Advantages of a Reverse Mortgage in San Antonio, Texas

Advantages of a Reverse Mortgage
By Dennis Estrada

Using reverse mortgage, any sixty-two years old or over can convert the home equity into cash. The mortgage lenders give the cash by lump sum payment, several payments, credit line, or combination. Here are the common advantages of reverse mortgage.

Read more HERE.

The History of Reverse Mortgages and Why They Are So Popular Today in San Antonio, Texas

Reverse mortgages have been around since 1961. The first person to receive a reverse mortgage was Nellie Young through the Deering Savings and Loan Bank of Maine. At that time, the reverse mortgage was issued through the bank itself and any bank could choose whether or not they would do a reverse mortgage. Not a lot of people took advantage of reverse mortgages because there was nothing to guarantee that a bank wouldn’t take advantage of them. Banks also found some risk in doing reverse mortgages because there was nothing to guarantee that the borrowers fully understood what they were doing when taking out this reverse mortgage. The whole system still had a few issues to be worked out.

In 1988 the federal government stepped in and worked out a new law with the AARP to help increase the use of reverse mortgages under government supervision. The law was the Federal Housing Authority Insurance Program where 50 different lenders were chosen across the country to participate in giving out reverse mortgages. It wasn’t until 1989 that the first government supervised reverse mortgage was given out.

As people learned about reverse mortgages, they became more popular. In 1998 the pilot program became an official program that all lenders could participate in. The reason reverse mortgages became so popular is because they allow senior citizens who own a home and have retired to access the equity of their home without any real risks to them. When they are no longer living in the home for whatever reason, the house is then either sold or the family can choose to refinance the mortgage. If the house doesn’t sell for the amount that the reverse mortgage was for, there is no obligation to pay back the difference.

The way that an elder receives their money is completely up to them. They can get a line of credit where they can use the money from the bank as needed. This method will give them the most amount of money for their home. They can also take out the reverse mortgage as a lump sum, although the interest fees they will have to pay on it will be higher than the other options. The most common method of receiving payment from a reverse mortgage is to get a monthly payment. This payment will continue for as long as the person is alive, no matter how long they live or what the amount of the loan was.

There are a few stipulations to receiving a reverse mortgage, although for most people they aren’t a problem. The minimum age a person must be to get a reverse mortgage on their home is 62. They also must not have a current mortgage on the house or they will have to use a portion of their reverse mortgage to pay off the first mortgage. They will also have to go to financial counseling to assure the lender that they are fully aware of what the terms of the loan are and that they can meet their financial responsibility.

Saving Seniors Homes from Foreclosure in San Antonio, Texas Using a Reverse Mortgage

With the economy in the state it’s in today, more and more people are being faced with the possibility of foreclosure. Many people are finding their mortgage payments harder to make each month, and this is especially true for seniors. Many seniors rely on their retirement funds or Social Security benefits to help pay their mortgages, and those accounts sometimes just aren’t enough to keep up. There’s nothing more disheartening than having a home that you’ve worked for years to pay off pulled out from under you.

Fortunately, there are several ways to fend off foreclosure on a home. One of these options that is specific to seniors is a reverse mortgage. It may sound like it wouldn’t be much help since “mortgage” is right in the name and that’s what you’re trying to get rid of – but it really may be the answer to your foreclosure problem.

Reverse mortgages are only available for people of age 62 or higher. A reverse mortgage is somewhat like a home equity loan in that you’re taking out money against your home’s equity. That might not sound terribly useful to someone who still owes money on their home, but a reverse mortgage can actually be taken out on a home that is still being mortgaged. In most cases, a reverse mortgage provides enough of a loan to pay off a primary mortgage and still have money left over.

It is important to note that you can only use a reverse mortgage in this way if the loan will provide enough money to pay off the primary mortgage. In other words, the reverse mortgage has to be the primary lien. Fortunately, unless the home has seen a drastic drop in value or you’ve just taken out a mortgage, this is not a difficult condition to meet. In most cases, you’ll even have access to some extra money that you can put toward home renovations or just save for an emergency.

A reverse mortgage does not come due until the borrower moves out of their home, sells it, or passes away. If the home is sold, the proceeds from the sale are applied against the reverse mortgage. One thing that’s nice is that if proceeds from the sale aren’t enough, then there’s no personal liability for the borrower or their heirs. If the loan ends because the borrower passed, the heirs also have the opportunity to refinance the home.

