Home Equity Conversion Mortgage

 CalculatorThe Home Equity Conversion Mortgage (HECM) is commonly known as a Reverse Mortgage. It was established by the Government, regulated by the Department of Housing and Urban Development (HUD) and insured by the Federal Housing Administration (FHA).

Personal Analysis 2My goal is to provide homeowners 62+ a secure, sustainable place to live for the rest of their lives. This loan program was created to help seniors retire in their own homes. It allows you to convert some of the equity in your home to money you can use without the burden of monthly loan payments.*

Three Differences From Other Loan Officers: 

  1. I don’t promise things that I have no control over.
  2. I don’t tell you that I can do something that I can’t do.
  3. My main goal is to make sure my clients have a sustainable, safe place to live for the rest of their lives.
New Rules for HECM Reverse Mortgages as of October 2nd, 2017.

With the new regulations that were enacted October 2, 2017, FHA Insured HECM reverse mortgages now deliver more or less money to the borrower depending upon the Margin (or the Interest Rate for fixed interest rate loans) and the current market interest rate. This is because the Principal Limit Factor (PLF), which is the percentage of your home’s value that you qualify for by your age, now changes depending upon the Margin (or interest rate) of your loan. Your interest rate is the Margin plus the Annual LIBOR Index for adjustable rate loans. A lower Margin, will give you more money at first.

However, the costs involved for the lower Margins are more, and the costs are less for loans with the higher Margins. This is because the higher interest rate loans are more valuable over the long run, and costs may be built into the loan yield.

Lower Margin = More Money at First and Higher Costs
Higher Margin = Less Money at First and Lower Costs

Therefore, getting the right combination of Margin and Costs for each individual homeowner is a balancing act of sorts. It becomes most important to know how the homeowner plans on using the money. Using all the money at first to pay off a loan is very different than keeping most of the money in a line of credit to use when needed in the future. One would be better off with a very low Margin and paying higher costs, and the other would be better with higher Margin for a loan that provides less up front, with lower costs, but building a greater amount in the line of credit for use in the future. And of course, there are all the in between combinations. You need to get all the facts for different Margin and cost combinations so you can make an educated decision about what is best for you and your individual situation.

This is why you need a competent, experienced loan officer even more than before.

The following video describes a reverse mortgage accurately. However, it is for the loan prior to the October 2nd changes. I am making an updated video and will replace it soon. Please use the tab at the right if you would like to be notified when I complete the new video explanation.

Quick and Simple Explanation of a Reverse MortgageVideo
Open the section below to see a list of facts about the Home Equity Conversion Mortgage

Click to Open The List of Facts about Reverse Mortgages

Simple facts about the Home Equity Conversion Mortgage, commonly called a Reverse Mortgage:

• For people at least 62 years or older.

• The loan is designed to provide money from the equity of your home without the burden of loan payments.

• The Title remains in your name. The Bank DOES NOT own your home. There is a Trust Deed just as with any other real estate loan.

• Even if you use all the money you qualify for, you can stay in your home the rest of your life.

• The loan only comes due, and must be paid off, if you (or your spouse) do not occupy the home as your primary residence. The loan’s purpose it to provide a home for the rest of your life.

• There are no mandatory monthly loan payments. To provide for this the interest amount will be added to the loan amount each month so the loan gets a little bigger each month. See Optimizing Your Retirement Income for options.

• Of course, you must pay the taxes, insurance, HOA if any, and for home maintenance, as with any loan.

• When you pass, the home goes to your heirs. They have the option to sell or keep the home by paying off the loan, and they have ample time to decide. All remaining equity over the loan balance goes to your heirs.

• Allows for conversion of some home equity into cash without moving or selling.

• Independent counseling is required before application can be taken, this is to protect the borrower.

• Safe – highly regulated by HUD, with recent changes for more protection.

• Federally insured by the FHA.

• The money received is usually tax-free.

• All remaining equity, the amount over the loan, goes to you, your estate, or your heirs, never to the bank.

• Minimal credit qualification requirements.

• Minimal income qualification requirements.

• Non-recourse loan – If there is a downturn in the real estate market, and your home value declines below loan amount, you or your heirs will not owe the difference.

• Social Security and Medicare benefits are NOT effected.

• Not locked in — you can move, sell, or repay the principal balance at any time – no prepayment penalty.

