Write More Business Than the HECM Alone with Equity Elite®

At Reverse Mortgage Funding (RMF), we offer an innovative lineup of Equity Elite® products to help you write more business than with HECMs alone. Your clients can go big or go small, but more importantly go home to the most suitable house, condo or 55+ community to spend their retirement years.

Equity Elite® offers big benefits for you and your eligible clients:

A larger market. Available on non-FHA-approved condos, including age-restricted communities, so you can expand the condominium market up to three times the HECM program.*

A bigger pool of borrowers. Designed for customers as young as age 55 in select states means more eligible borrowers.

More savings for more clients. No upfront mortgage insurance premiums mean lower costs, making this option attractive to more clients on a fixed income.

Not just jumbo amounts. Borrowers are eligible for loan amounts from as little as $50K up to $4MM to free up more home equity to help clients retire comfortably.

It’s time to take your business to the next level with a propriety product like no other. Call your Account Executive today to learn more.

 



*This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency
Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply.
Not applicable in all states; MA imposes a maximum loan amount of $2MM. Visit www.reversefunding.com/equity-elite for details.
Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.
Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have a short period of time (for example, 30 days from a due and payable letter or an alternate time specified by the loan servicer if extensions are available under the circumstances) to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite reverse mortgage upon the borrower’s death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider a FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details).  Under the Equity Elite reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity and/or default event, as specified in the Security Instrument, occurs.

Downsizing with a HECM for Purchase: Opening the Door to an Untapped Market

Older homeowners may find themselves in a home that doesn’t quite fit their retirement needs. Whether it’s too spacious for upkeep or in neighborhood they’ve outgrown, they may be looking for a new home to live out their best years.

If you have older clients who are homeowners looking to “right size”, offer them a flexible financing option for the home they really want. A Home Equity Conversion Mortgage (HECM) for Purchase is a type of reverse mortgage loan that can help you meet the varying needs of your clientele while gaining a competitive advantage in your market!

With the flexibility of reverse mortgage purchase financing, older homeowners

can combine a one-time investment of their funds with loan proceeds to buy a new home or condo. The best part? Monthly principal and interest payments are optional, so your clients can maximize their cash flow and increase their buying power as you turn more shoppers into buyers.* 

The ABCs of a HECM for Purchase

A HECM for purchase is available to borrowers age 62 or older, so they can retire comfortably in a home that best suits their needs.

·       Offers loan amounts up to $970,800

·       Created in 2009 and federally-insured

·       Requires a down payment of 45% to 62% — depending on borrower age — and down payment cannot be borrowed funds

·       New home must be primary residence

·       Includes single-family homes, FHA-approved condominiums, townhouses or Planned Unit Developments (PUDs), and manufactured homes meeting HUD guidelines

 

There’s also Equity Elite® for Purchase

The Equity Elite® for Purchase financing option was designed for borrowers as young as age 55 in select states.**

·       Offers loan amounts up to $4 million for higher-value homes and condominiums

·       Requires a down payment of 55% to 75% of the purchase price (could be as low as 42% for older clients)§

·       Available for more condominiums, since FHA-approval is not required

·       The Equity Elite® ZERO product offers a lender credit to be applied toward most closing costs# and allows seller concessions of up to 6% of the sales price toward origination fees and other closing costs

 

Ready to grow your business with reverse mortgage purchase financing? Call your Account Executive today to get started.  




*As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.
**Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details.
Not applicable in all states; MA imposes a maximum loan amount of $2MM. Visit www.reversefunding.com/equity-elite for details.
§ This down payment range assumes closing costs will be financed into the loan.
# Excludes state-specific mortgage tax fees and/or title transfer fees. With this pricing option, borrower receives a lender credit covering nearly all closing costs. There is a non-refundable independent counseling fee of approximately $125 on average, which the borrower pays directly to the counseling agency. Terms and conditions apply. Not available in all states.
Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.
Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have a short period of time (for example, 30 days from a due and payable letter or an alternate time specified by the loan servicer if extensions are available under the circumstances) to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite reverse mortgage upon the borrower’s death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider a FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details).  Under the Equity Elite reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity and/or default event, as specified in the Security Instrument, occurs.



