Feb 142017
 

Beginning January of 2017 FHA increased the HECM loan limit (aka Maximum Claim Amount) to $636,150 (formerly $625,500).

The new maximum claim amount is 150 percent of the Freddie Mac’s national conforming loan limit of $424,100 and it officially became available for any case numbers issued on or after January

Reverse Mortgage Loan Limit

Reverse Mortgage Loan Limit

1, 2017. This applies to all areas within the United States, including Hawaii, Alaska, Guam, and the U.S. Virgin Islands.

But wait! Does that mean that you can actually get a loan amount of $636,150?  This part is a little confusing for the average person or even for a loan officer who typically just does traditional forward loans.  In the forward loan world, a loan limit actually refers to the amount of money a borrowing homeowner can borrow.

To shed some light on what it actually means, below is a definition of Max Claim Amount aka MCA.

Max Claim Amount – MCA = the amount of home value used in calculating the Principal Loan Limit on the FHA HECM. It is the lesser of the appraised value or the lending limit for HECM’s (limit is $632,150).

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Perhaps an example will help further explain how the HECM loan limit works.  A 70 year old man or woman would qualify to get 57.6% of their home’s appraisal value.  For example, if this same 70 year old had a home that was worth exactly $100,000.00 then they would be able to get a Home Equity Conversion Mortgage for $57,600.  If this same 70 year old had a home that was worth $200,000.00 then they’d be able to get a reverse loan for $115,200.  This goes on and on until your home is worth $636,150.00.  So, in the event a 70 year old’s home appraised for exactly $636,150.00 they’d get 57.6% of that or $366,422.40 in dollars and cents.  This same 70 year old would not get any more than $366,422.40 if there home appraised above the HECM loan limit.

So you see, you don’t actually get a loan of $636,150.00.  Below is a table that shows the maximum available loan amount for several different age groups.  The figures are based on a home that appraises for $636,150 or higher.

Borrower Age 2017 Loan Limits 2016 & Prior Loan Limits
62 $333,342.60 $327,762
70 $366,422.40 $360,288
78 $407,136 $400,320
86 $451,030.35 $443,479.50
90+ $477,112.50 $469,125

 

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Shawn Lawrence Vaillancourt

NMLS License # 387151.  Licensed in CO, CA, WA, OR, MD, VA

(714) 271-8524

For more in depth info on all Reverse Mortgage subjects, check out

Reverse Mortgage California

Reverse Mortgage Loan Advisors

Feb 072017
 

Like most financial tools, a California Reverse Mortgage is not for everyone.  At the end of the day, one may consider a reverse mortgage for several reasons.  Typically, it’s to get more money or access more money (or to reduce their monthly liabilities by eliminating their mortgage payment).

That being said, here are some alternatives to doing a Reverse Mortgage (I called them the A, B, C’s):

Assets – Naturally, you can keep doing what you’re doing now and continue to live on the assets you have now (or shall I say, “live on the assets you DON’T have now”). In other words, do nothing.  Are you living the life you’ve always wanted? If you are, perhaps a Home Equity Conversion Mortgage (a.k.a.HECM) is not for you.

Borrow – you can borrow the traditional way by qualifying with credit, income, and assets.  Things to consider are; 1. Do you want a mortgage payment?  2. If you don’t have enough money coming in now, does borrowing the traditional way really help?  Or is it just delaying the inevitable? 3. If you borrow the traditional way, does it potentially eliminate the reverse mortgage as an option?  (for example, if you borrow 85% of your appraised value, there’s a good chance you won’t qualify for a reverse mortgage later because will have already borrowed more than you’d get with a reverse mortgage?…..or, would a Reverse Mortgage with NO monthly payment simply work better?

Children – If the family is willing, you can always borrow from them or get them to help out financially.  Many have that option and Many do not.  What about you?

Downsize – you can always sell your home and downsize (or go live with family).  Does moving out of your home seem like the best option for you?  Where would you go?  How long have you lived where you’re at now?  Have you really explored what the move is all about (i.e., the cost, the time involved with moving years of things, will have room for all your things or will you have to get rid of some or get a storage space?  Maybe this is the best option for you.  Only you can answer that question.

