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7/27/2017

Reverse Mortgage

Our aging population reaches retirement without the money  to meet their needs for monthly food, utilities and expenses. 
It's really not home sweet home if Mother or Grandmother can't afford good food, utilities or
things they need.

Tapping home equity via a HECM is a  solution to provide a sense of confidence and freedom to retirees.

Let's talk about using HECM to convert equity into liquid reserves,  if your family or someone you know is needing life-style improvement. 

Six  trillion dollars in equity available for Seniors.
Still many worry about getting a reverse mortgage


Do you have to tell everyone about your reverse mortgage?
No only those who live with you need to know. There are benefits to sharing this information with family members. Potential heirs will want to know how this affects  




Here are 5 reasons why you might want to tell your loved ones about getting a reverse mortgage:

1. Alleviate Any Concern You Might Be Reducing Their Inheritance
Some reverse mortgage borrowers are reluctant about heirs learning about reducing whatever home equity they could otherwise pass on as an inheritance.

However, research indicates that heirs not only do not care about receiving an inheritance, but they are also ready and willing to sacrifice their own finances to care for aging parents. A study found that 75 percent of adults with living parents were willing to sacrifice their own finances to help their parents.

And, research from HSBC found that Americans lean more toward spending all their money, with 23% saying they are inclined to do this, and only 9% believing it is better to save as much as possible to pass on to their hers. The remaining 68% say that they would like to spend some and hopefully pass on some too - which is indeed possible with a reverse mortgage.

Had parents taken a HELOC rather than a Reverse Mortgage, it too would be an obligation requiring payback and reducing equity to heirs.

By discussing your decision with potential heirs, you can learn about their concerns and you will likely find out that they support your decision to have taken a reverse mortgage and want you to be as financially comfortable as possible in retirement.

Do you have a Family Trust?  If not, look into it now!

2. No Misinformation About Heirs' Obligations
A reverse mortgage allows homeowners who are 62 or older to borrow their home equity. The loan accrues interest and is paid back when the borrower dies or moves out of the home. This means that the borrower's heirs will probably inherit less.

They still inherit the home, but must repay the reverse mortgage - usually by selling the property.

However, there is a lot of misinformation and misunderstandings about heir’s obligations. Many reverse mortgage borrowers and their heirs think that the house is completely lost or that it is going to be a burden to have to repay the loan.

However, heirs have options:

Keep Home: If the heirs wish to keep the home, they can pay off the reverse mortgage loan with their own money or a refinance.

Sell Home: More commonly, heirs opt to sell the home to pay off the loan.
Sometimes after the sale, there is money left over for the heirs to get an inheritance.
Other times, what is owed on the loan is actually more than the value of the home. However, since reverse mortgages are "non-recourse" loans, heirs will never be required to pay more than 95% of the home's appraised value-even if the loan balance grows to exceed the value of the home.
This link will take you to the details about Settling the Loan Account http://www.reversemortgage.org/Your-Roadmap/9-Settling-the-Loan-Account

3. Opportunity to Communicate What is Important to You
If you need or want money from a reverse mortgage now, but are concerned about taking away an inheritance, talk to your children about the pros and cons of the loan in light of your personal priorities. A professional Reverse Mortgage Loan Originator welcomes the opportunity to meet with adult children and other interested parties.

You can communicate what is important to you and why you want the money now. You can also express your concerns. If you have at least a fairly good relationship with your heirs, then it is likely to be a positive and supportive conversation.

4. Heirs Can Better Plan their Own Financial Future
By talking with your heirs about your decision to get a reverse mortgage, you give them the chance to better plan their own financial futures.

5. Insures a Smoother Estate Process
You can help your heirs by educating them about what happens to the reverse mortgage loan after your demise.

Ownership of the property passes to them and they will have all net equity. They can refinance the home and keep it, or sell it. They have all the options.


Do you have a Family Trust?  If not, look into it now!

It is important that they know that they must notify the servicer (lender) within 30 days of the homeowner's death of their intentions - what they plan to do with the home.

This early notification preserves the heir's options gives them up to 12 months to settle. If they don't notify the servicer, then the lender can act on their own.

Is a Reverse Mortgage Right for You?
Studies indicate that more than 90 percent of all households who have secured a Reverse Mortgage are extremely happy that they got the loan. People say that they have less stress and feel freer to live the life they want.

Instantly estimate your Reverse Mortgage loan amount or, assess your suitability for these loans. You also get personalized commentary on various aspects of the loan and how they will impact your retirement. 



I can help! C G Barbeau (949) 784-9699
NMLS #324982


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Our aging population increasingly reaches retirement with  limited reserves to meet their needs for their later years. Relax in your home sweet home without worry.

Tapping home equity via a HECM is one of the best solutions to provide a sense of confidence and freedom to retirees.

Home equity among the elderly rose to $6.3 trillion in the first quarter of 2017 from $6.13 trillion in Q4 of 2016, according to data from the National Reverse Mortgage Lenders Association.

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