Chris Beard would like to develop referral partnerships with bankers, financial planners, insurance agents, elder care attorneys, CPA's, Home Health Agencies and Realtors to discuss how a FHA Insured HECM reverse mortgage can be an excellent financial.
2. Senior Baby Boomers Are Explosive
Segment of Market.
• Every day over 10,000 Baby Boomers will reach the age of 65. That is going to keep
happening every day for the next 19 years.
• 35% of Americans at present over the age of 65 rely almost entirely on Social Security
payments alone.
• Baby Boomer home ownership is over 70 percent.
3. The U.S. population 65 and older is now the largest in terms of
size and percent of the population,
4. More than one third of adults, 34%, surveyed in November 2010 said that
they had no savings for retirement, and 27% had no personal savings.
5. How does a reverse mortgage loan differ from a
conventional mortgage ?
With a conventional mortgage or home equity loan:
• Borrowers qualify based on their income, employment
and credit score.
• These loans require the borrower to repay the amount
borrowed by making monthly mortgage payments over a
specified term to the loan servicer.
With a reverse mortgage loan:
• Borrowers 62 + of age
• There are no income, employment or credit score qualifying
restrictions
Primary residences only
• No monthly mortgage payments are required from homeowner
as long as the conditions of the loan are met
6. Why Help Clients With Reverse Mortgage?
• Reverse mortgage loan proceeds may be used for any
purpose as a tax free proceed :
• Meeting daily or monthly expenses
• Covering healthcare , home health care, Life Insurance
premiums ,LTC premiums
• Long Term Care of spouse
• Remodeling or home repairs and upkeep , paying taxes and
homeowners insurance premium
• Consolidating credit card debt
• Delaying Social Security Income till FRA - Full Retirement AGE
means more money 5.5% -8% more per year if they wait until
age 70-thus increasing the amount of one's ultimate monthly
Social Security income.
• Estate Planning – gifting
• Eliminate a current conventional mortgage payment expense
7. Disbursement Options
• • Fixed monthly payments
• • A line of credit - earns interest until withdrawn
• “through a combination of a retirement portfolio and reverse
mortgage equity line withdrawals that the cash flow survival
rate was higher than if used as a last resort and provided a
higher net worth after a 30 year period”
• • Lump sum - proceeds taken up front as cash
Or a combination of any of these options
• Modified Tenure- combination of LOC + monthly payments as
long as they reside in home.
• Modified Term - combination of LOC + monthly payments for
specific period of years
8. HECM Line of Credit
LOC Grows at Current rate until withdrawn
9. HECM SAVER- lower home value solution
HECM Saver Rolled out in October 2010
• HECM Saver is a low cost alternative to the HECM
Standard Reverse Mortgage. The HECM Saver
significantly reduces the upfront Mortgage Insurance
Premium (MIP) therefore reducing the total closing costs.
• The initial MIP premium is 2% on the standard HECM
and is dropped to .01% for the HECM Saver
• This can make the HECM Reverse Mortgage a more
attractive option for a borrower with a lower home value
• The drawback is that the borrower will be given a lower
principal limit from which they can draw out the equity
11. HECM SAVER- lower home value solution
MIP Reduced
Available Funds
Reduced
12. Retirement Solutions
• How Can We Work together to put these strategies together for
seniors:
• Financial Planners
• Stretching the retirement income of your clients with the Line of
credit reverse mortgage
• Insurance Agents
• Utilizing equity line to fund a whole life or universal life premium
or Long Term Care Policy – Home Owners Insurance
Premiums
• Realtors
• Show a borrower how they can downsize using a reverse
mortgage HECM for Purchase of a new more accommodating
home when they might not otherwise qualify
13. Retirement Solutions
• Case Study #1
•
• Ann and Richard Bartow, both age 80, are looking for a way to
• pay for immediate healthcare needs and be prepared to cover future
• long-term care insurance premiums.
• • The Bartows want stay in their home, which they own free and clear.
• • The last thing they want to do is start making monthly mortgage payments again
• • Their Financial Planner or Insurance agent refer them to Chris Beard a reverse
mortgage consultant.
• • Chris shows the Barrows how a reverse mortgage loan could help address their
needs and ease their financial concerns:
• Current home value $400,000
• Reverse mortgage proceeds $243,000
• The Bartows choose a $55,000 initial lump sum and put the rest of
• their proceeds in a reverse mortgage line of credit. This gives them the
• flexibility to draw out available funds to manage expenses as they arise.
• They are able to stay comfortably in their home and they have financial
• options to manage their expenses.
14. Retirement Solutions
• Case Study #2
• Kim Smith is a recently retired school teacher age 65. She loves the
• convenience and easy maintenance of her villa near the coast, but is concerned
• about meeting her living expenses and increased homeowners insurance
premium on a fixed income.
• • Ms. Smith makes monthly mortgage payments of $1,200, and her remaining
mortgage principal balance is $40,000.
