeowner Responsibilities With A Reverse Mortgage Loan After Closing
Reside in the home as their principal residence
Pay property taxes.
Keep adequate homeowners’ insurance up-to-date.
Maintain the home
Can not declare bankruptcy
Repay the loan balance in full with one lump sum payment when the loan becomes due.
There is no city, state or federal income tax due upon the moneys received. This is not income. You are receiving the proceeds of a loan from an asset you already own. Mortgage interest is tax deductible when the loan is repaid. (Not tax advice, consult a tax professional)
The loan program is designed by, and is insured by, the federal government. The FHA reverse mortgage is a highly regulated home finance product. The FHA loan involves the strict controls of upfront mandatory counseling, the same required disclosures to every borrower and capped origination fees.
Your existing mortgage debt cannot be more than the available HECM funding for the loan to work for you. All loan closing costs can be financed into the loan. Except for home purchase, the loan does not go into effect until after a 3 business day waiting period after closing, called the 3 day right of rescission.
When the life event is triggered and the loan becomes due there is no forced sale. The borrower or their representative will be given 30 days to pick a repayment path. Then you will have 6 months to proceed and satisfy the loan. Two, 90 day extensions are available.
The loan is insured to be a NON- RECOURSE Loan. That is, when the loan is paid back, perhaps 7, 9, 12 years from origination, that IF the sale of the home for market value does not pay off the loan balance, the difference comes from the MIP fund. The borrowers or their estate does NOT make up the difference.
As a consumer protection a counseling session with a non-profit HUD approved housing counselor is required by the program. Your HECM loan cannot be processed without a counseling certificate in hand. It is a consumer protection for the senior homeowner. The cost of this counseling can be paid from a HUD grant for counseling, if available, or, up to $125 can be financed into a HECM loan. Single family detached homes, manufactured homes, FHA approved condos, PUDs and owner occupied 2-4 families are acceptable up to the FHA loan limit for HECM loans, $625,500. Minimum eligible age is 62 for any borrower.
****** A borrower may not borrow more than 60% of available funding within the first year after closing UNLESS they have title liens to be paid off at closing, typically existing mortgages.
Fixed interest rates or adjustable interest rate loans are available.
If a borrower wants a fixed interest rate loan, a minimum of 60% of available funding must be taken at closing. A fixed rate borrower may use >60% up to 100% of available funding, if necessary, to totally satisfy existing title obligations, usually mortgages. However, if the title obligations require <100% of available funding, the funding between the amount of title obligations over 60% and 100% of available funding is lost to the borrower. For example, you have mortgage liens equal to 75% of available funding. With the fixed interest rate, 75% of your available funding will be used to payoff your existing liens but you will permanently lose access to the remaining 25% of available funding.
With an adjustable interest rate loan this funding is not lost to the borrower but goes into the borrower’s Line of Credit. With the adjustable interest rate, any unused funds always remain available in a Line of Credit.
The Line of Credit that results from using an adjustable interest rate HECM loan continues to grow after closing at the same rate the loan balance is charged interest and MIP. This Line of Credit growth can be quite substantial over time. The line of credit increases in value because the reverse mortgage is an age based loan and you are receiving credit for your advancing age even after closing. You have NOT borrowed and DO NOT OWE your line of credit. You may borrow your adjustable rate funds as a monthly check of a certain amount, or, for a term of months, for a lifetime of monthly payments or the ability “to borrow when you want, in the amounts you want”.
If a borrower is seeking a periodic draw, a monthly check, or a line of credit facility, the adjustable interest rate loan must be used.
Less closing costs means more funds available to borrow. The loan requires an upfront contribution to the FHA Mortgage Insurance Program for the HECM loan, which is financed into the loan balance. When taking >60% of the available funds in the first 12 months, the upfront MIP financed into the loan is 2.5% of the appraised value, when taking <60% of the available funds in the first 12 months the upfront MIP financed into the loan is .005% of the appraised value. For example, on a loan with an appraised value of $100,000, that is the difference between a financed $2,500 and a financed $500.
***** Financial Assessment
Homeowners must successfully complete a financial assessment. The financial assessment substantiates that the homeowner has the financial capacity to afford to remain at home over the long term and the willingness to maintain the home and pay when due county property taxes, property and casualty insurance on the home and condo association dues if required.
It does the borrower, the lender, the FHA and the HECM bond investors no good to be involved with a reverse mortgage if borrowers do not have enough residual income to be able to fundamentally afford to remain in the home for years after closing. For the assessment borrowers need to provide the paperwork that verifies borrower income from all sources, debt payments and the borrowers’ property tax and homeowner’s insurance payment history to substantiate the borrowers historic willingness to pay their property charges.
