Senior Benefits: Is it for me?

Personal Q and A

Determining how a HECM fits into your retirement plan is personal and should be done with the input of your family and advisors. This section offers some very simple personal questions designed to help you work through the key financial considerations surrounding your retirement goals. There are no numbers to add, no calculations no list of income and assets. Hopefully you will find the yes and no format helpful.

Do you usually have money left over after your regular monthly expenses?
Do you have cash set aside in an emergency fund?
Could you comfortably handle and increase in the cost of your prescriptions, groceries utilities or property taxes?
Do you feel you can always afford to fill up your car at the gas station?
If one of your children needed financial aide and you wanted to help, could you?
Can you handle the cost of birthdays and holidays without straining your budget?
If you wanted extra cash, could you find it without selling any of your investments?
Would you be comfortable adding loan payments to your monthly budget?
Can you afford all the medications prescribed by your doctor?
If you decided to cash in some of your investments to cover a large expense (new car, home repair) would you pay tax on that money?
Have you withdrawn money from an IRA to make ends meet?
Have you had to make difficult choices to fund you tax bill?
Could you use more tax-free income every now and then?

How Can a Reverse Mortgage Help YOU?

The extra money can take the pressure off managing your daily expenses today as well in the future.
The money can give you the flexibility to help your family financially, now so you can have the pleasure of seeing them benefit from it today.
You can use the money to fund a new hobby.
With extra money in the bank you can make spontaneous plans, or forget the worry that unexpected expenses can cause.
You can invest the money to generate additional income.
Convert an IRA into a Roth-IRA using your reverse mortgage proceeds to pay the IRA tax bite.

Talking to your family

Most seniors consider their home part of the estate they will leave to their heirs. Below are listed the most common estate issue that are of concern to seniors and their families when considering a HECM Reverse Mortgage.

Your estate does not lose title to or control of your home. The HECM Reverse Mortgage becomes due and payable after the death of the last surviving borrower. How your heirs choose to repay the loan is up to them. They may choose to keep the home and repay the loan. They may choose to take out a new mortgage to pay off the loan. They may choose to sell the home repay the loan and distribute the remaining equity according to you wishes. As with any loan once it is repaid the lender no longer has any interest in the property.

Other assets in your estate are protected. The amount of money you qualify to receive from a HECM Reverse Mortgage takes into account the current and anticipated market value of your home. This means if you heirs choose to sell your home after your death, the proceeds of the sale are the only monies the lender can look to for payment of the loan. If the sale proceeds are not sufficient to pay off the loan FHA will make the lender whole and the family and the estate are not responsible to pay any additional funds. This will leave the balance of the estate intact for your heirs.

Your estate will benefit from any appreciation on your home. This means that if they sell the home any money realized above the amount owed the lender will belong to the estate.

Reverse Mortgages can help preserve assets

Tapping into your investments diminishes your capital and exposes you to taxes. Asset liquidation may also trigger drawbacks of income-tested government benefits. The proceeds from a reverse mortgage are received tax-free and as such creates no tax liability or benefit problems. Your other investments are preserved intact for greater growth potential for your estate, which will benefit your heirs.

A HECM is written against the EQUITY in your home with no prepayment required for as long as you or your spouse lives in your home. Because there are no payments required your home cannot be foreclosed on due to missed payments. You are required to pay your taxes, insurance and maintenance fees and to keep the house in good condition consistent with normal wear and tear.

Seven Steps to a Reverse Mortgage

Step One - Decide whether a HECM is right for you.
With the vast amount of information and misinformation surrounding Reverse Mortgages it is important to talk with a specialist that can answer all your questions and those of your family. Our experienced Loan Officers are always available to sit down with you, your family, your friends and advisors at a time that is best for everyone.

Step Two - Receive HUD-Approved Counseling
You must provide a Certificate of Counseling to your Loan Officer prior to application. HUD has provisions for you to participate in the counseling session by phone. Your Loan Officer is prepared to assist you in setting up your counseling session.

Step Three - Submit an Application
Applications must be made face-to-face. Schedule a face-to-face interview with a Loan Officer. Our staff is available to conduct your interview in your home, in our office or wherever you are most comfortable.

Step Four - Receive FHA Certified Appraisal
The full benefits you qualify for are based upon the results of an apprisal done by an appraiser selected by FHA.

Step Five - Lender Approval
During this step the lender will review the contents of the file, insure that all the information meets the standards set forth by the government. Of particular importance is the home appraisal and your counseling certificate.

Step Six - Document Signing and Closing
Once approve we will come to your home and present all the final documents for your review and signature.

Step Seven - Receive Proceeds
This is the last step. Three days after signing the documents the funds you have qualified for will be released to you. This three day period is a cooling off period during which you may cancel if you are not comfortable with you decision.