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Understanding Reverse Mortgages
Please contact Bob Lane, Mortgage Banker, for more information on Reverse Mortgages and for a custom quote to see how you specifically might benefit from a Reverse Mortgage.
Bob Lane (314) 372-4358 direct or via e-mail at blane@paramountmortgage.com
Introduction to Reverse Mortgages
Paramount has helped many senior clients around the St. Louis area through Reverse Mortgages so we understand what it’s like for older homeowners today. Our goal is to help potential candidates for a Reverse Mortgage understand the program so they can decide if this is a smart financial tool for their individual needs.
There is a lot of information available on Reverse Mortgages and, unfortunately, not all companies that deal with them understand the details. Our Reverse Mortgage team goes through extensive and ongoing training. We are members of NRMLA (National Reverse Mortgage Lenders Association) and Bob Lane has helped train lenders from other companies on marketing Reverse Mortgages. We are actively involved in the industry including Bob Lane’s involvement with a task force to help seniors live in their homes as long as they wish with the resources they have.
The most often asked questions are:
Can the bank take my home? NO! You the homeowner ALWAYS keep the title to your home along with any untapped equity. At the time when your loan is repaid (after your passing or when you move out permanently) any remaining equity belongs to you or your heirs.
Could the payments stop coming? If you have selected a monthly payment for life you are guaranteed to receive that payment each month for as long as you live. Yes, if you live to be 115 years old, and remain in your home, you will still get that monthly payment. Any payment option you select is guaranteed by HUD to be paid to you. Reverse Mortgages are non-recourse loans, meaning you can never owe more than your house is worth.
Is there anyone I can talk with to make sure I’m doing the right thing? Speaking with a HUD-approved reverse mortgage counselor is a required step for each applicant. The counseling is FREE to the applicant and is scheduled at your convenience. The role of the counselor is to ensure the homeowner(s) fully understand their Reverse Mortgage. We are proponents of this counseling because it protects seniors from other lenders who may not fully explain the mortgage and protects against predatory lenders.
How much money can I get? A simple calculation will provide the answer. Just call Bob Lane for the answer at 314.372.4358.
For Bob to calculate how much you could receive from a Reverse Mortgage, this is the only information he needs:
Date(s)-of-Birth
Value of home
Amount Owed, if any
Zip Code
How you would like to use the money (ie. Monthly income, line of credit, and/or lump sum)
Paramount Mortgage - Client Testimonials
Here are the stories from a few of our Reverse Mortgage clients.
"I retired in 1988. I thought my income from Social Security and two small pensions would have been adequate. After 10 years of retirement my income couldn’t keep up with inflation and taxes. My monthly outlay for bills exceeded what was coming in. We talked about going into a retirement home but after 61 years of marriage my wife said she couldn’t spend the rest of time with me in one small room. We were considering other options and the invitation to the Reverse Mortgage luncheon came. I figured I got nothing to lose. Bob Lane answered all of my questions before I had a chance to ask them. My wife and I talked about it for a week afterward and then we called Bob. Now I am much more comfortable -- not worried about our future. I was very happy with the way [the loan process] went. The HUD counselor was impressed with how informed we were. She said ‘Even people in Ladue are getting Reverse Mortgages to make ends meet. Some of them were in the same boat we’re in!’ I wish more people knew about Reverse Mortgages because it can make a big difference in the way they live."
- Ollie, South St. Louis County
"I came to a point where I was running out of money. I needed to fix up my home and care for my ill wife. I used our savings trying to fix our home but it wasn’t enough so I took out a loan. I felt desperate and I didn’t know what to do. I asked a friend and he said something about a Reverse Mortgage. I called HUD to find out if these were for real and then I got Bob Lane on the phone. After I met with the counselor and checked everything out I thought ‘we’re in business!’ I took a lump sum to finish the repairs to my home, pay off the bank loan and replenish my reserves. Now I get a check each month to cover bills too. I really believe in this Reverse Mortgage because it lets me keep my house!"
"There are a lot of people like me who don’t want to give up their house after working so hard to pay it off. I can live in my house forever now. Before I didn’t know where I was going to turn. I’m in pretty good shape, now. More people need to know about this. They need to know their options."
- John, South St. Louis City
Uses of Reverse Mortgage Proceeds
v Pay off existing mortgage.
v Pay off existing credit card debt.
v Pay for medical expenses/prescriptions.
v Pay for in-home nurse. Avoid possible need for nursing home.
v Pay for home repairs, modifications and/or improvements.
v Create cash Emergency Fund.
v Reduces overall potential estate tax liability.
v Reduces income taxes with charitable contributions.
v Leverage into larger asset using life insurance.
v Portion could be used to fund Long Term Care insurance.
v Create annual gifting program.
v Create annual Generation-Skipping gift program.
v Down payment on vacation home.
v Down payment on investment property.
v Family vacation(s).
v No restrictions whatsoever.
Benefits of a Reverse Mortgage
v Use of proceeds not restricted.
v No income or credit qualifications.
v No monthly mortgage payment.
v No repayment of loan as long as you live in the home.
v Cannot owe more than house is worth- no additional debt left to heirs.
v Borrower retains title to property.
v Benefits received are income tax-free.
v Benefits can be a monthly income stream for life, an income stream for a specified period of time, as a line of credit or taken in one lump sum or any combination of the above.
v Can change how you take benefits as often as you like.
v Benefits do not affect Social Security or Medicare eligibility.
v Usually no out-of-pocket expenses. Closing costs, mortgage insurance and origination fees are financed by the loan.
v No re-payment penalties.
Conditions for a Reverse Mortgage
Qualifications
v Everyone on title must be age 62 or older.
v Must be primary residence.
v Can be 1-4 family residence.
v Most condos are approved.
v Existing mortgage(s) will be paid in full with proceeds.
v Mandatory free Counseling.
Proceeds based on:
v Age of borrower(s).
v Appraised value of primary residence.
v Interest rates.
Triggers for repayment:
v Death.
v Sale of home.
v Move our permanently.
Amount repaid:
v Principal.
v Service Fees.
v Accrued interest.
Borrower responsible for:
v Home Upkeep.
v Real Estate taxes.
v Homeowner’s insurance.
Informative Websites and Information
NRMLA (National Reverse Mortgage Lenders Association)
www.reversemortgage.org <http://www.reversemortgage.org>
HUD (U.S. Department of Housing and Urban Development)
www.hud.gov/groups/seniors.cfm <http://www.hud.gov/groups/seniors.cfm>
Fannie Mae
www.efanniemae.com <http://www.efanniemae.com>
Contact Your Reverse Mortgage Specialist:
Bob Lane
Direct: 314-372-4358
1-800-735-5957
blane@paramountmortgage.com
HUD-Approved Missouri Housing Counseling Agencies
Offering Reverse Mortgage Counseling:
American Association of Retired Persons (AARP): 1-800-209-8085
National
National Foundation of Credit Counselors (NFCC): 1-866-698-6322
National
Money Management International (MMI): 1-877-908-2227
National
Housing Options Provided for the Elderly (HOPE): 314-776-0155
Local
ACORN: 314-531-6204
Local
Please inform the counseling agency you are a Paramount Mortgage client needing HECM counseling as soon as possible. Please call Bob at Paramount to let him know when you have the counseling appointment scheduled.
For borrowers facing foreclosure or other similar emergencies needing immediate counseling, please call 202-434-6051.
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