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THE REVERSE MORTGAGEEXPOSED!PROCEED WITH CAUTIONHOW TO MAKE A SMART DECISIONON A REVERSE MORTGAGE Lenders paint an appealing picture. but when a deal looks too good to be true, itusually is. Find out how to cut through the promises and get to the facts. The big mistake people make with a reverse mortgage. that can easily createfinancial nightmares for their children. Why a reverse mortgage can be great for some people, but a disaster for others.and much, much, more.Brought to you by: DynamicWealthReport.com
Is A Reverse Mortgage A Good?Probably not.According to CBS News, “. only about 2 percent of eligible homeowners have takenout a reverse mortgage. Cost is cited as the most common impediment.”But there are some situations where a reverse mortgage can be used as one piece ofan overall package of financial solutions.If you are determined to stay in your home for as long as possible, and if you’re short oncash, the reverse mortgage may be a sensible last resort loan option.Your first challenge is to make sure the reverse mortgage is not leaned on as acomplete solution to your financial situation.Your second challenge is to avoid the tempting offer of the lender, and not take on moredebt than you really need.These decisions can get complicated. Professional advice from an accountant or aknowledgeable financial advisor is a good idea.Before you move forward, here are the facts you need to protect your home, yourfinancial security, and your heirs.The 3 Basic Types Of ReverseMortgagesFEDERALLY INSURED REVERSE MORTGAGESThese are called Home Equity Conversion Mortgages, or HECMs. They are the mostcommon reverse mortgages and are backed by the U.S. Department of Housing andUrban Development (HUD).The money they provide can be used for any purpose.SINGLE PURPOSE REVERSE MORTGAGESBrought to you by: DynamicWealthReport.com
These are provided by certain nonprofit organizations, along with state and localgovernment agencies. They are designed primarily for low income borrowers and comewith restrictions on how the proceeds can be used.PROPRIETARY REVERSE MORTGAGESThese are private loans that don’t come with the backing of HUD insurance.The money they provide can be used for any purpose.The Pros Of Reverse Mortgages Reverse mortgages can provide income when it’s needed. The amount of income and the timing of its payment can be chosen by theborrower. There can be a line of credit set up to draw on or regular monthlypayments. In most cases, this income is not taxed. Reverse mortgage income doesn’t impact Medicare or Social Security payments. You’re protected if the value of your home falls below the loan amount of thereverse mortgage. This is because of what’s known as a non recourse clause.(This protects your heirs as well.) Your heirs can inherit the remaining home equity after they pay off theoutstanding balance of the reverse mortgage loan. Reverse mortgages may be a good option for some downsizing seniors. Withproper advice, some borrowers use them to buy new homes. Reverse mortgages provide flexible disbursement options (such as regularmonthly payments or a line of credit). In most cases, you stay in your home without making monthly mortgagepayments.Brought to you by: DynamicWealthReport.com
The Cons Of Reverse Mortgages Reverse mortgages are usually more expensive than traditional mortgages. Medicaid payments may be affected. You (or your heirs) don’t keep your home unless the reverse mortgage loan ispaid back. The value of your estate may go down as you spend the proceeds of the reversemortgage. You may outlive your equity. There may be other kinds of loans that are less expensive, less restrictive, andmore suitable. Application fees can be expensive. The origination fee and the closing costs arealmost always higher than what you pay for a conventional loan. Flexibility is limited. As an example, if something unexpected happens thatforces you to move out of your house, your loan immediately becomes due.(This can easily turn into a financial hardship for your children.)WARNING: Upfront Fees Can Be HighLet’s say you want a reverse mortgage.If so, you’ll need to pay a 2% mortgage insurance premium. This fee has recentlysoared, quadrupling from .5%.That’s because loans are typically backed by the U.S. Department of Housing andUrban Development (HUD), and Washington has taken a financial bath on reversemortgages.A recent report to Congress made by the Federal Housing Administration (FHA)revealed that the special fund used for reverse mortgages is 7.7 billion in the hole.This is the account used to insure HECM loans so that both lenders and borrowers areprotected.Brought to you by: DynamicWealthReport.com
What’s the max you can expect to pay for a reverse mortgage? Lenders are allowed tocharge up to 6,000 in origination fees.How To Make Sure You’re EligibleFor A Reverse Mortgage You can apply for a reverse mortgage if you are 62 years old, and either ownyour home outright, or if your outstanding current mortgage balance is lowenough to be paid off with the loan proceeds from the new reverse mortgage. You must plan to live in the home for the life of the loan. You need to show that you have the financial ability to pay for insurance, taxes,and upkeep. You’ll need a minimum of 30 40% equity in your home. The exact percentage isoften tied to your age.Where To Get A Reverse MortgageThe market is changing. Just a few years ago, big banks such as Wells Fargo andBank of America were major players. Now, they’re out of the reverse mortgagebusiness.Why? The banks have a hard time measuring the ability of the borrower to keep payingtaxes, insurance, and other upkeep expenses for the property.But for people who want a reverse mortgage, there are plenty of lenders. The top 3, interms of loan value, are. American Advisors GroupFinancial Freedom Senior Funding CorpOne Reverse MortgageLenders do not always operate in all 50 states. Their products may differ, and their feesdiffer, so if you get to the point where you are considering a reverse mortgage, gathercomplete information.Brought to you by: DynamicWealthReport.com
When It Makes Sense To Get A ReverseMortgageIs a reverse mortgage right for you? As we mentioned, probably not.But if you’re willing to risk losing your home at some point, if you want to keep living in itfor the time being, and if you’re willing to pay high fees, investigate a reverse mortgage.A reverse mortgage can solve the problem of not enough cash from your SocialSecurity and your savings.Make sure you go in with eyes wide open. Recognize that property is collateral againsta loan, and if you don’t repay the loan, you can lose your home.When you can no longer live in your home, perhaps because you move to a nursinghome, or if you pass away, your house can be sold to cover the debt.Or your children can pay off the reverse mortgage loan.It’s your choice.Good Investing The Dynamic Wealth Report Team.Brought to you by: DynamicWealthReport.com
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For A Reverse Mortgage You can apply for a reverse mortgage if you are 62 years old, and either own your home outright, or if your outstanding current mortgage balance is low enough to be paid off with the loan
