Can the New Reverse Mortgage
Help You Live Better?
Whether you have a mortgage or your home is paid off, the new reverse can help you utilize the equity in your home to generate the cash flow you need...
What is the New Reverse Mortgage?
Since 2017, significant changes have been made to reverse mortgages, specifically to the Home Equity Conversion Mortgage (HECM) program, which is insured by the Federal Housing Administration (FHA). These changes were implemented to ensure the reverse program's financial stability and to protect borrowers and taxpayers from potential market fluctuations and the risk of default.
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New Regulations that Protect Equity
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Lender origination was capped at $6,000
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Annual mortgage insurance was lowered by 60%
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Interest rates were significantly lowered
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The amount seniors can borrow was reduced
Note: This is why 90% of borrowers have positive equity to pass to their heirs…and most of them have more equity than when they initially took out the reverse mortgage.
Reverse Products
The most popular product in the new reverse portfolio is the HECM Line of Credit, a financial product available to homeowners aged 62 and older. This flexible product converts a part of your home equity into funds that can be used to pay off your mortgage loan, update your home, take a vacation, or pay for medical care.
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In addition to the HECM line of credit option, we also offer other reverse products that address the unique financial needs of our senior homeowners.
Did you know?
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A wide majority (83%) of seniors who received a reverse mortgage said they were “satisfied” or “very satisfied” with their decision, according to a 2017 survey conducted by researchers from Ohio State University and funded by the MacArthur Foundation and the Department of Housing and Urban Development (HUD).
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Reverse Mythbusters
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MYTH #1: The bank or government will take my home.
That is just plain false. With a reverse mortgage, you or your estate continue to retain control of your home's title.
MYTH #2: I'll have nothing left to leave my kids.
Very unlikely. Based on historical data, it is safe to assume that the value of the property will appreciate over your lifetime. Although interest will accrue on the outstanding loan amount, you will likely have a significant amount of equity to leave to your kids.
MYTH #3: My heirs will be responsible for repaying the loan.
False. A reverse mortgage is a type of loan called "non-recourse." If the loan balance exceeds the home value, the heirs are protected because the lender can only get repaid from the proceeds of the home sale.
MYTH #4: I won't be able to sell my home.
False. A reverse mortgage is like any other loan. If you sell your home, the reverse mortgage will be paid off at closing, and the remaining equity will be yours. There are no prepayment penalties for paying off or selling the home in advance.
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How It Works:
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The bank will determine how much of a reverse mortgage you can qualify for based on your age and the amount of equity in your home. Depending on your situation, it can be used to pay off your current mortgage(s), earn a monthly income stream, or simply have access to additional funds as needed.
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Either you or your spouse must be 62+ years or older
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You must live on the property
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You must meet the minimum equity and income requirements as determined by the lender
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Who Can Qualify?
Find Out What People Are Saying:
I’ve worked with the Live Better team many times over the past 5 years, and they changed my perspective on reverse mortgages. They take the time necessary to ensure a reverse mortgage is the right fit for my clients and then walk them through the process step-by-step. The Live Better Financial team has always shown the utmost respect and patience with my clients and makes the process as seamless as possible. If you want a reverse mortgage, I highly recommend working with Scott Roseveare and the Live Better team.
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Anthony Wright, CFP ®, EA
Twin Rivers Wealth Management, LLC
A California Registered Investment Adviser CRD# 305773
We Love Helping Seniors Live Better!
Knowing whom to trust can be one of the most challenging aspects of considering a reverse. Our goal is to educate you and your adult children on the fundamentals and find out together if one of the reverse products would be a good fit for your unique situation.
Schedule a free consultation today to find out if you can achieve the freedom to feel financially secure and live better!