Enter the work force again.  Going back to work can help fill a monetary gap.  What kind of work would you do?  Would you try to reenter your former career?  Would you start over?  Depending on what kind of work you do, how long can you keep it up?  Maybe this is right for you.  Many retirees get bored because there so used to working and staying busy.

Equity release or equity sharing is another option.  Here is the short version of what this is; Although each company structures these transactions in different ways, the basic premise of the agreement is the same. The homeowner agrees to give up part of a their home’s future appreciation in exchange for cash.  The homeowner would typically give up 10% to 15% of their home’s current value.  This is also known as a REX Agreement.

…………………or, the remaining alternative of a Reverse Mortgage may be right for you.  A reverse mortgage will allow you to:

Find Peace of Mind.  The Reverse Mortgage:

  • Does not require any monthly mortgage payments
  • Allows you to stay in your home for as long as you live
  • Is easy to qualify for
  • Can help eliminate for alternative borrowing such as a loan with a mandatory payment or borrowing from family or seeking their assistance
  • Can eliminate the need to consider going back to work or continuing to work.

 

No matter how you slice it, not every option is right for every person.  If you think a reverse mortgage is right for you OR if you’d like to find out more please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

www.reversemortgageloanadvisors.com

Jan 242017
 

Are you wondering about your reverse mortgage eligibility?

A reverse mortgage loan can be a great way to subsidize your income as you approach or enter your retirement years.  Before one starts to seriously explore and / or shop for a reverse mortgage, it’s important to ensure that you meet the eligibility requirements in the most basic sense.  That way you’re not wasting your time looking into a product that you don’t qualify to get.

Reverse Mortgage Eligibility

Reverse Mortgage Eligibility

Here are the basics when it comes to who is eligible to get a reverse mortgage.

First and foremost, you have to be aged 62 or older (United States).

Second, there are specific requirements for the collateral (your home).  For example your home must be one of the following to get a reverse mortgage:

  • SFR / Single family residential home.
  • Town home.
  • Condominium with an FHA / HUD approved homeowner association.
  • Double Wide manufactured home (most lenders do this, but not all) built after June 1976.
  • Single Wide manufactured home (very few lenders to this, but there are some out there so if one lender tells you know, move on to the next one) built after June 1976.
  • Modular homes
  • Two to four unit properties.

Thirdly, the home you wish to encumber by a reverse mortgage must be your primary residence.

A fourth eligibility requirement is that there is an equity requirement.  Depending on your age, a reverse mortgage lender can lend anywhere from 52.4% of the appraised value of your home to 75% of the appraised value (it moves on a sliding scale with a 62 year old getting 52.4% and a 90 year old getting 75%).

Frequently Asked Questions About Reverse Mortgage Eligibility

Does every borrower have to be aged 62 or older? Answer à If a couple is married, and one spouse is 62 or older and the other spouse is younger than 62, you can do the loan and both spouses can live in the home until they both pass away or move out permanently.

  1. If my house is free and clear, can I still get a reverse mortgage? Yes, one can still get a reverse mortgage if their home is free and clear.
  2. If I have a loan on my house, can I still get a reverse mortgage? Yes, one can still get a reverse mortgage if they have a loan on their house now (equity requirements apply).

Obviously, there is more to it, but if you meet these very basic reverse mortgages eligibility requirements, there’s a chance this loan might work for you.

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Shawn Lawrence Vaillancourt

NMLS License # 387151 in CA, CO, VA, MD, WA, OR

I also have a staff of reverse mortgage specialists in virtually every other state in America.

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

www.reversemortgageloanadvisors.com

Jan 232017
 

Jumbo Reverse Mortgage – Jumbo Reverse Mortgages vs HECM Reverse Loans

The FHA insured Home Equity Conversion Mortgage (a.k.a. Reverse Mortgage) is by far the most widely used reverse mortgage program in the United States (at the time this was published in January 2017).  In fact, it’s virtually the only option right now for a home equity conversion mortgage.  At one point in the 2000’s there were a handful of options available (FHA version, Fannie Mae, and several proprietary products).