A borrower can pass the financial assessment in one of 2 ways, a. residual income, or, b. reserving funding for one of 2 types of life expectancy based escrow accounts.
a. Residual Income
The borrower can pass the financial assessment by having enough remaining monthly residual income after the payment of monthly debt and housing obligations. A forward mortgage requires substantiation that a borrower has enough income to make the payment. The reverse mortgage requires the substantiation that the borrowers have enough residual income to provide for the home after closing. To pass, the remaining residual income must meet or exceed a table of residual income published by the VA. Currently, residual income is $529 for a single person, $886 for a couple, in Ohio and the Midwest. HECM tenure payments can be used to project an improved borrower budget and residual income. With acceptable residual income the financial assessment is considered to be successfully completed. All the reverse mortgage funding is available to the borrower excepting first year payout restrictions as outlined above.
b. If the residual income is not high enough to meet the residual income guideline or the borrower’s credit profile is insufficient the lender will be required to fully or partially reserve from the HECM’s available funding 1 of 2 types of escrow accounts to approve a borrower’s financial assessment.
I. Fully Funded Life Expectancy Set Aside-HECM borrowers need to have good, although albeit, not perfect credit. If the borrowers credit profile is insufficient a fully funded escrow account will be required. The escrow account is calculated to be sufficient so that the required payments for property charges through the life expectancy of the borrowers will be available. A sum is reserved from the available funding by the lender equal to the borrower’s monthly current tax and insurance bills plus $50.00 a month for home maintenance times 1.2 and then times the number of months of remaining lifespan as published in life insurance tables for a person of the borrowers age. The property charges are then paid by the lender as due.
If a full life expectancy escrow account is necessary, this reserving of funding may require a substantial portion of available funding. This MAY leave insufficient funding available to pay off mandatory title obligations, typically mortgage liens from outstanding loans, in which case the loan could not close, or, end borrower interest to close, as available cash monies to the borrower could be well below borrower expectations.
II. A Partially Funded Life Expectancy Set-Aside-If the borrower has good credit but insufficient residual income, a partially funded life escrow account based upon life expectancy will have to be created. this account requires much less funding than the fully funded life expectancy based set aside. This set-aside is composed of the monthly amount the borrower lacks in residual income times life expectancy and is used to pay funds directly to the borrower every 6 months equal to the residual income deficiency a year.
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Using The HECM Reverse Mortgage Loan TO BUY A Home
Most homeowners 62 and older use the HECM to access the equity they have in the homes they now occupy. But those 62 and older can also use a HECM loan to BUY a home more suitable to their retirement years. And as with all HECM loans there is no monthly repayment on a HECM for Purchase.
Perhaps they wish to buy that “dream” home or even afford their first home. Perhaps they want a different home but do not want a mortgage payment at this stage in their life, or, they want a smaller home, a ranch with no stairs, a condo, a home closer to the grandkids, a home in a resort community or warmer climate.
Most buyers of homes in retirement are all cash buyers. But with a reverse mortgage they do not have to spend all their cash. Or perhaps, for a myriad of reasons they cannot be approved for a purchase loan. Most of those reasons for denial of a purchase loan do not apply in HECM lending. A minimum credit score, underwriting ratios such as debt to income, payment to debt, loan to value, continuing and stable income sufficient to support a loan payment and 2 year employment history are NOT required in obtaining approval for the reverse mortgage to purchase.
Using a HECM to buy borrowers would reverse mortgage the new home for the closing, take up to all available reverse mortgage funds at close, bring the difference as cash and have no mortgage payment. After closing there is no repayment of any amount due back on the reverse mortgage to buy until the LAST of the home owners move away, or pass away or stay out of the home a continuous year.
There is no monthly repayment on a HECM for Purchase. The borrowers do have to pass the financial assessment used in HECM underwriting to make sure they can afford to remain in the home after closing and they do have to pay the property taxes, insurance due for the property & condo association dues, if any.
Here is an example, an example only. Call Mister Reverse Mortgage for an updated quote. An older couple, youngest age 70, wants TO BUY a $250,000 property. Age 70, 250K property. The available reverse mortgage funds would be $144,000, (as of 03/02/2015 with a fixed interest rate of 5.06% with the total expected rate 6.31%., or, an adjustable interest rate with a margin of 2.5% plus the one month LIBOR of .172% for a total initial rate of 2.672% with the expected rate of 5.21%)
Following HECM disbursement restrictions the buyers at this point would have a choice. They could take all available funding for closing by paying or financing into the loan the upfront MIP of 2.5%, $6,250. Or, if the borrowers borrow 60% or less of the available funds at close, they would pay of finance into the loan a much reduced MIP of .005% or $1,250.