Reverse mortgages can provide a powerful solution to your foreclosure woes. Now that you have the basic idea, be sure to do some research so that you fully understand the these loans.

How Seniors Use Reverse Mortgages to Increase Cash Flow or to Pay Off an Existing Mortgage in San Antonio, TX

Money is tight for most people with the way that the economy is today, and this can be especially true for seniors. Social security doesn’t tend to be enough to get by and when there are so many bills to pay for such as medical bills and a family to provide for, there isn’t any money left over to enjoy retirement. Things can be especially tough when there is still a mortgage to pay because the interest rates and monthly payments just seem to get higher and higher. Fortunately there is a way for seniors to increase the amount of money they receive monthly and even pay off their mortgage without having to leave behind large debts for their children.

Reverse mortgages have been around since the 1980’s and have come a long way since the first one. They are now supervised by the government and there are laws that lenders and borrowers have to follow in order to complete the reverse mortgage transaction. The way that a reverse mortgage works is different than any other kind of loan because instead of needing money to purchase an item, the person has an item and needs money. In this case, the item would be the home that a person lives in.

A person must be over the age of 62 to qualify for a reverse mortgage. The older the borrower is, the more money they will get from their reverse mortgage.

Some home may not qualify for the reverse mortgage, and other types of homes such as mobile homes have to meet certain restrictions in order to be considered. Any borrower who chooses to get a reverse mortgage must go through counseling to be sure that they understand the loan and that they can afford the fees that go along with it.

Once a senior has been approved for the loan, they can do whatever they want with their money. The most common option is receiving their cash flow in monthly payments that will continue for as long as the borrower is alive, no matter how long they live. Since the borrower is taking out money against the house, when they no longer are no longer in the home, the estate will sell the home to repay the loan, or the family can choose to refinance. If the sale of the house doesn’t make enough money to cover the loan, the borrower doesn’t have to make up the difference, because all reverse mortgages are insured by the federal government.

Saving Seniors from Bankruptcy Using a Reverse Mortgage in San Antonio, Texas

It seems you can’t turn on the television or surf the Internet without hearing about how bad the economy is. A lot of people don’t have to hear about it because they’re experiencing it every day. No one is hit harder by the economic downturn than seniors. Their retirement accounts and social security benefits are dwindling and it seems like there’s no hope in sight. Many unfortunate seniors are being faced with the possibilities of foreclosure and even bankruptcy. Retirement is supposed to be a time to enjoy life, not stress about money!

The good news is that there are ways for seniors to dig themselves out of their immediate debts and avoid declaring bankruptcy. One of these methods is known as a reverse mortgage. While “mortgage” usually implies having to pay something, a reverse mortgage is just the opposite. Essentially, it is a loan taken out against the equity on your home, though it’s slightly different from a standard home equity loan.

Reverse mortgages are available specifically to seniors – anyone of age 62 or more who owns a house or at least most of one. Even if you’re still paying off a mortgage on a home, a reverse mortgage is an option. If you have full ownership of your home then you’re entitled to more money than if you are still paying off a home, but either way you can get a nice windfall to help stave off bankruptcy.

You can choose the size of your reverse mortgage, though it is somewhat limited by your exact age, and is of course based on the value of your home. However, the proceeds gained from a reverse mortgage can be used on absolutely anything. You can pay off all of your outstanding bills and probably still have some money left over to save for future expenses or just to do something fun.

Reverse mortgages are relatively worry free. They do not need to be paid back until you either sell your home or pass away. If you sell your home, then the proceeds from the sale will go toward paying off the principal (note that interest is accrued and not paid until the loan ends). If the proceeds from the sale can’t cover the loans total amount, then the institution that issued the reverse mortgage simply soaks up the difference. If the proceeds exceed the cost of the loan, then any additional money is yours.

In the event that the loan ends due to your passing, then it is up to your heirs to decide what to do. They can choose to refinance the home if they want to keep it, or they can simply sell it. If they sell it, then the same rules apply – they have no personal responsibility, and if there is extra money after the sale it is theirs.

Reverse mortgages can be a useful tool in avoiding bankruptcy. However, the details are fairly complicated so it’s important to understand all you can about them. In every case, you need to take a counseling course that will explain all the finer points of reverse mortgages so you’ll know exactly what you’re doing.