Jumbo Reverse Mortgage

Jumbo Reverse Mortgage

At this point in time there is the FHA version and a jumbo version. While there may be many lenders and brokers offering a jumbo reverse mortgage, as of now the source of the money only comes from two places really.

Here’s a highlight of the differences between the FHA version and the Jumbo reverse mortgages:

Amount you can get:

FHA – The maximum funds available ranges from $333,342  and $477,112.  The aforementioned potential maximum loan amounts are for a 62 year old and a 90 year old respectively (with a home value of $636,150 or more).  The amount you get moves on a sliding scale.  The older you are, the higher the percentage you get (at age 62 you get 52.4% of the appraised value while at age 90 you get 75% of the home’s appraised value).

Jumbo – With the Jumbo, you can get up to $2,250,000.00.  The amount you get is much more conservative.  For example, a 62 year old only gets 21% of the appraised value.  Again, the amount you get moves on a sliding scale.  The older you are, the more you get.  The jumbo maxes out at age 87 where you can get 50% of the appraised value.

Differences pertaining to condominiums:

FHA – In order to do an FHA insured reverse mortgage on a condominium, the condominium’s Home Owner’s Association needs to be FHA approved.

Jumbo – This type of reverse mortgage can potentially be done on a condominium whose HOA is NOT FHA approved, but it will have a slight reduction in the percentage of funds one can access.

Fixed vs. Line of Credit

FHA – With the FHA version of the reverse mortgage, there are a few options.  A couple of them come in the form of a Line of Credit, which is always in the form of a variable rate.  Even with a traditional forward loan, credit lines are always a variable rate and never fixed.

FHA also has a fixed rate of interest option.  Most people don’t opt for this at this point in time because it usually reduced the amount of funds available (exceptions may apply).

Jumbo – The only option available with the jumbo home equity conversion mortgage is a fixed rate option.  This has several implications.  First, the fixed rate is higher than the one available for the FHA version.  Second, you cannot choose the loan amount.  Basically, the amount you get is solely dictated by your date of birth and appraised value.  You cannot choose to take a lower amount.  You basically get all the funds up front in a lump sum.

State Availability

FHA – The FHA Reverse Loan is available in all 50 states, Guam, Puerto Rico, and the U.S. Virgin Islands (the company and loan officer originating the loan needs to be licensed there though).

Jumbo – At present (January 2017), the jumbo is ONLY available in AZ, CA, CO, CT, DC, FL, HI, IL, LA, NJ, OR, PA, RI, SC, TX, VA, & WA.  However, the state availability footprint is slowly growing, so if it’s not offered in your state today it may well be at any time after January of 2017.

In conclusion, the FHA and Jumbo are markedly different in several ways, but the Jumbo can occasionally fill a gap that the FHA reverse mortgage cannot.  The Jumbo can allow certain people that have higher valued homes and higher loan balance take advantage of the reverse mortgage program.  On the downside, it does have a slightly higher interest rate and the percentage lent (percentage of the appraised value) is more conservative.  The jumbo also requires two appraisals.

For your free Reverse Mortgage  brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Shawn Lawrence Vaillancourt

NMLS License # 387151 in CA, CO, VA, MD, WA, OR

I also have a staff of reverse mortgage specialists in virtually every other state in America.

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

Reverse Mortgage Advisors

Dec 302016
 

When it comes to a reverse mortgage, there are terms that are unique to just the reverse mortgage / HECM program.  The intent of this glossary is not to provide a full mortgage term glossary of terms, but mainly just terms one will encounter as they explore what a reverse mortgage is and what it can do for them.

Reverse Mortgage Glossary

Benefit – The amount of Principal Limit / Funds available to be dispersed to the borrower.

reverse mortgage glossary

reverse mortgage glossary

Counseling – 3rd party counseling is a requirement to do a HECM/Reverse Loan. The counselor’s job is educate the older homeowner in regard to RM’s, to inform them of the alternative options available to their given situation, and to assist in determining which particular HECM product fits their needs.