Retirement Planning 101: Thinking Outside the Box with a Reverse Mortgage

A reverse mortgage isn’t just for homeowners short on cash! It offers a reliable funding source to secure a comfortable retirement, helping older Americans support the lifestyle they deserve.

Today, reverse mortgages are used by more than a million households as a cornerstone of their retirement strategy. One of the best features of this type of loan is that your clients can use the funds as they wish, at their discretion. Here are just some of the ways a reverse mortgage can play a significant role in retirement financial planning:

1.     Eliminate traditional mortgage payments. With a reverse mortgage, monthly payments are optional. Borrowers may pay as much, as little or nothing at all, eliminating a monthly bill.*

2.     Establish a “standby” line of credit. Borrowers can gain peace mind knowing they can tap into their equity as needed to alleviate financial worry. Similar to an emergency fund, they can ensure the money is there if and when they need it most. And remember, the perk of opening a reverse mortgage line of credit early is that your client may borrow more now to enjoy later.

3.     Coordinate portfolios. Borrowers can use proceeds from the reverse mortgage to allow their portfolio to grow (by avoiding withdraws) and reduce the need to take distributions when the portfolio is down.

4.     Postpone Social Security benefits. The maximum Social Security benefit for someone of full retirement age this year is a monthly payment of $3,345. While benefits can be claimed as early as age 62, collecting them before full retirement age may result in reduced monthly benefits for the rest of that individual’s life.

5.     Finance health expenses. Out-of-pocket health costs for older Americans covered by Medicare can be astronomical. Not to mention the costs of prescription medications, hospitalizations and at-home medical care that retirees must factor in. A reverse mortgage may be a viable option to finance these expenses.

6.     Fund home renovations. A reverse mortgage can be a great tool for making necessary home renovations and modifications to age in place — from widening doorways to redesigning a kitchen. If your clients plan to remain at home, but can’t make a substantial investment in these upgrades, a reverse mortgage can offer them the funds they need. 

7.     Cover the “extras”. The loan proceeds can be used however your clients deem necessary.
So, if their retirement plans include traveling, eating at upscale restaurants and enjoying their lives to the fullest, a reverse mortgage may afford them those luxuries.

Remind your clients of all the ways these funds can help create a more fulfilling and enjoyable future. And don’t hesitate to reach out to your Account Executive to learn how RMF can help.

 

*As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.

 

The Threat: Sequence Risk. The Solution? A Reverse Mortgage Loan

The joy of retirement can be overshadowed by a slew of financial challenges — from inflation to rising medical costs to market fluctuations. But what your clients might not be familiar with is the sequence of returns risk, also referred to as sequence risk.

Sequence risk arises from the order in which investment returns occur. For example, if the market declines early in retirement, and an individual continues to make withdrawals, this could result in negative portfolio returns later on, making it very difficult to recover. Add in the ongoing inflation mess and today’s retirees have some serious financial threats on their minds.

 

Saving their savings

To protect a retirement account from the damage of sequence risk, your clients may consider the following strategies:

 

  • Diversifying their portfolio by investing in high-quality bonds
  • Working past retirement age and contributing more to their retirement account
  • Saving and investing during retirement, as much as their income will allow
  • Considering a buffer asset to avoid selling at losses — like a reverse mortgage loan

 

Tapping into home equity wealth

Homeowners ages 62 and older have collectively amassed $10.19 trillion in home equity. By leveraging this resource, your clients may get the cash flow they need to avoid selling investments during an unfavorable time. This strategy can help maintain investments, increase the longevity of their portfolio, boost their retirement wealth and build a safety net for the years to come.

A reverse mortgage can be an effective financial tool for the right candidates. Contact your Account Executive with any questions on how RMF can help you grow your business with this opportunity.