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
    

Posted by Kevin Walton on October 19th, 2015 10:11 AM
A standby Reverse Mortgage Line of Credit is becoming a must have for young retirees. However it's not to be confused with a bank HELOC.
Here's a few differences:
The Reverse Mortgage Line of Credit has a growth rate attached to it which allows the unused line of credit to grow over time, (no refinance needed)resulting in more future tax free funds to use.
A $100,000 line of credit, left unused, can double or triple in size over time, meaning more tax free funds to use when needed, a bank HELOC doesn't have this feature.

The key is to originate the Reverse Mortgage line of credit as early in age as possible.
Financial Planners like this Reverse Line of Credit feature because it serves as a hedge against rising interest rates, because as rates rise, so does the growth rate on the line of credit which translates into more future funds for the borrower to use.

If the property falls in value, that does not affect the growth rate, it keeps growing, and the Reverse Mortgage lender can not close out the line of credit for that reason, whereas on a bank HELOC, they can close the line of credit for falling property values.

The growth rate has the compound interest feature as well which allows for rapid growth over time, a HELOC doesn't allow for this, in fact it doesn't allow for any growth at all, you have to qualify for another HELOC loan to get more money. 

After allowing time for growth, which means not touching the line of credit for a period of time, once the borrower starts taking advances on the line the Reverse Mortgage line of credit doesn't require any monthly payments to pay it back, a bank HELOC requires a monthly payment.
The borrower however can make a monthly payment on the Reverse Mortgage if they like, it's up to them.  It's worth mentioning that for each month the borrower doesn't make a payment, the interest owed gets tacked on to the balance of the loan.

The standby Reverse Mortgage line of credit is another bucket of tax free income for seniors and the growth rate feature is seldom discussed, but is a powerful tool that can create wealth, protect assets, and help a senior to not outlive their assets.
Educating senior citizens, and the financial services sector will take time but is a worthwhile endeavor.

For questions on the Reverse Mortgage line of credit, feel free to give me a call or drop me an email, or visit my site.

Best, Kevin Walton
Best Capital Funding
Certified Mortgage Advisor and Reverse Mortgage Specialist
www.californiareversemortgage.biz
californiareversemortgagebiz@gmail.com
800-506-0632 ext. 0
Posted by Kevin Walton on October 16th, 2015 10:11 AM

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.

Posted in:Reverse Mortgage and tagged: Reverse Mortgage
Posted by Kevin Walton on October 5th, 2015 10:23 AM

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

Posted by Kevin Walton on September 21st, 2015 10:22 AM