Using an example where all available funding is applied at closing, and an adjustable interest rate is chosen, the 3 categories of closing costs, all financed, are $12,565. (Origination of $4,000 Mister Reverse Mortgage’s maximum and a $500 savings from other lenders, $6,250 Upfront MIP and $2,315 closing costs). If the borrowers would chose a fixed interest rate there would be no origination fee and their costs would be $8,565. Again, the closing costs would be less if they did not take all their available funding at close but brought more cash to closing because their upfront MIP would be less. But, if they would borrow all the available cash reverse mortgage funds of $131,435, (this is excluding the financed closing costs of $12,565 of an adjustable rate loan, less costs for a fixed rate and less for taking <60% of available funds at closing) they would have to bring the difference, $118,535, as lump sum cash to closing and then they would HAVE NO MORTGAGE PAYMENT. (purchase price minus available reverse mortgage money= funds due at closing. $250,000-$131,435 reverse mortgage funds =$118,565 cash due from buyer at close). Their loan balance at close would be $144,000, $131,435 cash received plus $12,565 closing costs financed with 2.5% MIP.
With a reverse mortgage to buy the buyer does need a large down payment. But think of the age of these borrowers. The money due at closing can come from any other source such as walk away money from the sale of the family home, a retirement distribution, (401K, IRA’s, lump sum pension distribution, etc.) a gift, or inheritance but it cannot come from a lien on the subject property.
Some pointers for realtors. There can be no sales concessions allowed in the contract of a HECM For Purchase. For newly built homes a certificate of occupancy must be issued and the homeowner must be in residence within 60 days of closing. The forms “Amendment to Sales Contract and Real Estate Certification”, standard forms to all FHA purchase loans, must be executed at same time as sales contract. If a condo is involved it must be from an FHA approved condominium complex. Closing by POA is not allowed.
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It Seems Perfect, Even Too Good To Be True
There are some drawbacks to consider. Like regular mortgages, reverse mortgages have closing costs. HECM loans have origination fees. The applicable interest rates tend to be higher as well because a mortgage insurance charge is added to the rate. The HECM reverse mortgage is a loan that will have to be repaid. It is a loan with fees, compounding interest and repayment terms. Money drawn from a reverse mortgage reduces the remaining home equity available to the homeowner. A HECM borrower can run out of loan proceeds later in life when they are apt to need supplemental income due to the likelihood of incurring health or long term care needs. Homeowners continue to be responsible after loan closing to make sure their property taxes, homeowners insurance, condo fees if applicable and home maintenance charges are paid in a timely manner.
The #2 Reason homeowners do not consider a reverse mortgage is that They want to leave their home to their children.
If your children are not, or cannot, help you financially each and every month, dependably, you should use YOUR assets to depend upon YOURSELF.
It is correct that if you obtain a reverse mortgage your children will not inherit the house. What the children do receive is the remainder of the home’s equity after the loan balance is repaid. You only owe your loan balance at any time. If you try to keep your loan balance down by taking your funds in the form of a line of credit and receiving money only when you need it, as you need it, the more equity will be available to inherit. In the ideal, you should involve your children in this decision. I suggest you ask your kids for their opinion. But after decades raising and helping their kids isn’t it time for mom and dad to take care of themselves?
The #1 top reason homeowners do not consider a reverse mortgage is that homeowners do not know that the loan exists, that the concept of reverse mortgage exists. A caveman can not want to own a wheel if they have never seen a wheel before. They lack independent knowledge and do not have a good information source. In addition, adverse and ill informed, sensationalist media reports on reverse mortgage have been common. They fear making a mistake involving their single most important possession. Seniors think the federal government or bank will foreclose on them and take their home. No one can take your home. Since there is no monthly payment foreclosure is not involved. This is a mortgage loan for a loan balance like any other mortgage loan. The lender or Uncle Sam does not “get” the home when the loan is due. You are not trading your home for the money. You remain the owner of the home. There are many seniors who have no close heirs, do not have surviving children, are estranged from their children or their children are quite successful. Even these seniors are slow to consider the many benefits of this loan.
The #3 reason homeowners do not consider a reverse mortgage is that homeowners are embarrassed that after a lifetime of work they need this loan. It’s as if it’s a personal failure on their part to apply. That if they only would have worked harder or saved more they could be independent . NONSENSE. You provided a home, food, clothing and education for your children. It’s America and the world economy that we live in that has changed. Prosperity is not growing in America, poverty is. The sky is not the limit. We have spent way more than we had for decades without making sufficient investment in education, job training and infrastructure and it’s all catching up to us.
