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The FHA Insured HECM Reverse Mortgage For Financial Advisors
Unique and attractive borrowing facility open to homeowners 62 and older. The loan is a strategic lifetime income planning resource. No longer a loan of last resort but HECM loans are also for those who enter retirement well-funded. It protects a borrowers access to cash. There is great value for clients to open a reverse mortgage line of credit at the earliest possible age. Combining reverse mortgage and investment portfolios can significantly boost retirement income.
The older the youngest borrower, the greater % of the home’s appraised value is made available. Cash account available of 50-75% of home’s value depending upon age and available interest rates (as of 11/13/2015). Reverse Mortgage provides significant tax free funds to homeowners 62 and older without any repayment due until the last of the homeowners no longer needs the home according to the loan documents. The loan helps to insure that the senior may “age at home”. Loan is underwritten without minimum FICO scoring, debt to income, loan to value and other underwriting ratios and without regard to employment or monthly repayment ability.
With the adjustable interest rate the loan features a non-cancellable line of credit that can not be called or reduced and without pre-payment penalty. The borrower control when and if credit line is used. Options available to draw funds with adjustable interest rates include upon request, or, tenure, term or monthly payment amounts. Unused funds with the HECM adjustable interest rate reverse mortgage loan fund a line of credit which continues to grow after close to reflect the borrower’s increasing age. Line of Credit grows at same rate as interest rate plus monthly MIP charged loan balance.
Provides after tax income
- Satisfies at closing existing title liens, (i.e. existing mortgages) and eliminates the forward loans monthly payment
- Reverse mortgage is excellent for funding Home Health or other Frailcare. It allows the stronger spouse 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 for the care each of us would like to able to access as age and fragility increases.
- Reverse Mortgage can be used to buy a home more appropriate to one’s retirement years without having the burden of a monthly payment, having to qualify for a forward loan or using an all cash transaction.
- Use as an alternative to an early filing for Social Security.
- Alternative to selling investment portfolios in down markets or borrowing from, or selling, life policies.
- Substantially lower closing cost of lower upfront MIP available. Ask about “No closing costs loans”
- Excellent source of financing for existing or startup business for older American homeowners.
- Tax Benefits. Can be used by retiree to avoid withdrawing from 401K or taxable IRA which could put retiree in higher tax bracket. Can be used to avoid eclipsing income threshhold where their Social Security benefits become taxable.
- Is an emergency fund of tax free cash for unexpected events
- Supplement investment portfolios withdrawals to increase lifetime spending
Highlights of Program Changes Effective 04/29/2015
Borrowers are limited to drawing 60% of available funding a within the first year of close UNLESS they have mortgages to payoff. No longer can a borrower draw all their money at close and then have no money available in their later, more frail years. Mandatory financial assessment required to insure that homeowners can afford to remain in the home after closing. These changes improve lending practices and protect consumers. Limitations on upfront draws protect future equity. Spousal protections are in place to protect younger spouses. Reduced fees and closing costs are available and robust pricing models make No or Low costs loans available.
Reverse Mortgage Lending Since 1993
Cincinnati Phone (513) 235-8582 E-Mail David@MisterReverseMortgage.com www.MisterReverseMortgage.com
PO Box 1, 411 Terrace Place,
Terrace Park, OH 45174
Equal Opportunity Lender
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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 first or first and second mortgage loans. All loans are subject to credit and property approval. Programs, rates, terms and conditions are subject to change without notice. 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. The loan become due for repyment according to the terms of the loan documents. It is a loan with fees, compounding interest and repayment terms. It is strongly advised that borrowers consult with your family and/or trusted financial planners when considering a reverse mortgage loan.