Reverse Mortgages with PCL Financial Group
6 Facts You Should Know About Reverse Mortgages Today
1. Reverse Mortgage amounts now to $4 million.
2. Borrowers never give up the title or ownership of their home.
3. Can be used to help pay for health care and postpone drawing down retirement assets.
4. As a non-recourse loan, you will never owe the lender more than the current value of your home.
5. Interest rates are comparable to conventional FHA rates. We are often able to provide low cost and no cost options.
6. To qualify, the loan is based on age, general living expenses, and available equity in the home.
What is a Reverse Mortgage?
A Reverse Mortgage is a type of loan for clients age 60 and older that allows homeowners to convert the equity in their home into cash income with no monthly mortgage payments. The maximum loan amount is $4M.
Reverse Mortgages can be taken as a lump sum, line of credit, fixed monthly payments, or a combination. While monthly mortgage payments are not required, the property must be your primary residence. You must maintain the property, pay your homeowners insurance, and pay your property tax.
The Home Equity Conversion Mortgage (HECM) loan is the oldest and most common reverse mortgage for homeowners 62 years of age and older. They are insured by the Federal Housing Administration (FHA) and unlike a traditional home equity line of credit (HELOC), the unused portion of the reverse mortgage line of credit grows over time, allowing access to the funds as the borrower ages. Lenders cannot reduce or revoke the line, as long as the terms of the loans are met, ensuring funds will always be there when you need them. Additionally, Reverse Mortgages are non-recourse loans meaning there is no recourse to you, your estate, or your heirs if the loan balance exceeds the home’s value at maturity provided you or your estate sell the property to pay off the debt. If you or your estate wants to retain the property, the balance must be paid in full.
“A majority of American homeowners in or near retirements have most of their net worth tied up in their home and are at risk of not having enough to maintain their living standards during retirement. A reverse mortgage an reduce that risk.”
Who are Reverse Mortgages for?
Reverse Mortgages are for people 60 years and older who are looking to have more control over their assets, investments, and cash flow, and be better prepared for retirement. Additionally, Reverse Mortgages are for people 60 years and older or their families who are looking to create a Senior Care funding strategy.
“Nearly 80 million baby boomers are expected to retire over the next 18 years.”
What can Reverse Mortgages be used for?
Reverse Mortgages can be used for a variety of things such as:
- Supplementing your income
- Buying a house or condo in an upscale area or active lifestyle community
- Paying off an existing mortgage with loan proceedings
- Take a dream vacation
- Covering healthcare costs
- Senior Care funding
- Paying taxes and insurance or a large expense
- Covering your grandkids college education
- Preparing for future needs
- Making home improvements
- Building a reserve fund
What are some of the benefits of a Reverse Mortgage?
- Easier to qualify for than a traditional loan
- No monthly principal or interest mortgage payments
- Retain ownership of your home as long as it’s your primary residence and you pay property related fees, taxes, and insurance
- Insured by the Federal Housing Administration
- Flexible Payout Options including line of credit, fixed monthly payments, a lump sum, or a combination
“Over 97% of Americans make no advance financial plans for Senior Care needs, yet 70% will need some form of Senior Care in their lifetime.”
What is the process like for getting a Reverse Mortgage?
One of our expert Reverse Mortgage Specialists will contact you to carefully assess your individual needs and financial situation, thoroughly explain the benefits and requirements of Reverse Mortgage products, and answer any questions to prepare you or your Reverse Mortgage counseling session.
In order to ensure that you understand all aspects of a Reverse Mortgage, you are required to have a 60 to 90 minute counseling session with an independent counsel who’s approved by the U.S. Department of Housing and Urban Development (HUD). This sessions can be in-person (required by some states) or over the phone.
Your Reverse Mortgage Specialist will help you complete the application and collect the necessary documentation. A required financial assessment will review your finances, credit history, credits, and debts to help determine if the borrower will need to set aside part of the mortgage proceeds to pay for loan obligations. A notary or lender representative will come to your home to assist you in signing your application and collect the supporting documents.
Your Reverse Mortgage Specialist will submit the paperwork and we’ll process your application. We’ll order a home appraisal, title paperwork, and existing mortgage payoff amounts. An underwriter will then review the application for approval.
When final loan documents are ready for your signature, we will contact you to schedule your loan closing, which can take place at your home. Any existing mortgages must be paid off with a portion of the proceeds from your Reverse Mortgage. After the closing and any applicable rescission period, the load will fund and you will receive your money.
To learn more about how you could benefit from a Reverse Mortgage in your retirement plan, or to get more information, call The Mark Klein Team at PCL Financial Group today at 818.865.0600 or email us at email@example.com