Reverse Mortgages Provide Opportunities for San Antonio, TX Seniors

Here is a great article for anyone who has questions about a reverse mortgage. Visit me at www.texasreverse.net if you need help with a reverse mortgage in the San Antonio TX area.

Reverse mortgages shouldn’t be lumped into ‘bad’ category

“Comparing every loan’s shortcoming – real or perceived – to a “subprime” product needs to stop.”

Continue reading HERE.

Reverse Mortgages: Frequently Asked Questions in San Antonio, Texas

Part Two of Two

How is interest calculated on a reverse mortgage?

Interest on a reverse mortgage is calculated based on the money paid out to you. In general, reverse mortgages have variable rates, though fixed rate reverse mortgages are becoming more popular. Variable rate reverse mortgages are based on certain indexes. Interest is not covered by the proceeds you get from a reverse mortgage – it builds up over the course of the entire loan until it’s repaid.

Does a reverse mortgage affect tax liability?

Reverse mortgages are not counted as standard income, but they may still be partially taxable. The IRS sometimes provide tax breaks for interest paid toward loans, but no interest is paid on reverse mortgages until the loan ends. Thus, this is not a concern until then. The insurance premium that is required to take out a reverse mortgage can be deducted from your taxes for that year.

How do reverse mortgages work with existing mortgages?

Reverse mortgages must be the primary liens on a property, which means that all other debts must be paid off when the loan is taken out. You can use the proceeds from the reverse mortgage to pay off your regular mortgage or other debts so that the reverse mortgage becomes the primary lien. This frees you from making monthly payments which can make it easier to make ends meet.

How do reverse mortgages interact with government assistance programs?

Some people worry that taking out a reverse mortgage will disqualify them from getting social security or other benefits from the government, but this is not the case. The only benefit that may be affected is Medicaid, which is based on how much money you have available. If you spend the money from a reverse mortgage immediately, it will have no effect. If you keep some money, however, it counts as an asset and may disqualify you from Medicaid.

Where can I learn more about reverse mortgages?

There are counseling sessions that are required in order to take out certain types of reverse mortgages. These counseling sessions are designed to ensure that you fully understand the responsibilities and repercussions of taking out this sort of loan. At the end of the session, you’ll be given a certificate that confirms you understand how reverse mortgages work.

Visit me at www.texasreverse.net if you need help with a reverse mortgage in the San Antonio TX area.

Reverse Mortgages: Frequently Asked Questions in San Antonio, Texas

Part One of Two

What is a reverse mortgage?

A reverse mortgage is a special type of mortgage that’s only available to people ages 62 and older. In a normal mortgage, a bank or other financial institution provides a loan to help a person or family buy a home, and the borrower pays back money each month. With a reverse mortgage, money is taken out against a home and paid to the borrower in one lump sum or in monthly payments.

How is a reverse mortgage paid back?

All payments on a reverse mortgage are deferred until the borrower dies, leaves their home or sells their home. Then, many different things can happen. If the home is sold, then the proceeds from the sale can be applied against the reverse mortgage. If the proceeds aren’t enough to cover the cost of the loan, then the lending institution pays the rest. If the proceeds exceed the amount of loan, then the extra moneys goes to the borrower. In the case of the borrower’s death, the borrower’s heirs can either refinance the house or sell it under the same conditions outlined above.

What can the money from a reverse mortgage be used for?

Money from a reverse mortgage can be used for anything at all. Most often, people take out reverse mortgages to supplement a dwindling retirement account. However, one might also take out a reverse mortgage to pursue a lifelong dream or spend some time traveling before settling down for good. Reverse mortgage funds might also be used for home repairs or even to prevent a bank from foreclosing on a home.

How do I qualify for a reverse mortgage?

Most standard types of homes qualify for reverse mortgages. Single family homes, properties with 2-4 units, condos, townhomes, and manufactured homes can all work for reverse mortgages. In some cases, you may even be able to take out a reverse mortgage on a home that still has a traditional mortgage. There are no special requirements for borrowers in terms of medical health or personal income.

How much money can you get from a reverse mortgage?

The amount of money that can be received from a reverse mortgage is dependent on the age of the homeowners, the value of the home, and the current interest rates. The general rule is that the more one’s home is worth and the older they are, the more money they can get. The money can be paid in any number of ways, including monthly payments, a single lump sum, and a flexible line of credit.

Retiring in San Antonio, Texas? Use a Reverse Mortgage to Pay off Your Current Home Loan.

