Reverse Mortgage

Reverse Mortgage

The Future of Retirement is Changing

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Congratulations on taking the steps towards learning more about a HECM Reverse Mortgage!
“Reverse mortgages need to be considered as part of a retirement income plan. Home equity is the largest personal asset of the Baby Boomer generation and is often ignored in retirement income planning.”
~Jamie Hopkins, co-director of The American College New York Life Center for Retirement Income

 What is a HECM Reverse Mortgage? 

A HECM Reverse Mortgage is the future 4th Leg in Retirement Planning. Seniors who have equity in their homes and are searching for alternate retirement funds. Your home is nothing more than a retirement fund/savings account and can be used in the same manner for those who qualify. 
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Why utilize a HECM Reverse Mortgage?

TAX PLANNING OPPORTUNITIES
Improve the sustainability of your portfolio by utilizing a non-market correlated income source which can reduce the withdrawal rate early in retirement. If you are nearing retirement age (62), have a 401k and could use the cash but do not want to pay the income tax repercussion from tapping into your 401k early, the HECM Program may be for you.

ELIMINATE MORTGAGE PAYMENTS
If you have equity in your home and need money to pay for home renovations, medical and daily living expenses, or simply want to pay off your existing mortgage and eliminate the monthly mortgage payment, the HECM program may be an option for you.

AGE IN PLACE
Remaining in the home where you raised your family and created irreplaceable memories is the dream of most homeowners; however, many homeowners worry as they near retirement because they will not have a steady income stream to offset housing expenses and will have to downsize and move away from that home. A Reverse Mortgage may be an option to allow you to remain in the home you have called yours for so many years.
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Truths and Basics of a Reverse Mortgage

  • Homeowner required to pay property taxes and insurance (or can create “set aside”)
  • Must occupy the home as a primary residence (6 months or longer per year) 
  • Financial Proceeds 100% tax free (confirm with tax advisor)
  • Annual Assessment done to confirm you are living in your home
  • Proceeds never come due (can occupy the property until 151 years old)
  • Proceeds do not effect Social Security or Medicare
  • Heirs NEVER responsible for financial obligation (Non-Recourse)
  • Proceeds available through: lump sum payout; line of credit; term payments; tenure payments
  • Must be 62 years or older to qualify

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Disclaimer:
Preferred Group Mortgage & Consulting Services is headquartered at 110 S. Oak Ave, Bartlett IL, 60103. A Home Equity Conversion Mortgage increases the principal mortgage loan amount and decreases home equity (it is a negative amortization loan). Available with a Tenure-Based or Modified Tenure plans, so long as the Borrower does not default on the loan. As with any loan the proceeds of a Home Equity Conversion Mortgage are paid out tax free. Please consult with your tax advisor. Borrowers are responsible for paying property taxes and homeowner’s insurance. We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes or insurance payments, or does not otherwise comply with the loan terms. These materials are not from HUD or FHA and were not approved by HUD or government agency.
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