Durable Power of Attorney – A legal document that enables an individual to designate another person to act on their behalf even in the event the individual becomes disabled or incapacitated.

Expected Interest Rate – Used to calculate how much money the borrower will receive and based on the 10 year LIBOR SWAP rate plus an acceptable margin.

FHA – Federal Housing Administration (a division of HUD) insures lenders against loss in the event that a borrower defaults on their loan.

FHA Case Number – This establishes the FHA connection to the property and this number stays with the property until the loan is satisfied.

Floor – The lowest an interest rate can go.

Forward Mortgage – A traditional mortgage where the borrower makes monthly payments and pays the balance down over time.

Fully Indexed Rate – The note rate that is based on the margin and the index added together

Growth Rate – The rate at which the unused line of credit grows.  On a HECM, it grows at the note rate plus 1.25%.

HECM –  Acronym for Home Equity Conversion Mortgage which is just the FHA version of the Reverse Mortgage.

HECM 60 Fixed – The FHA reverse mortgage that has a note rate that is fixed for the life of the loan.  MIP can vary dependent on the utilization.  If 60% or below, MIP is .5% of appraised value or MCA (whichever is lower).  If above 60% utilization, MIP is 2.5% of Appraisal or MCA.

HECM 60 LIBOR – The FHA reverse mortgage that has a note rate that is adjustable monthly.

HECM 60 Annual – The FHA reverse mortgage that has a note rate that is adjustable yearly.

HUD – Department of Housing & Urban Development.  Works as a lending facilitator and helps borrowers by offering counseling services to potential mortgage clients.

Initial Interest Rate – The actual interest rate on the loan, changes monthly (or yearly on the annual), and is based on the 1 month LIBOR or 1 year LIBOR plus an acceptable margin.

Index – Part of the fully indexed rate.  This is usually a published rate such as the 1 month LIBOR or 1 year LIBOR used on the HECM LIBOR and HECM Annual (respectively).

Incompetent – The inability of a senior to make rational legal, medical or healthcare decisions as determined by a licensed professional or physician.

Irrevocable Trust – A trust that cannot be changed or canceled once it is set up without  the consent of the beneficiary.

Leased Property – The ownership of the land where a structure resides rests with another party not the owner of the structure.

LIBOR – Most common index used on adjustable rate mortgages.  Stands for London InterBank Offered Rate, and is the daily referenced rate based on the rate banks offer to lend unsecured funds to other banks in the London wholesale money market.

Life Estate – The ownership of land for the duration of a person’s life and a legal arrangement where the “life tenant” during his life or her life retains use, possession, and maintenance of the property.

Life Expectancy Set-Aside:  This is money that is set aside from the funds available to cover the cost of the property taxes and/or homeowner’s insurance for the expected life of the loan.

Line Of Credit (LOC)- A reverse mortgage benefit option that allows the borrower to make draws against the equity of their home.  The benefit on this option also has the opportunity to grow larger over time. On the HECM, the unused portion of the LOC grows at the note rate plus 1.25%.

Lump Sum – A reverse Mortgage benefit option in which the borrower receives a large sum of cash upon the closing of the loan.

Manufactured HomeHousing units built in factories and transported to the sites for use.

Max Claim Amount – MCA = the amount of home value used in calculating the Principal Loan Limit on the FHA HECM. It is the lesser of the appraised value or the lending limit for HECM’s (limit is $625,500).

Mobile Home  – Housing units built in factories rather than on site produced prior to the 1976 HUD code enactment.

Modular Homes – Homes built in factories in multiple modules or sections then delivered to their intended site of use and assembled. Modular Homes are considered Single Family Homes.

Mortgage – The document that ties the home as collateral for the note or loan.

Mortgage Insurance Premium – A monthly payment paid by the borrower for mortgage insurance.  On a HECM this is added to the Principal Loan Balance.

Non Recourse Loan- A mortgage in which the borrower is protected by the fact that the home is the only asset that can be used to repay the note.

Note – The terms and conditions of the loan per the terms of the note for the loan.