Here's a great article I found in the Wall Street Journal that talks about paying off your current mortgage at retirement age.

In many cases we have seniors here in San Antonio, Texas who are using Reverse Mortgages to pay off current loans.

If you would like more information on how to pay off your current mortgage at retirement age be sure to visit our website at www.texasreverse.net.

Read the Wall Street Journal Article: "Retiring? Pay Off Your Mortgage" at:

http://online.wsj.com/article/SB125037442701934561.html

Free Reverse Mortgage Counseling in San Antonio, Texas Offered by Money Management International

Money Management International (MMI) announced that as of July 1st, 2009 it’s no longer charging clients for reverse mortgage counseling. According to a company statement, MMI believes it has sufficient grant funds to cover expenses until at least October 2009, at which time new HUD grant funds will become available.

MMI expects there will be large demand for HECM counseling, so it will limit capacity to about 3,500 sessions each month, but all seniors calling MMI to receive counseling by phone or in any of its branches will not be charged.

MMI is a national intermediary, so it should be listed on every counseling list given to a client. However, HUD does not permit lenders to steer to any particular agency, but having a no cost option for counseling is a great thing to have.

Money Management International (MMI) and its family of Consumer Credit Counseling Service (CCCS) agencies make up the largest nonprofit, full-service credit counseling agency in the US and provides counseling 24/7.

Contact me at www.texasreverse.net.

Who is Eligible for a Reverse Mortgage in San Antonio, Texas and When Does a Reverse Mortgage Need to Be Repaid?

AARP answers your questions:

The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the federal government. HECM loans are insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD).

The FHA tells HECM lenders how much they can lend you, based on your age and your home's value. The HECM program limits your loan costs, and the FHA guarantees that lenders will meet their obligations.

HECMs Versus Other Reverses

HECM loans generally provide the largest loan advances of any reverse mortgage. HECMs also give you the most choices in how the loan is paid to you, and you can use the money for any purpose.

Although they can be costly, HECMs are generally less expensive than privately-insured reverse mortgages. Other reverse mortgages may have smaller fees, but they generally have higher interest rates. On the whole, HECMs are likely to cost less in most cases. A notable exception may be the reverse mortgages now being developed by some credit unions.

The only reverse mortgages that always cost the least are ones offered by state or local governments. These loans typically must be used for one specific purpose only, for example, to repair your home, or pay your property taxes. They also generally are available only to homeowners with low to moderate incomes.

Who is Eligible

HECM loans are available in all 50 states, the District of Columbia, and Puerto Rico. To be eligible for a HECM loan:
• you, and any other current owners of your home, must be aged 62 or over, and live in your home as a principal residence;
• your home must be a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Some manufactured homes are eligible, but most mobile homes are not; cooperatives are expected to become eligible by the end of 2008.
• your home must meet HUD's minimum property standards, but you can use the HECM to pay for repairs that may be required; and
• you must discuss the program with a counselor from a HUD-approved counseling agency.

Repaying a HECM

As with most reverse mortgages, you must repay a HECM loan in full when the last surviving borrower dies or sells the home. It also may become due if:
• you allow the property to deteriorate, except for reasonable wear and tear, and you fail to correct the problem; or
• all borrowers permanently move to a new principal residence; or
• the last surviving borrower fails to live in the home for 12 months in a row because of physical or mental illness; or
• you fail to pay property taxes or hazard insurance, or violate any other borrower obligation.

Debt Limit

If your rising HECM loan balance ever grows to equal the value of your home, then your total debt is limited by the value of your home if the home is sold to repay the loan. But if the home is not sold and the loan is repaid with other funds, then you or your estate would owe the full loan balance–even if it is greater than your home’s value. Your heirs would not have any personal liability for repaying the loan.

Visit me at www.texasreverse.net if you have any questions, or need help with a reverse mortgage in the San Antonio TX area.

Smart Ways to Access Your Housing Wealth in San Antonio, Texas

I saw this article written by Phillip Moeller in The US News and World Report and thought you might want to take a look.

If you are considering a Reverse Mortgage in San Antonio TX, this is important information to have! Visit me at www.texasreverse.net with any questions.

Read article HERE.

Reverse Mortgages in San Antonio, Texas Keep Seniors in Their Homes Longer

Visit me at www.texasreverse.net if you need help with a reverse mortgage in the San Antonio, TX area.

