California Reverse Mortgage News

     Here are the top 5 reasons Financial Advisors are starting to favor the HECM
     Reverse Mortgage and here's a hint, it's not because of the reasons you hear
     about on t.v.

1. The HECM Line of Credit growth factor.  The unused line of credit grows over time 
    on the growth rate attached to it, so as interest rates rise, the amount of available credit
    rises as well. So it serves as a hedge against a rising interest rate market.  A Financial
    Advisor can build other strategies for their client on top of that.

2.  Even in a declining home value cycle, the amount of usable available credit on the   
     HECM Line of Credit increases.  The growth rate is not tied to home values.  In theory, 
     your amount of available credit to use can be greater than the home value itself and if
     the home needs to be sold and property is up side down, there is FHA mortgage
     insurance that will cover the gap.  Plus the lender can't close the line of credit if home
     values fall, whereas on a bank HELOC they can close the line.

3.  Having a HECM Reverse Mortgage standby Line of Credit, gives the senior citizen an
     option to delay taking Social Security benefits.  The senior can let the SSI ripen on the
     tree and take monthly tax free advances on the HECM Line of Credit and delay taking
     SSI benefits until a later time when their monthly benefit will be greater.

4.  The HECM Reverse Mortgage Line of Credit will also give the senior an option for
     monthly income advances to avoid dipping into other liquid assets in a down market
     and provide a cash reserve to weather market turmoil.

5.  You can buy a home with the HECM Reverse Mortgage purchase option.  A large down
     payment is needed on the new owner occupied home, and than no payments
     are due on the balance of the loan. This means that the senior citizen can keep more
     money in their pocket from the sale of their existing home, since they don't have to pay
     all cash, and after making the large down payment, not have any monthly mortgage.

     The HECM Reverse Mortgage is no longer a loan of last resort, it's for savvy seniors 
     who want more options on how to handle their money and the options above aren't 
     mentioned in the television commercials that we see.
     Plus with the newly passed legislation, the product is much safer and friendly to 
     seniors than in the past.
     Feel free to visit our website for articles and videos on for more information.    
   
     Best,
     Kevin Walton
     Best Capital Funding
     www.californiareversemortgage.biz
    

JP Morgan is creating an investment fund where it selects companies with an eye on technological innovation when it comes to helping senior citizens stay in their homes and improving their lifestyles.
AARP is partnering with JP Morgan in this venture, and the fund is to be called, The Innovation Fund.
Guidance from AARP will help target companies in which the Innovation Fund will have $40 million in funds to invest.
To learn more about this unique fund click here.

When long term interest rates increase, reverse mortgages take a direct hit.
How? The prevailing interest rate is among the criteria that's used to determine your principal limit factor, or how much of a loan you qualify for.

This increase affects all reverse mortgage loan types.
The amount of equity in your home, the age of the youngest borrower, demonstrating your ability and willingness to pay monthly property expenses (tax, insurance h.o.a.) are the other major factors that go into qualifying for a reverse mortgage.
A half percent increase may not affect qualifying all that much, but anything up over a cumulative one percent increase, go take a bite out of the funds you would receive.

However, if you have an already existing HECM reverse mortgage line of credit, an increasing rate may be a good thing because of the growth rate.
As rates go up, and you have a standby HECM reverse mortgage line of credit, so does the growth rate on your line of credit which means more funds for you to access since the available line of credit grows at a monthly rate over the life of the loan.
If you have questions on the HECM reverse mortgage line of credit growth rate, feel free to call Kevin Walton. 800-506-0632 ext. 0 or visit our website, www.californiareversemortgage.biz

Best,
KW