Note Rate – The actual rate of the loan per the terms of the note for the loan.

Origination Fee – The charge for originating the loan.

Pre-Payment – Payment of the mortgage loan before the scheduled due date.

Principal Loan Balance  – The amount used at settlement to pay liens and settlement charges.  When the loan is official, this will accrue interest and grow as servicing fees, any monthly draws, any monthly advances, interest, and monthly mortgage insurance accrue.

Principal Loan Limit – The gross amount a borrower will qualify for with a reverse mortgage.

Principal Limit Lock –  Locks in the clients benefit and is secured from when the client signs application and extends to 120 days past the opening of the FHA case number. The client will receive the best of market from the day they sign or the day they close.

Planned Unit Development (PUD) – A project or subdivision that includes common property that is owned and maintained by a homeowners association for the benefit and use of the individual PUD unit owners.

Rate Cap – The maximum amount an adjustable rate mortgage can adjust up or down.  On a HECM there are no periodic caps on the monthly LIBOR (lifetime cap 10% over start rate) and the annual LIBOR adjusts 1 time per year (lifetime cap 5% over start rate and 2% per year).

Recording Fee – The fee to record all of the mortgage documents with the county where the property is located.

Repair Set Aside – A portion of the principal loan limit withheld until necessary repairs have been completed as a condition of closing the loan.  Once the repairs have been completed and approved, this portion of the Principal Loan Limit will become available to the borrower.

Rescission Period – Federal law provides a 3 day “right of rescission”. This is the option for the client to cancel the contract for the loan without penalty within 3 business days (including Saturdays).

Residual Income – As it pertains to reverse mortgage, residual income refers to the amount of income left over monthly after subtracting the following from your total gross monthly income.  The formula is Gross income – monthly amount for housing expenses (taxes, homeowner insurance, HOA, etc.) – monthly liability payments on credit report (car loans, credit card loans etc.) = your residual income.

Reverse Mortgage – A mortgage in which the borrower makes no payments and the interest is added onto the balance of the mortgage.  The balance will grow until the borrower fully satisfies the loan.

Revocable TrustA trust in which any of its provisions can be changed, or the trust itself can be cancelled at any time by the grantor.

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Shawn Lawrence Vaillancourt

NMLS License # 387151 in CA, CO, VA, MD, WA, OR

I also have a staff of reverse mortgage specialists in virtually every other state in America.

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

Reverse Mortgage Advisor

Dec 222016
 

When it comes to Reverse Mortgages in general, they tend to be a grossly overlooked financial tool by many homeowners and financial planners alike.  Yet, surprisingly, many homeowners and financial planners don’t truly and intimately know how these financial products actually work.  Often times they currently overlook them due to outdated information and / or misconceptions that just aren’t true.

However, in recent years Reverse Mortgages (AKA, HECM’s which stands for Home Equity Conversion Mortgages) have been gaining momentum among the financial planning community.  This is mainly because many have made a concerted effort to really understand this financial tool. Frankly, this is a breath of fresh air as I firmly believe a financial planner should have a firm grasp on the ins and outs of ALL financial tools.

While we’ll briefly discuss what a reverse mortgage is, the intent of this article is not to educate you on all the minute details of the reverse mortgage.  Rather, it’s to discuss how a reverse mortgage

can be used to purchase a home.

What a Reverse Mortgage is in the simplest of terms:

Using A Reverse Mortgage to Purchase A Home

Using A Reverse Mortgage to Purchase A Home

A HECM is a home loan like any other that enables a homeowner to access a portion of their equity and convert it into currency they can actually use.  Rather than making a payment every month to pay down the balance, it does not require a monthly payment for as long as the homeowner lives or for as long as they live in their home.  In essence, the payment stream is reversed.

Wait, didn’t I mention converting equity to a usable currency?  Yes I did and the following will explain how it translates into using a HECM for purchase.

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

It’s important to know “how much you get” when you do a Reverse Mortgage. 