The National Council on Aging Reminds Us: Reverse Mortgages can be used by over 13 million Americans to Remain Independent and in Their Homes Longer

WASHINGTON -- A study released by The National Council on the Aging (NCOA) shows that reverse mortgages can be used by over 13 million Americans to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer.

“The study shows that reverse mortgages have significant potential to help many seniors pay for help at home or to make home modifications. It also points to the need for strong consumer safeguards and lower transaction costs if these loans are to appeal to the millions of older Americans who could potentially benefit,” said NCOA president and CEO James Firman.

According to the study, there are some 9.8 million elder households (aged 62 and older) that are dealing with an impairment that can make it hard to live at home. In total, these households could access as much as $695 billion through reverse mortgages. For individuals, the extra cash could go a long way to help with family caregiving and other long-term care expenses. For example, a borrower aged 75 years old with a home worth $100,000 could receive a reverse mortgage loan that could pay them $500 a month for almost 12 years.

“This is an important study that, for the first time, shows that elderly homeowners, many with chronic conditions, can use reverse mortgages to pay for care at home,” said Jim Knickman, vice president for Research at the Robert Wood Johnson Foundation. “We hope that these findings will prompt new thinking into how the nation addresses the challenge of financing long-term care.”

Reverse mortgages are loans that allow homeowners aged 62 and over to convert home equity into cash while living at home for as long as they want. Borrowers continue to own their homes, and do not need to make any monthly payments. Instead, they can choose to receive the funds as a lump sum, line of credit, or as monthly payments (for up to life). The loan comes due only when the last borrower moves out, dies or sells the home.

The “Use Your Home to Stay at Home: Expanding the Use of Reverse Mortgages to Pay for Long Term Care” report, funded by the Centers for Medicare and Medicaid Services and the Robert Wood Johnson Foundation, also shows how reverse mortgages can alleviate financial pressure not only for individuals and families, but also for state Medicaid programs and the federal government. Increasing the market for reverse mortgages could save Medicaid $3.3 billion (with a four percent take up rate) annually by 2010.

"Many seniors and their families can benefit from effective ways to pay for the long term care services they need, in the setting they prefer," said Dr. Mark McClellan, administrator of the Centers for Medicare & Medicaid Services. "NCOA's report shows that reverse mortgages can provide real help in financing long term care needs."

However, there are several obstacles to their growth for this purpose. For example, the NCOA study shows that while two-thirds (67 percent) of older homeowners today have heard of a reverse mortgage, only 9 percent indicate that they are likely to use this financing option to pay for assistance at home. Many worry that they risk impoverishment, or won’t be able to leave a legacy to their children if they tap home equity. The cost of these loans, and current Medicaid policies on how reverse mortgages affect eligibility for long-term care benefits, also appear to be barriers.

“We need expanded public education, and additional work to explore how to reduce the cost of tapping home equity, to strengthen consumer protections, and promote innovation,” said Barbara Stucki, PhD, project manager for NCOA’s Use Your Home to Stay at Home project. “Overcoming these obstacles will mean that reverse mortgages can play an important role in helping many older Americans pay for the supportive services they need to continue to live at home safely and comfortably.”

According to Firman, NCOA will continue to play a leadership role in promoting the appropriate use of reverse mortgages to help pay for long term care at home.

Founded in 1950, The National Council on the Aging is a national network of organizations and individuals dedicated to improving the health and independence of older persons; and increasing their continuing contributions to communities, society, and future generations.; For more information on NCOA, visit www.ncoa.org.

A PowerPoint presentation further explains findings from the report.

The report is also available online.

Background

Reverse Mortgages for Long-Term Care
“Use Your Home to Stay at Home”™

Started in September 2003 by The National Council on the Aging (NCOA), the “Use Your Home to Stay at Home” project has developed a national blueprint for encouraging the use of reverse mortgages to help older Americans pay for long-term care services at home. Reverse mortgages are a special type of loan that allows people age 62 and older to convert equity in their home into cash while they continue to live at home for as long as they want.

Long-Term Care Costs and Home Equity

Currently, the costs of long-term care are primarily paid out of pocket by consumers or by Medicaid, the federal/state program designed to pay costs of health care for low-income individuals. In 2000, our nation spent $135 billion a year on long-term care for those age 65 and older, with the amount likely to double in next 30 years. Most of those dollars pay for care in skilled nursing facilities.