Latest red flag to be aware of are loan officers who are not trained or experienced enough to determine through a good faith effort if an applicant can pass the financial assessment. You do not want to go all the way through the process, pay for a non-refundable appraisal and title work, have your application make it to underwriting and only then be denied on the financial assessment.
In person, in home service on this loan is very important. There are many moving parts and it is very difficult, if not impossible, to explain everything over the phone. The loan officer should also gather all your verification paper work before application and perform the financial assessment calculations to make sure the loan works for you before formal application.
To sum it all up.
You are the salt of the earth. You fought America’s wars. You bought a house, raised a family and worked your job. You had hoped you would now be at ease in your retirement. Instead you are one of the many, many retired senior homeowners who experience the constant stress of financial struggle and it’s not likely to get better. You are most certainly not alone. Working People in the US cannot really afford to be retired, even afford to keep their house. Many an American retiree is left with an insufficient monthly income, without a company pension or without significant cash savings. ANYONE Who Actually Did The Physical Work, ANY former blue collar worker, former construction or factory hand, former administrative worker, truck driver, or lower level white collar worker etc. cannot afford to be retired. It’s that simple. For you,
everyday expenses, as well as unanticipated costs such as healthcare not covered by Medicare or enjoying leisure activities, is becoming impossible to pay for. Especially for singles, minorities or women, it is so, so, common. For many seasoned citizens hoping for a retirement like in the movie “On Golden Pond” has become “Skating on Thin Ice.“.
If a Cincinnati reverse mortgage, Dayton reverse mortgage is in your future it pays to originate your reverse mortgage with Mister Reverse Mortgage, a true expert
I will custom design a reverse mortgage to suit your life. I offer In-home, personalized service
If you have questions, or, if you would like to begin your application, please to call me. David Brent Levy at 513-235-8582, or,
e-mail me David@MisterReverseMortgage.com.
Mister Reverse Mortgage™
Mister Reverse Mortgage, “LLC”
Ohio Mortgage Brokers Certificate of Registration
OH MB 804198 NMLS# 1362191
Reverse Mortgage Lending Since 1993
Cincinnati Phone (513) 235-8582
PO Box 1, 411 Terrace Place, Terrace Park, OH 45174
Equal Opportunity Lender
Copyright 01/08/2015 Mister Reverse Mortgage™All rights reserved.
This material is not from HUD or the FHA and has not been approved by HUD or any government agency. Reverse mortgages are neither endorsed nor approved by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans. The FHA does not make or originate loans. Reverse mortgages can be both first mortgage or first and second mortgage loans depending upon loan type. A reverse mortgage is a negative amortization loan which increases the principal mortgage loan amount and decreases the home equity. Borrowers are responsible for paying property insurance and taxes, condo dues if any and property maintenance as they become due. and which may be substantial. The HECM reverse mortgage is a loan that will have to be repaid according to the loan documents. It is a loan with fees, compounding interest and repayment terms. All loans are subject to credit and property approval. Programs, rates, terms and conditions are subject to change. It is strongly advised that borrowers consult with your family and/or trusted financial planners when considering a reverse mortgage loan.
No one may duplicate or use for any purpose any portion of the above work without the express written consent of David Brent Levy, Mister Reverse Mortgage.™. This material is intended to be an educational presentation of the HECM loan. It is not, nor is it intended to be, an exhaustive or complete. Please see HECM loan documents for such. All material on these pages including interest rates listed are examples and estimates only and may or may not be applicable to a loan for which you may qualify. Interest rates listed were averages of rates available on the dates listed and are examples only. This material is not an offer to make you a loan, does not qualify you to obtain a loan and are not an official loan disclosures. Rates, fees and costs vary from lender to lender. Only an approved lender can determine eligibility for a loan and provide a ” Good Faith Estimate ” of loan terms. Rates, fees and costs vary from lender to lender. Only an approved lender can determine eligibility for a loan and provide a ” Good Faith Estimate ” of loan terms. The above material is not provided by or approved by HUD or any governmental agency. A HECM loan is a loan and must be repaid in full according to the loan documents. Homeowners must continue to pay for their property taxes, property insurance and maintenance for the term of the loan. There is no guarantee that the homeowners’ heirs will have home equity to inherit or that they will be able to qualify for a home mortgage loan to buy out the HECM loan when the HECM loan becomes due.
Homeowners-If you are a homeowner in the Cincinnati or Dayton area considering a reverse mortgage it will pay you to comparison shop with Mister Reverse Mortgage. I offer In-Home, personalized service and No-Cost loans are available.
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