You have to be at least age 62 to get  this type of financing in the good old USA.  The amount you get moves on a sliding scale that increases up until the point where a homeowner is 90.  You don’t get any additional funds for being aged 91, 92, or 93 etc.  The range (As of August 2014 through the present (November, 2016) is 52.4 percent to 75 percent.  If a homeowner or home purchaser is 62 or older, but has a spouse that is younger than age 62, then the percentage you get is less because it would be based on the younger spouse’s age (allows both spouses to live in the home for the rest of both of their lives).

The two big differences between a HECM for purchase loan and a traditional loan:

  1. With a reverse mortgage, the homeowner does not need to make a monthly mortgage payment for as long as they live or for as long as they live in the home (although you can if you want to or need to for any other strategic financial reasons). This is what makes this type of loan so desirable for many.  It gives the homeowner a tremendous amount of control financially and eliminates the burden of a housing payment.
  2. There are many traditional loans that are geared towards low or no down payment. If that’s what you need, this is not the loan for you.

Here’s roughly how it might work for a 62 year old that’s looking to downsize.  Let’s say that below is there current scenario:

– Home that’s being sold value = $175,000.

– Amount owed = $35,000

– Cash realized after sale of home (not including any real estate agent commissions) = $140,000.

 

In this example, we’ll say they are buying a house for $100,000.  Often times, retired or older homeowners will pay cash for the home they are downsizing to.  It can be a good idea because you can reap the benefit of selling the bigger home for more than what the new home will cost and then pay cash for the new home (eliminating a mortgage payment) and still have money left over.

So, in this case the homeowner would take $100,000 from the proceeds of the sale of their previous home and be left with $40,000 in the bank on top of what they may already have (or not have).

For your free Reverse Mortgage California brochure, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Here’s how it would look if the same couple used a reverse mortgage to buy the home:

ASSUMPTIONS: Youngest buyer/borrower is age 62.

Remember, at age 62 you get about 52.4% of the appraised value (or purchase prices).  So, if this couple used a reverse mortgage to purchase their $100,000 home they’d get a reverse mortgage for $52,400.  In this case, they’d need to put the difference of $47,600 as a down payment.  Hence, of the $140,000 of the sale proceeds they’d have $92,400 left over to keep in the bank (minus a small amount for closing costs).

For some, it’s a no brainer.  You can buy a home and NOT have a mortgage payment with both scenarios, but if you pay cash, you only have $40,000 left over.  If you use a Reverse Mortgage (HECM) for purchasing your home, you’ll have around $90,000 left over.  Not bad!

Not all financial products are for everyone, but the reverse mortgage purchase loan can be a very strategic, smart way to purchase your next home (or, if you’re a real estate professional, a great way to help get your clients into a new home).

For more info on a Reverse Mortgage purchase loan or and traditional HECM / Reverse Mortgage contact:

Shawn Vaillancourt (714) 271-8524

slvReverseMortgage@gmail.com

NMLS#387151

Licensed in the following states; CA, CO, MD, OR, VA, WA

I also have a staff of reverse mortgage specialists in virtually every other state in America.

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

Reverse Mortgage Loan Advisor

Jul 292014
 

Reverse Mortgage Payment Plan Options – What Options Do I Have With A Reverse Mortgage?

Reverse Mortgage Payment Options

Reverse Mortgage Payment Options

 In recent years the most popular payment plan option for a reverse mortgage has been to take the lump sum payment at closing.  However, there are numerous ways a reverse mortgage applicant can take their money.  It’s important to do what’s right for YOU given your financial objectives.  The different ways are as follow:

  1. Lump Sum payment

    – You have the option to take 1 lump sum payment at closing.

  2. Line Of Credit

    – You can leave all of your money or a portion of your money in a line of credit to use when and how you see fit.  The nice thing about a line of credit is that your available credit grows based on your note rate plus 1.25%.  The line of credit is also guaranteed to never be cut down or shut down for as long as you live or for as long as you live in your home.

  3. Tenure –

    You can also receive fixed monthly payments for as long as you live or for as long as you live in your home.

  4. Modified Tenure

    -You’ll also have the option of selecting a monthly payment that’s lower than your standard tenure payment, but will also have a line of credit for you to use at a later date.