Recent studies show that older Americans, including those who have serious health problems and need long-term care, want to live at home rather than in an institution. Most elders (82 percent of those age 62 and older) own their homes and 74 percent of those own them free and clear. With over $2 trillion tied up in home equity, this financial resource has the potential to dramatically increase the ability of seniors to pay for long-term care at home. Reverse mortgages can free up needed cash while enabling seniors to continue to own their home.

Of the nearly 28 million American households age 62 and older, NCOA has found that almost half (48 percent), or about 13.2 million, are good candidates for a reverse mortgage. The amount that these older households could receive from a reverse mortgage is substantial – on average $72,128. These funds can go a long way to pay for help at home and for retrofitting the home to make it safer and more comfortable. For some, they could be used to purchase long-term care insurance if they qualify. In total, an estimated $953 billion could be available from reverse mortgages for immediate long-term care needs and to promote aging in place.

For many older families, home equity is their single, biggest financial asset. Unlocking these substantial resources can help empower “house rich, cash poor” seniors by giving them additional resources to purchase the services they feel best suit their needs. The use of private funds from reverse mortgages can also strengthen community long-term care programs and reduce the burden on state Medicaid budgets.

Funders

The “Use Your Home to Stay at Home”™ project is funded by the Centers for Medicare and Medicaid Services, the federal agency that operates Medicare and Medicaid, and the Robert Wood Johnson Foundation.

Program Management

James P. Firman, Ed. D., NCOA president and CEO
Jay Greenberg, Sc.D, executive vice president
Barbara Stucki, Ph.D., project manager

Headquarters

The National Council on the Aging
300 D Street SW Suite 801
Washington, DC 20024
(202) 479-1200
(202) 479-0735

About NCOA

Founded in 1950, The National Council on the Aging is a national voluntary network of organizations and individuals dedicated to improving the health and independence of older persons; increasing their continuing contributions to communities, society, and future generations. NCOA is a national voice and powerful advocate for public policies, societal attitudes, and business practices that promote vital aging. NCOA is an innovator, developing new knowledge, testing creative ideas, and translating research into effective programs and services that help community service organizations serve seniors in hundreds of communities. And, NCOA is an activator, turning creative ideas into programs and services that help community services organizations serve seniors in hundreds of communities. For more information on NCOA, visit www.ncoa.org.

Reverse Mortgages Help Seniors Buy Homes and Save Cash in San Antonio, Texas

Reverse mortgages have traditionally been used by seniors to tap equity in their homes. Seniors, age 62 or older, may want to consider a Reverse Mortgage if they want:

1. To preserve their cash

2. No monthly payment

3. To qualify for a loan without any income verification

4. To get a loan despite bad credit

To preserve cash, a senior may want to secure a reverse mortgage instead of paying off their new home with the cash proceeds from the sale of their previous home. The amount seniors can borrow depends on their age(s) and the appraised value of the home being purchased.

Reverse mortgages have no monthly payments-ever. In fact, the homeowner may receive a monthly payment from the home’s equity. The net equity in the home is pledged to repay the HECM when the home is sold after the owner passes away. However, an extended absence for medical treatments or assisted living stay could trigger a forced sale of the home (12 months or longer).

Since the home’s equity will be used to repay the loan, there is no requirement the borrower provide proof of income. In the event the senior is receiving monthly payments from their homes equity, the size of the payments is determined by the projected life span of the borrower(s) and equity available as security. Bad credit is not an obstacle either because the eventual sale of the property, not the senior’s creditworthiness, is how the lender expects to recover their loan disbursements.

The senior can also receive a lump sum of cash to help pay for the home purchase and not receive any monthly payments. Again, the loans are set up so the senior can reside in the home for the remainder of their life. These loans are insured by FHA. Prospective borrowers will be thoroughly counseled on the ins and outs of this unusual loan.

Here’s a few other details:

• Property must be owner occupied primary residence of borrower
• Mortgage insurance premium (MIP) required
• No seller concessions or credits
• Buyer must pay normal closing costs and seller must pay for all repairs
• No gift funds allowed to borrower
• Loan limit is $625,000 through 2009

Most importantly, use a local lender. Contact me at www.texasreverse.net if you have any questions.