• May take your money:

  • Most at one time
  • In monthly payments
  • Set up a Line of Credit to take your money only as you need it.

 

 

Other Videos:

The Secret of Variable Interest Rates with a Reverse Mortgage

3 Ways You Can Get Hurt by a Reverse Mortgage 

What if I die and have a Reverse Mortgage?  What will my heirs get?

Effects of a Reverse Mortgage on Income Tax, Medicare, Medi-Cal, Medicaid, VA benefits, & SSI

Why Should I Care About a Reverse Mortgage?

When Should You Use a Reverse Mortgage?

Why Would a Bank Make a Loan With No Monthly Payments, Like a Reverse Mortgage?

 

 

Starburst Dont

When you call the 800 numbers, you get a telephone sales person who is trained to sell you what makes them the most commission. The largest lender, with the old actor TV ads, boasts a ” 6-week paid training for sales positions.” Is that who you want to advise you about your largest asset, your home?

The best way to find out if this program could help you is by getting a Personal Analysis from someone you can get in contact with even after the transaction. There are many ways to structure the HECM loan program. It should coordinate with your Social Security and any retirement or pension that you may have. Find out which way will be best for your unique situation. Click on the tab at the right to contact me.

Our Company, All Reverse Mortgage vs. the others

It may surprise you but those “celebrities” you see all over TV have some of the worst independent consumer ratings in the industry. Compare All Reverse Mortgage and you will see the crystal clear difference, from customer service to loan terms we never compromise. Follow these links to see our ratings:

Top A+ Rating By The Better Business Bureau
Trustlink Independent Reviews 5 out of 5 Stars
eKomi Independent Reviews 4.9 out of 5 Stars

All Reveres Mortgage isn’t the largest, and we don’t have Old Actors on TV trying to convince gullible people to call phone sales people and get sold some form of a reverse mortgage. We are a strong, well funded mortgage banking company with solid, experienced professionals who work with financial planners, Realtors®, CPAs, attorneys, and homeowners in planning and funding the HECM Reverse Mortgages that best suit the client’s needs. We are based in California, with some of the strictest oversight and the most stringent mortgage rules in the country.

Click here to see Customer Testimonials

 Information about Mandatory Reverse Mortgage Counseling

How Reverse Mortgages are Used      Are Reverse Mortgages Really More Expensive?    Optimize Your Retirement Income      HECM Reverse Mortgage for Purchase


Contact me for more information and a free, no obligation consultation. Call 310-616-6965 or use the Contact Charles tab a the right. >>>
To find the amount you may receive, click the button below for the calculator.

Reverse Mortgage CalculatorButton PA

There is NO charge or obligation to having a private, confidential consolidation with me.

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The HECM reverse mortgage is complicated and should be structured correctly to prevent using your home’s equity too quickly. I review your unique situation, taking into account your Social Security income, any pension or retirement income, and together we see if you would benefit from this type of financing.

You may find that a HECM reverse mortgage is not right for you. If that is the case, it is not a loss for me. We will have met, and it is my hope that you will feel comfortable recommending me to your friends if they have questions about Note pinned copyHECM reverse mortgages.

Or Click on the tab at the right, put your information in, and I will contact you.

 

 

 

 

* My clients know when they get a HECM reverse mortgage from me that, as long as they pay the taxes, insurance, HOA dues if any, and keep the house maintained, they will have a place to live for the rest of their lives. That is the reward I get from doing this work.

 More details about Home Equity Conversion Mortgages
Informative Links:

National Reverse Mortgage Lenders Association, Find a HECM Housing CounselorFHA Reverse Mortgages for Seniors, Frequently Asked Questions about HUD’s Reverse MortgagesNew rules for reverse mortgages, AARP Living on a budget, US Government Senior Citizens’ Resources, California Department of Aging, Senior Resources State of California, Your Guide to Public Benefits, Home Care: Financial Assistance and Payment OptionsCalifornia Senior GatewayTop 10 Safety Tips for Seniors, Community-Based Adult Services, Long-Term Care Ombudsman ProgramLegal AssistanceSupplemental Nutrition Assistance Program-EducationDisease Prevention and Health Promotion, Los Angeles County Department on AgingConsumer Protection for SeniorsEnd-of-Life IssuesCaregivers’ ResourcesGrandparents Raising GrandchildrenMoney and Taxes for SeniorsTravel and Recreation for Seniors