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.

What Documents do I Need to Complete a Reverse Mortgage in San Antonio, Texas?

Following is a list of documents that will be required to complete a reverse mortgage application.

1. Original signed copies of all pages of the loan application and all disclosures all completed in blue ink and dated the same date on all forms.
2. Original Reverse Mortgage counseling certificate provided by third party reverse mortgage counselor
3. Proof of date of birth (driver’s license or birth certificate) and social security number (social security card or medicare card). (call if neither are available.)
4. Copy of recent homeowner’s insurance bill or name and phone number for insurance agent.
5. Copy of your survey of the home. This would normally be located in the package you received from the title company when you first purchased or last refinanced your home. The survey must be readable and have the surveyor’s seal. Please note that you must have a survey redone if you cannot locate it or you have significantly made structural changes to the home since it was last done.
6. Original death certificate of spouse if a widow(er). This is needed only if deceased spouse has not been removed from title to property.
7. Copy of your current mortgage statement/coupon book or names, addresses and account numbers for all mortgage debt and liens on the property.
8. If the property is held in a trust please provide us with a copy of the trust agreement.
9. If the person signing has Power of Attorney for the borrower, please provide us with a copy of the Durable Power of Attorney.
10. If the property previously had a mortgage balance that was paid off in full, please provide us with a copy of the satisfaction of mortgage, release of lien or warranty deed.
11. Check for $350 to Legacy Mutual Mortgage to cover cost of appraisal. (This cost can be rolled into your loan and this check is not cashed unless the client decides not to continue with the process after the appraisal has been completed.)

To start the Reverse Mortgage process, contact Melinda Hipp, Reverse Mortgage Specialist, at (210) 492-4900 or melinda@legacymutual.com. Visit Melinda at http://www.texasreverse.net.

How the Reverse Mortgage Process Works in San Antonio, Texas

Like any other financial transaction, getting a reverse mortgage involves a number of steps designed to protect both you and the lender.

Here are the steps you can expect to go through when you apply for your reverse mortgage with Melinda Hipp and Legacy Mutual Mortgage:

1. Initial Discussion
The first thing we like to do is talk to you, either over the phone or in person, about whether a reverse mortgage is right for you. We talk about the pros and cons, how it works, how much money you might receive and anything else you’d like to know about. Then you decide whether you want to take the next step and I provide you with an estimate of funds available.

2. Counseling
If you decide that a reverse mortgage is the right choice, you receive free independent counseling from a certified, HUD-approved counselor to make sure that you have had all your questions answered and that there's been no confusion. A list of available counselors is available from me for your use. It’s a protection device that the government has built into the process of obtaining a reverse mortgage.

3. Appraisal
Then we arrange for an appraisal to determine the objective market value of your home, and whether any repairs will be required to meet Federal Housing Administration guidelines.

4. Inspection
In many cases an inspection is required to make sure that the home is structurally sound and that there’s no extensive termite or dry rot damage. Sometimes repairs may be required and the costs can be rolled into your reverse mortgage.

5. Underwriting
After the appraisal and inspection reports come in we go through all the normal processing procedures that you might find in any mortgage.

6. Closing
The final step is the closing where you receive the money, or proceeds, from your reverse mortgage. You can choose to receive the payment in one of three ways: as a lump sum, as a monthly payment or as a line of credit.
***Then it's up to you: pay bills, fix up the house, help a family member, or use the money to enjoy your life.***

Melinda Hipp can be reached at (210) 492-4900 or melinda@legacymutual.com

Visit her website for more free reports at www.texasreverse.net

For Families of Seniors in San Antonio, Texas

A reverse mortgage could be an ideal way for your parents to benefit from the wise investment they made in real estate perhaps decades ago. If you are the son or daughter of a senior who is age 62 or older, you should understand the facts about reverse mortgages.

· Get money without moving. A reverse mortgage can help your parent(s) create a new source of tax-free* money without having to sell their home. In fact, they can stay in the home they love for as long as they'd like.

· Financial independence. A reverse mortgage allows seniors to tap into money they've earned in the form of home equity, and avoid having to depend on relatives for financial assistance.

· Keep title to the house. Your parents retain full title to their home and have no risk of losing the home to the lender. And no matter what happens to the housing market, your parents can never owe more than the value of their home when it is sold.

· Proven safe. Over 200,000 Americans have already benefited from reverse mortgages. The fact is that HECM reverse mortgages are government-protected loans and many safeguards are in place to protect seniors from unethical lending practices.

· Repayment options. If your last-remaining parent passes away while living in the home, you, as the heir(s), simply pay off the reverse mortgage principal plus accrued interest. If you—or a sibling or other relative—want to keep the home in the family, you can take out a new traditional mortgage or use other assets to pay for it. If no one in the family is interested in keeping the home, it can be sold to repay the loan. Any money left over goes to the estate to be shared according to your parents' last wishes.

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

*Always check with your tax advisor on any decision regarding your own personal tax or income situation.

Top Ten Things Seniors Should Know if Considering a Reverse Mortgage in San Antonio, Texas

Department of Housing and Urban Development (HUD) explains program

March 28, 2009 - Reverse Mortgages – the government insured program that allows older Americans to use their home equity - are becoming increasingly popular. The Department of Housing and Urban Development (HUD), which insures these loans through its Federal Housing Administration, has issued a list of ten key things older Americans should know about this program.

HUD's Reverse Mortgage is a federally-insured private loan, and the agency says it is “a safe plan that can give older Americans greater financial security.”

“Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more,” according to HUD.

“Since your home is probably your largest single investment, it's smart to know more about reverse mortgages, and decide if one is right for you.”

Following are the ten things to know as prepared by HUD.

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you.

But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well.

2. Can I qualify for a HUD reverse mortgage?

To be eligible for a HUD reverse mortgage, HUD's Federal Housing Administration (FHA) requires that the borrower is -
● a homeowner,
● 62 years of age or older;
● own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and
● must live in the home.

You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.

3. Can I apply if I didn't buy my present house with FHA mortgage insurance?

Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.

4. What types of homes are eligible?

Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.

5. What's the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments.

The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less.

Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don't make payments, because the loan is not due as long as the house is your principal residence.

Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

6. Can the lender take my home away if I outlive the loan?

No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home's value.

7. Will I still have an estate that I can leave to my heirs?

When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender.

The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.

8. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

9. Should I use an estate planning service to find a reverse mortgage?

I've been contacted by a firm that will give me the name of a lender for a "small percentage" of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.

10. How do I receive my payments?

You have five options after taking any or all cash upfront in a lump sum:

● Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

● Term - equal monthly payments for a fixed period of months selected.

● Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower's choosing until the line of credit is exhausted.

● Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.

● Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower.

For a FREE estimate of what you can expect to receive from a Reverse Mortgage, please contact Reverse Mortgage Specialist, Melinda Hipp with Legacy Mutual Mortgage, at (210) 492-4900 or (877) 492-4900. You can also email her at melinda@legacymutual.com or visit her website:

www.texasreverse.net