A Reverse Mortgage has Many Benefits in San Antonio, Texas

Here are just a few:

¨ Stay in Your Home for Life

¨ Supplement Your Income

¨ Pay off your mortgage or other liens against your property

¨ Make necessary repairs or improvements to your home

¨ Pay For Long-Term Health Insurance

¨ Purchase pre-paid funeral plans

¨ Hire In-Home Health Care

¨ Use Income for Debt Repayment

¨ Help your children or a family member

¨ Go on a dream vacation

¨ Buy a new car

The great reasons why a reverse mortgage is right for you!

¨ The Income Received is Tax Free

¨ There are No Income Qualifications

¨ There are No Monthly Payments

¨ Title remains in Your Name

¨ The loan is not due and payable until you Permanently leave the home

• For more information or a free consultation, contact Melinda Hipp, Reverse Mortgage Specialist, at Legacy Mutual Mortgage. (210) 492-4900 or toll free at 877-492-4900 or e-mail at melinda@legacymutual.com Visit her website at www.texasreverse.net

Special Report: How to unlock the Retirement Funds hidden in your San Antonio, Texas Home

- Consider a Reverse Mortgage!!!

SOME FACTS ON THE “NEW RETIREMENT”:

§ Retirements are getting longer and people are outliving planned retirement savings. People are living on average 4 months longer every year.

§ Retirement expenses are increasing due to spiraling health care and medicine costs. The Center for Retirement Research at Boston College announced recently that 43% of working households were in danger of having too little income to fund their retirement needs.

§ Even now, people in the 85 and over age group are the fast growing group entering serious financial distress.

§ As over-achieving baby boomers enter retirement, there will be greater emphasis on doing more with retirement than ever before.

§ Homes often represent the largest asset for retirees and over 80% of these people own their homes. People in the 65 and over age group are sitting on over $2,900,000,000,000.00 in untapped home equity while at the same time having the lowest median income.

WHAT IS A REVERSE MORTGAGE?

A Reverse Mortgage is a special type of “loan” that lets senior homeowners convert a portion of the equity in their home to cash. These loans are regulated and in most cases backed by the Federal Government in order to protect the homeowner. To qualify, the homeowner simply has to be over 62 years old, own his/her own home and have significant equity in their home (usually 50% or more). There are NO credit or income requirements or health check requirements.

Under a reverse mortgage the homeowner makes NO monthly payments, but just like a conventional “forward” mortgage the homeowner retains the title to the home while the property is pledged to the lender as security for the upfront loan. The homeowner remains responsible to pay taxes, insurance, and any other obligations that might create a lien on the property as well as to maintain the property. Some or all of the costs of setting up the loan can be paid with loan proceeds advanced at closing.

WHAT CAN THE LOAN BE USED FOR?

Reverse Mortgages can give older homeowners the funds they need in order to lead a more secure, independent retirement! Proceeds from a reverse mortgage are very flexible and can be used for any purpose the homeowner wishes. Many older adults are having trouble making monthly ends meet due outliving their retirements and/or experiencing surprising, costly health care bills. Beyond basic life needs, many older homeowners find they need cash for a variety of other reasons.

- Payoff existing mortgage.

- Home repair or modification.

- Purchasing better health insurance or long term care insurance.

- Upgrading primary residence or purchasing a second home

- Purchasing a higher value life insurance policy to enhance their estate.

- Travel

- Gifts for children or philanthropy

- Reducing estate tax base and/or funding estate tax payments.

These benefits come without the older adult touching their retirement assets and without tax on the loan proceeds, all while keeping the homeowner in their home for as long as they would like!

HOW DOES THE AVAILABLE LOAN AMOUNT GET DETERMINED?

The amount of loan proceeds available to the homeowner on their age, the appraised value of home, the costs associated with the loan and regulations set by the Federal Housing Administration or loan investors. Generally speaking, the older the homeowner is and the more equity they have in their home, the more cash they can receive. The higher the home value, generally the higher the loan amount for which the homeowner may qualify. Interest rates are set by the federal government and do change over time.

Lower rates allow more cash to the homeowner.

HOW DOES REPAYMENT WORK?

Over time the loan balance on a reverse mortgage will rise. It rises because the homeowner is being advanced money and is being charged interest. BUT, no payments are being made, so the homeowner’s equity slowly drops over time.

No repayment is required under a reverse mortgage as long as the homeowner lives in the home as their primary residence. When the last surviving homeowner passes away, sells the home or moves away, the full loan balance comes due. The loan balance can never exceed the value of the home (after deducting costs of sale) at the time that the loan becomes due. Reverse mortgages are non-recourse loans. These loan types protect the homeowner AND the estate from owing more than the property is worth.