  5. Term

    – Another reverse mortgage payment plan option is one that allows you to choose a set length of time or dollar amount for your monthly payment.  Note, if you select an option that allows for a larger monthly payment than your allotted tenure payment, then it may not continue until you pass away.

  6. Modified Term

    You have the option to receive a payment monthly for a fixed period of time and for a fixed dollar amount and a line of credit for as long as you remain in your home.

  7. Partial Lump Sum

    You will also have the option of taking just part of your benefit as a lump sum payment.  The remaining monies are distributed using one of the other aforementioned payment plan options.

In terms of the payment plan options available for a reverse mortgage, the program is extremely malleable and can be customized to suit your needs based on your financial objectives.

For your free Reverse Mortgage California brochure and / or a Benefit Proposal custom tailored for you, please email slvReverseMortgage@gmail.com   OR shawnv@ReverseMortgageCalifornia.biz

Shawn Vaillancourt

NMLS 387151

(714) 271-8524

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

Reverse Mortgage Loan Advisors

Jan 252014
 

Are you considering using a Reverse Mortgage for your property in California?  Let us help you navigate through the process.  We’ll cover it all, the good, the bad and the ugly.

Let’s face it, California is not a cheap and easy market to live in.  Many pockets of California are among a few of the most expensive markets nationally, so a Reverse Mortgage can be a phenomenal tool to help aging homeowners navigate the waters of their “golden years” in California – The Golden State.

California Reverse Mortgages – The Basics of the FHA insured Reverse Mortgage

reverse mortgage california

Reverse Mortgage California

A very simplistic way to explain a Reverse Mortgage is as follows; for all intents and purposes it works JUST like a traditional mortgage, but there are just a few tiny, key differences.

First, there is an age requirement.  You have to be aged 62 or older to qualify.  If you’re married, we have to base the available loan amount on the date of birth of the youngest spouse.

Second, there is an equity requirement.  As of August 2014, you can get anywhere from about 52.4% – 75% of your homes appraised value with a Reverse Mortgage.  It all just depends on your age.

For your free Reverse Mortgage California brochure, please email shawnv@ReverseMortgageCalifornia.biz

The third and BEST difference (for 99.99% of older homeowners):

It is that there are NO monthly payments due for as long as you live or for as long as you live in your home(The Reverse Mortgage is intended to be used only on your primary residence (although there have been times over the years where it could be done on your 2nd home)).

For many, this type of loan can lift a heavy burden by eliminating any mortgage payments they may currently have. For others that might own there home free and clear, it can infuse a tremendous amount of money into their bank account to be used however they chose.

What would you like a reverse mortgage do do for you? 

This is the most important question you can ask yourself if you or a loved one is considering a reverse mortgage in the great state of California.

Reverse Mortgage Frequently Asked Questions:

What about my property taxes and insurance?

It’s true, there are no monthly mortgage payments due to the bank that services your reverse mortgage loan, BUT keep in mind you will need to pay your property taxes and insurance.  Remember, this is just a loan and you still own your property in the same fashion as if you had a traditional mortgage.  The bank does not go on title at all and you are able to leave your home to whomever you like in your will.

How much money can I get if I do A Home Equity Conversion Mortgage?

Remember, the amount you get is always based on the youngest homeowner.  A 62 year old can get up to 52.4% of their home’s appraised value.  On the other side of the spectrum, a 90

California Reverse Mortgages

California Reverse Mortgages

year old can access up to 75% of their homes value (and this is the maximum loan to value, even if you are older).  The older you are, the more you get and the amount you get moves on a sliding scale from

52.4% to 75% for those aged 62 – 90 years old.  Here are a couple of examples of how much you can borrow based on your age:

62 Years old – 52.4% of appraised value.

68 Years old – 56.2% of appraised value.

74 Years old – 60.6% of appraised value.

80 Years old – 65.7% of appraised value.

86 Years old – 70.9% of appraised value.

Is there ever a time where I will have to pay the loan off or will have to resume making payments?

