For most of our adult lives, many of us strive to achieve the American Dream – owning a home. Our homes are a symbol of achievement as well as a source of independence, comfort and a sense of control. Now you can use your home to support you! Reverses Mortgages are for those of us who are 62 or older and will allow us to tap the equity in our home to live mortgage free and pay you a monthly income for life. Reverse Mortgages allow you to live with the grace and dignity you deserve.
The advantages of Reverse Mortgages:
You have no monthly mortgage payments
You can live in your own home as long as you desire
You retain Title to you home/the bank does not own your home!
Use the money for whatever you choose
All proceeds are tax-free
No income or credit qualifications
You can:
Pay off your Mortgage and have no mortgage payments
Help cover costs of Healthcare and In-Home Care
Use the money to improve your quality of life
Gift to your children, grandchildren or favorite charities while you are still living
Reduce your estate taxes
Congress Enacts New FHA and Stimulus Packages Reforms for Reverse Mortgages!
New Temporary Lending Limits for Reverse Mortgages: for 2009 Congress has approved a new lending limit increase of $625,500 for Reverse Mortgages. Get more money when you apply for or refinance a reverse Mortgage!
Congressional Legislation reduces HECM Origination Fees! The new formula for maximum origination fees – 2% of first $200,000 of Principal Loan Limit, plus 1% of the balance above $200,000, to a maximum $6,000 – will become effective with the new HECM loan limits. This is the beginning of lowering the fees, one of the sole complaints about reverse mortgages.
Allows for HECM for Home Purchase: You can now purchase the Retirement Home of your dreams with a Reverse Mortgage. You must be 62 years or older and have a substantial down payment such as the proceeds from the sale of a current residence. Unlike a traditional mortgage, no repayment is required until the home is sold or the owner permenantly moves out. No income or credit scores required!
HECM for Co-ops is also part of this new legislation and is probably a few months away before being implemented. This adds one more property type to the list of eligible properties.
Payments for Counseling Effective within thirty days, lenders will no longer be permitted to pay for HECM counseling. The borrowers will be responsible for the payment; this insures the objectivity of the counselor! New counseling improvements will also be implemented this Fall.
Cross Sales of Financial and Insurance Products Reforms: The new legislation requires HECM lenders to have “safeguards and firewalls,” to assure that originators (sales people) have no incentives for cross-sales of other financial or insurance products.
The money you receive from a Reverse Mortgage can come in the form of a lump sum payment, a line of credit, a monthly payment or a combination of these options.
For your free Reverse Mortgage Handbook or to see how much money you can receive; call me at 415-464-8209 or e-mail at : mbottari@allcalifornia.com.
Many of Us Plan to “Age In Place”
A recent study found that the majority of seniors intend to remain in their home for retirement and for those homes that are appropriate, many seniors are planning on staying indefinitely. Simple changes to one’s home can make a living environment more comfortable and safe for older adults as they age. Some of the things that make a home more comfortable for aging-in-place are:
Installing a shower stall or seat
Installing grab bars
Installing walking ramps
Installing medical response devices
While most of us recognize these needs, a major concern is how do we pay for them? Now seniors can turn the equity in their homes into tax-free cash! The Reverse Mortgage is a loan that allows you take equity out of your home and live in it for the rest of your life. Like a home equity loan, you get the money to use any way you wish, you don’t loose control of you home but unlike a home equity loan, there are no monthly mortgage payments during the life of the loan. You don’t pay back a Reverse Mortgage, if you don’t want to, until you move out of your home, sell it or pass away. Only then must the loan be repaid. Seniors use Reverse Mortgages for a variety of needs:
Reverse Mortgages are Not Just in the US
The growing popularity of reverse mortgage is expanding past the United States. Other countries are discovering the benefits reverse mortgages have on the aging population. Australia, United Kingdom, Canada, Singapore and New Zealand are all offering reverse mortgages. India is also looking to offer these in the near future.
Australia: reverse mortgage have been offered in Australia since the 1990’s, lack of demand caused them to be removed from the market but they have now been re-launched.
United Kingdom: they are known as Lifetime Mortgage. They began offering this mortgage in 2005.
Canada: has a reverse mortgage called the Canadian Home Income Plan (CHIP) and it was introduced in the mid 1980’s.
Singapore: decided to offer a reverse mortgage product in expectation of the age shift of the next 6 to 24 years. In 2030 one out of every 5 residents will be a senior citizen.
India: introduced the reverse mortgage concept in its 2007-2008 budgets.
New Zealand: doubled their reverse mortgage market in 2006.
Learn more at:
www.bottari.net/mortgage-talk
Additional resources:
NRMLA – National Reverse Mortgage Lender’s Association
AARP – www.aarp.org/money/revmort
Fannie Mae – www.fanniemae.com
The National Council on Aging – www.ncoa.org