DIFFERENT TYPES OF REVERSE MORTGAGES

There are two basic types of reverse mortgages. First is the federally insured Home Equity Conversion Mortgage (HECM) which accounts for over 80% of all reverse mortgages in the United States. Second, there are proprietary reverse mortgage products developed by individual lenders; the “Home Keeper” sponsored by Fannie Mae and the “Cash Account” sponsored by Financial Freedom Corporation (a specialized division of IndyMac Bank Corp.) are the more popular options.

The proprietary products tend to be best for homeowners with high value homes. A quick conversation and review of your particular financial situation with one of our counselors will help determine which product is right for you.

WHAT ARE THE OPTIONS FOR GETTING THE LOAN PROCEEDS?

Homeowners can generally choose among different options for receipt of their loan proceeds. Payment options can be changed at any time on remaining non-disbursed loan proceeds. Listed below are the options for receipt of proceeds:

Tenure – The homeowner receives equal monthly payments from the lender as long as the home is occupied as the owner’s primary residence.

Term – The homeowner receives equal monthly payments for a period of months selected by the homeowner.

Line of Credit – The homeowner may draw loan proceeds in amounts and at times he/she chooses until the credit line is exhausted.

Lump Sum – The homeowner may draw all or any lesser amount available from the loan proceeds at the time of closing.

Modified Term – The homeowner may combine a line of credit with monthly payments for a number of months selected by the homeowner.

Modified Tenure – The homeowner may combine a line of credit with monthly payments as long as the home is occupied as the homeowner’s primary residence.

WHAT ARE THE COSTS OF A REVERSE MORTGAGE?

Many of the costs and fees necessary to obtain a conventional forward mortgage apply to obtaining a reverse mortgage. You can expect to be charged an origination fee, up-front mortgage insurance premium (for HECM only), an appraisal fee and certain other standard closing costs. Generally the reverse mortgage is a good solution for those seniors that intend to remain in their homes for at least several more years. More attractive options may be available for those with short-term capital needs. The longer a reverse mortgage is in place, the cheaper it gets!

Important to note! In most cases loan costs are capped by federal regulations and may be financed as part of the reverse mortgage itself. The government requires the lender to provide a FULL DISCLOSURE of loan costs known as the Total Annual Loan Cost RATE (commonly referred to as TALC). The TALC is similar to an APR on a forward mortgage; this rate includes all loan costs and is the average annual rate that would generate the total amount owed at any point if it were charged against the disbursed proceeds to that point. These TALC rates are an approximate “cost of capital” and can be used to evaluate the suitability of a reverse mortgage vs. other financing options! Contact one of our counselors for an in-depth explanation of each type of fee and resulting loan cost!

SOME COMMON MISPERCEPTIONS

In recent years, the federal government has more tightly regulated reverse mortgages in order to strengthen their ability to help older adults navigate retirement. Some common misperceptions are:

“The lender takes the house!” – FALSE - The homeowner always retains the title to the house. A reverse mortgage is only a loan.

“I can be thrown out of my home” – FALSE – The homeowner stays in the house until a maturity event occurs.

“I or my estate can owe more than the home is worth.” – FALSE - A reverse mortgage is a non-recourse loan. The homeowner can NEVER owe more than the home is worth.

“My heirs will never support this idea!” – FALSE - Experience has shown that children, other family members and advisors are more concerned about retirees’ present quality of life and ability to make ends meet than about future inheritance.

GET MORE FACTS!

Reverse mortgages can be used not only to meet the immediate financial needs of older adults but are also useful tools in planning the long term needs of those close to retirement. If this has been an interesting report for you, please take the time to contact your real estate financial experts at Legacy Financial Services. We encourage you to involve your trusted advisors as well; family, friends, financial advisors, legal advisors and tax advisors. Importantly, if you decide to proceed with learning more, homeowners are required to attend counseling from an independent HUD-approved counseling agency. Any questions you have should be addressed during that session. Again, bring along your advisors!

The financial security and independence provided by a reverse mortgage can allow many older adults to enjoy retirement in the comfort of their own home when many otherwise could not. Let us help you decide if a reverse is right for you!

We at Legacy Mutual Mortgage hope you have enjoyed this special report. Should you need more information, please go to the website at www.texasreverse.net or call Melinda Hipp, Reverse Mortgage Specialist at (877) 492-4900.