reverse mortgage overview greg mc dermott 9 09
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Put your home to work for youGreg McDermott
Reverse Mortgage Sales Manager
Focus: Eastern Pennsylvania Area
Cover all 50 states
www.reverseworkshops.com
Reverse Mortgage Hotline:
866-518-1020 ext 301
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
1. Consult a tax advisor
What is a reverse mortgage
It’s a home loan that enables you to convert a portion of your home equity into tax-free funds without having to sell your home, give up title, or
take on a new monthly payment. 1
Instead of making monthly mortgage payments, your mortgage pays you. That’s the “reverse” part of a reverse mortgage.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
How a reverse differs from a traditional mortgage
With a traditional mortgage or home equity loan - Homeowners qualify based on their credit history and debt-
to-income ratio. They borrow money which requires making monthly payments.
With a reverse mortgage – Your mortgage makes payments to you and there are no
income, employment or credit score qualifying restrictions.2
2. 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.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Why get a reverse mortgage
A reverse mortgage can give you access to your home’s equity without the burden of monthly payments
Reverse mortgage proceeds may be used for any purpose, including:
Eliminating your existing mortgage
Meeting daily or monthly expenses
Covering healthcare expenses
Remodeling or home repairs
Reducing credit card debt
With the reverse mortgage for purchase feature, the loan proceeds are used to help purchase a new primary residence better suited to your needs
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
How the loan proceeds are disbursed
You have several options to receive your reverse mortgage proceeds, they are available to you in the following distribution options:
Lump Sum — A specific amount is made immediately available (often used to pay off an existing mortgage).
Term — Funds are released in fixed monthly amounts for a set period requested by the customer.
Tenure — Funds are distributed in equal monthly allotments for as long as at least one homeowner continues to occupy the home as a principal residence.
Line Of Credit — Funds remain available for the customer to draw on as needed or in automatic monthly disbursements.
Combination — You can choose any combination of lump sum, monthly or line of credit disbursements. You can even receive an initial lump sum and put the rest in a line of credit. Regardless of how you choose to receive your proceeds, you can adjust your plan as often as you wish to accommodate changing needs.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Three essential facts
As long as all program requirements are met:
1. You retain the title to the property and continue to own your home.
2. Instead of making mortgage payments, you can have a mortgage that pays you.
3. You cannot owe more than the value of the home.
Program requirements include but are not limited to: One of the borrowers continuing to live in the house
Keeping the taxes and insurance current
Maintaining the property according to FHA standards
If the program requirements are no longer being met and you or your heirs choose to retain ownership of the home, the full outstanding loan balance must be paid.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Age and eligibility requirements
You and any co-owners must be at least 62 years old
Your home must be your primary residence
You must own your home free and clear, or the existing mortgage must be paid off with the loan proceeds
Educational counseling with a HUD-approved counselor is required
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
How much can I borrow
The amount that can be borrowed is determined by a HUD formula that is based on the following factors: The age of the youngest
homeowner
The appraised value of the home
The current interest rate
The established lending limit
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
What are the interest rate options
Wells Fargo offers both fixed- and variable-rate reverse mortgages. With a fixed-rate reverse mortgage, your interest rate will
remain the same through out the life of the loan
With a variable-rate reverse mortgage, the interest rate may adjust at predetermined periods. In most variable-rate cases, you may choose monthly or annual
rate adjustments.
The frequency by which your interest rate adjusts – monthly or annually - will not affect the number of loan advances you receive, but will affect how fast or slow your loan balance grows.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
The costs involved with a reverse mortgage A deposit for the appraisal is required to be paid at
the time of application.
There are additional closing costs which may be financed into the loan such as: Origination fee
Title insurance
Mortgage insurance premium
Attorney fees
You are expected to continue maintaining the property and paying the real estate taxes and homeowners insurance premium
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Reverse mortgage repayment
You do not need to repay the loan as long as the program requirements are met, including: You or one of the borrowers continue to live in the house
You keep the property taxes and homeowners insurance current
You maintain the property to FHA standards
The balance due can come from home sale proceeds, or from other resources such as, savings, insurance or possibly applying for a new mortgage. There is no requirement that the home be sold, only that the loan be repaid.
Because the home is the only collateral attached to the loan, any remaining home equity, along with your other possessions, belongs to you or your heirs.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
The reverse mortgage loan process
1. Discuss your post-retirement home financing goals with a reverse mortgage consultant.
2. Receive consumer counseling from a HUD-approved counselor.
3. Meet with a Wells Fargo Reverse Mortgage Consultant to apply for your loan. Fill out an application Select a payment plan Present required documentation
4. Underwriting and loan decisioning process.5. Upon approval, a closing is scheduled. Initial interest rate will
be set the week of closing.6. After any existing debt on your home is paid in full, your loan
proceeds are disbursed.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Frequently asked questions
Who owns the home? You do. You retain the title and ownership of your home. The bank
does not own your home.
Can the bank take my home? No, as long you continue to
occupy the home as your primary residence, pay the appropriate taxes and insurance, and maintain upkeep of your home.3
3. As long as all program requirements are met.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Frequently asked questions
Are there restrictions on how I can use my Reverse Mortgage proceeds?
No. It’s your money to use as you see fit. Some common uses include: Eliminating your existing mortgage
Meeting daily or monthly expenses
Covering healthcare expenses
Remodeling or home repairs
Reducing credit card debt
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Frequently asked questions
Will receiving my reverse mortgage proceeds in monthly payments affect my Social Security or Medicare benefits?
If you opt to receive monthly payments, they will not affect your Social Security or Medicare benefits. However, your eligibility for need-based programs such as Medicaid or state assistance programs may be impacted. We recommend that you consult a tax or legal advisor and your local Area Agency on Aging for advice.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Frequently asked questions
What if I decide to sell my home? You always retain title to your home during the period of
your Reverse Mortgage loan. You can sell your home at anytime and pay off the reverse mortgage with the proceeds.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
Well established. Well respected. Wells Fargo.
Wells Fargo Home Mortgage is the nation’s leading retail originator of reverse mortgages.
Wells Fargo & Company is a diversified financial services company with 276,000 team members who provide banking, insurance, investments, mortgage and consumer finance for more than 48 million customers.
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A., and has a presence in mortgage stores and bank locations serving all 50 states.
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Greg McDermott 866-518-1020 ext 301 or www.reverseworkshops.com
All program requirements must be met. The information in this presentation is accurate as of the date of printing and is subject to change without notice. Wells Fargo Home Mortgage a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All Rights Reserved. #102107 5/09
Financial independence and peace of mindI can help you choose the Reverse Mortgage financing solution that best fits your individual needs and requirements.
Greg McDermotReverse Mortgage Sales ManagerGregory.mcdermott@wellsfargo.com or gregoryjmcdermott@yahoo.com
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