Friday, July 21, 2017

Reverse Mortgages: Special Info for Trusted Advisors

A note to trusted advisors

A reverse mortgage is not for everyone. Our goal is to work with trusted financial and legal advisors to help determine if a reverse mortgage meets the needs of your client. We can accomplish this by providing detailed loan scenarios to you (with your client's permission) and personal consultation with our staff to help reach a decision that is in the best interest of all parties. We are up front with all our clients about the advantages and disadvantages of a reverse mortgage. Download PDF info packet (includes flyers and request for quote to fax in)

Advantages
Reverse mortgages provide many advantages for the senior borrower. Here is a short list of just a few:

  • Proceeds received from a reverse mortgage typically do not affect Social Security or Medicare.
  • Provides access to their home equity without the requirement of monthly mortgage payments. Borrowers must continue to meet ongoing property obligations such as homeowner's insurance and property tax payments.
  • Could allow senior to purchase a new home with no monthly principal and interest mortgage payments Could provide source of cash flow while borrower allows their investments to recover from market losses.
  • Improves a senior's standard of living or allows them to live out their dreams.
  • Pays off existing mortgage, in many cases freeing up thousands in monthly payments or preventing foreclosure. No more required principal and interest mortgage payments. Borrowers are required to continue making payments for homeowner's insurance and property tax charges and obligations.
  • Allows the senior to maintain their independence while living in their own home.
  • Provides money for in-home health care or medical expenses.

Disadvantages

  • Spends part of the equity that would be passed on to the estate or children.
  • Increasing loan balance, decreased equity over time.
  • May affect eligibility for needs-based programs such as Medicaid.
  • For those itemizing tax deductions, a reverse mortgage can eliminate the deduction for home interest if no interest is paid out of pocket. However if the homeowner pays the upfront fees and the accruing interest, the homeowner deduction may be available to them in the year the interest is paid.
  • Closing costs and insurance are expensive which means the borrowers should plan on living in the home for several years to reduce overall costs.

A Potential Reverse Mortgage Borrower
There is no stereotypical reverse mortgage client. There are some considerations for those who may benefit from this unique loan:

  • Substantial home equity and has a limited or fixed income.
  • Wants to maintain or improve lifestyle.
  • Prefers to access mortgage loan proceeds instead of other accounts or sources which may be taxable.
  • Wants to remain in home and age in place utilizing a reverse mortgage.
  • The loan is insured by FHA
Go Ahead, leave your contact information here. Your information is safe with us and will not be sold or distributed. The knowledgeable staff of Harlequin Capital Corp will be the only advocates providing you with your requested information
First Name:
Last Name:
Property Address:
City:
State:
Email Address:
Phone:
Home value (best guess):
Mortgage balance 1st:
Mortgage balance 2nd:
Mortgage balance 3rd:

INTERESTS

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