• • Her retirement income sources are limited to a modest pension and Social
Security.
• • Ms. Smith wants to avoid dipping into her personal savings, but thinks things will
be tight.
• • Jim her homeowners agent refers her to Chris Beard, a FirstBank reverse
mortgage consultant.
• • Chris shows Ms. Smith how a reverse mortgage loan could eliminate her
monthly mortgage payments and give her budget more breathing room and cover
housing expenses like homeowners insurance and taxes.
15. Retirement Solutions
• Case Study #3
• Empty nesters Jean and Thomas Parker, both 74,
• want to buy a smaller, more manageable single-story home ,they work with real estate agent
Shelley Smith to sell their current two-story home.
• • In a separate transaction, the Parkers want to buy a new single-story home priced nearby
senior housing community.
• •Realtor Shelly Smith introduces the Parkers to Chris Beard, a FirstBank reverse mortgage
consultant.
• • Chris shows the Parkers how a fixed-rate reverse mortgage loan for purchase feature the
additional funds they’ll need:
• New home purchase price $300,000
• Reverse mortgage proceeds $200,309
• Cash required to close $99,691
• The Parkers combine $99,691 from the sale of their departure home
• with the. $200,309 reverse mortgage loan proceeds to buy a new home
• for $300,000. They move in, without the required monthly mortgage
• payments of a traditional mortgage - and no more stairs to climb!
16. Purchase Market Opportunities
• The current housing conditions make the reverse mortgage for
purchase a great solution for those over 62 looking to transition or
relocate. Here are a few reasons that make now the time to consider
the reverse purchase:
• Untapped Resource -Real Estate Purchase Reverse is untapped – underutilized loan
program- lack of understanding or awareness
• Home Values -Current home values are 33% lower than in 2006
• Inventory – Large volume of homes on the market to choose from
• Tightened Credit- qualifying requirements for conventional financing– Reverse does not
underwrite this way
• Less disposable income- less income needed with reverse borrowers plus borrowers
keep nest egg and have no future payments
• Low Interest Rates- historically low expected at least through part of 2013
• Home Equity- of adults older than 65, four in five own their homes outright, without a
mortgage
• Growing Senior Population- 20% of population over 60 years old -By 2020 expected to
reach 76 million in US population
• Retirement Planning- Financial planners recommend utilizing your home as a resource to
extend income in combination with SSI & pensions over longer period of life rather than just a
last resort resource
17. Realtor Purchase Market Opportunities
• Realtors help your clients and grow your own business
opportunities:
Show buyers how they can buy/ qualify for a higher value home
• Show buyers how they can purchase a home with no future mortgage
payments
• Help Seniors buy when credit score and income requirements are an
issue for them (Reverse does not underwrite that way )
• Educate- A reverse mortgage can be used to pay for: homeowners
insurance, taxes, Life Insurance, LTC, Insurance Premiums and Home
Health Care. To allow borrowers to stay in there home and age in place,
prevent foreclosure
• Income- A Reverse Refinance Program can fund 2nd Homes, Vacation
Homes and Rental Home Purchases and fund Retirement Income for Life.
• Relocate & Remodel -A reverse mortgage can help a senior buy a more
accommodating home or fund repairs and renovations to homes for
seniors (roofs, pools, elevators, safety ramps, and bathroom safety bars
and more
18. Realtor Purchase Market Opportunities
Comparison of a 62 year old couple sell
Conventional Purchase
there current home and purchase a lower
Sales Price Current home $350,000 maintenance villa with amenities and
places a large portion of assets in
Sellers closing cost $28,000 reserves with no future mortgage
Net from Sale $322,000 payments
New Home Price $250,000
HECM Purchase Reverse
Remaining Assets $72,000
Sales Price Current Home: $350,000
Sellers closing cost $28,000
Net from Sale $322,000
New home price $250,000
Reverse Mortgage $154,750
Proceeds
Cash From borrower sale $95,250
Remaining Assets $226,750
19. Contact me to learn more:
Contact Information
Chris Beard, NMLS# 353274
Reverse Mortgage Specialist
9822 Montague Street
Tampa, FL 33626
Cell: 813-857-1254
Toll Free: 866-684-7868
cbeard@firstbankonline.com
www.GoLocalReverseMortgage.com
Borrowers must be age 62 or older. Consult a tax advisor. Reverse mortgage borrowers are required to obtain an eligibility certificate
by receiving counseling sessions with a HUD-approved agency. Family members are also strongly encouraged to participate in these
informative sessions. Call for more detailed program information. Loan proceeds are not considered income and will not affect Social
Security or Medicare benefits. Monthly reverse mortgage advances may affect borrower eligibility for other programs. Consult either a
local program office or an attorney to determine how, or if, monthly reverse mortgage payments might affect a specific situation. This
information is for real estate and building professionals only and is not intended for consumer distribution.