To be clear, when you do a reverse loan, you are responsible for maintaining insurance and paying your property taxes.  In terms of making a principal and interest payment, you will never have to do that for as long as you live or for as long as you live in your home.  That does not change, even if you did the loan at age 62 and lived to the age of 110.

Am I able to make a payment?

Yes, you can definitely make a payment.  In fact, you can pay any amount you want.  There just no required payment.  If you want make an interest only payment, you can.  If you want to pay $100 per month, you can.  This would just simply keep the loan balance from growing as rapidly.  And of course, it would help you maintain a larger equity reserve for your children (or whomever your heirs might be).  The key with a HECM is that there is total flexibility.  YOU are in charge of your financial destiny.

Will I be able to qualify to get this type of financing?

Reverse Mortgage Brokers California

Reverse Mortgage Brokers California

Here are the basic qualifications:

  • The home has to be your primary residence and cannot currently be done on a 2nd home or rental property.
  • As far as property types go, one can get a reverse mortgage on a double wide manufactured home (has to conform to HUD guidelines), a modular home, a condominium that has an FHA approved homeowner association, a townhome, a single family home, and a 2-4 unit property (you have to reside in one of the units).  HUD does allow it do be done on single-wide manufactured homes, BUT very few lenders actually offer this.
  • There’s the age and equity requirement which we’ve already discussed.
  • Credit guidelines are pretty relaxed.  Credit scores do not matter, but your housing payment history for the last 1-2 years does matter along with your 1 year pay history for your revolving trade lines like credit cards.
  • There are no debt to income requirement, but there are residual income requirement.  Basically, after you add up all the monthly payment that show up on your credit report and monthy property tax and insurance liabilities and utilities, you need to have some residual income left over.  The short version is that if you have a 1 person household, you need to have a little over $500 in residual income and the exact amount varies depending on what part of the country you live in.  If you have a 2 person household, you need a little over $900 in residual income.  Again, the exact amount depends on where exactly you live.
  • Regarding your credit, if it’s been good in the last 2 years and you’ve paid your taxes on time (property taxes), you should have no worries and it will just come down to the age/equity requirement.
  • If your credit is not sterling, you may still be able to do a reverse mortgage, but you may have to set some of the loan proceeds aside to pay your future taxes and insurance.

What steps are involved in getting a Reverse Mortgage in California (or any other state for the matter)??  (The list looks long, but it’s pretty easy)

  1. Do your own investigation and see if you meet the basic age and equity requirements.
  2. Have your loan officer send you a proposal that details all the particulars (interest rates, estimated appraised value, loan amount, loan costs, counseling documents, NCOA booklet, etc.).
  3. Write down any questions you have once you review the package.
  4. If it works for you, set up a counseling appointment.
  5. Ask the counselor to send your loan officer a faxed copy of the counseling certificate (assuming you want to move forward).
  6. Connect with your loan officer to take an application for you to sign and return.
  7. Lenders can order the appraisal when they have a signed application and a signed counseling certificate.
  8. Have a discussion with your loan officer in regard to certain things the appraiser will be looking for when he comes to your home (i.e., do you have smoke detectors, CO detectors, etc.?).
  9. Provide your loan officer with copies of the items he needs to process the loan (i.e. income documentation, mortgage statement, etc.).
  10. Once the appraisal comes back to the lender/broker, hopefully your loan is all processed and ready to go to the underwriter.
  11. The underwriter will have a few conditions which your loan officer and processor will work on (they may need additional things from you).
  12. Get final approval and then sign your final reverse mortgage documents.
  13. Wait out the 3 business day cooling off period.
  14. Your loan funds and you enjoy not having a mortgage payment.

For your free Reverse Mortgage California brochure, please email shawnv@ReverseMortgageCalifornia.biz

Shawn Lawrence Vaillancourt

NMLS License # 387151.  Licensed in CO, CA, WA, OR, MD, VA

(714) 271-8524

For more in depth info on all Reverse Mortgage subjects, check out

www.reversemortgagecalifornia.biz 

Reverse Mortgage Loan Advisors

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