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Punisher 12-09-2013 10:44 PM

Reverse Mortgage Discussion - payments are optional
Here at Monument Financial, we offer a unique home loan for borrowers over the age of 62, administered and insured by FHA, where the monthly mortgage payments are optional, called a Home Equity Conversion Mortgage (HECM), also known as a Reverse mortgage. The loan proceeds can be given to the borrower as a lump sum, a credit line, or in monthly payments like an annuity. By eliminating monthly payment obligations, the reverse mortgage can supplement a borrower’s income, increase their cash flow, or even make investing in rental real estate, or expanding a business, a less risky endeavor.

Fixed rates are currently in the high 4’s and low 5’s, variable rates are in the high 2’s and 3’s. Qualifying is easy; based on borrower’s age and value of property. The loan is secured by a Trust Deed, so ownership of the property remains with the borrower’s Estate. If payments are made, the borrower gets the mortgage interest tax deduction. Consequently, if payments are not made, the interest will accrue, causing the balance to increase. If the balance of the loan exceeds the value of the property, the borrower is not personally liable for the difference; the FHA insurance covers any lender losses. Finally, the loan only needs to be paid off (or property sold), within 6 to 12 months, after the last borrower leaves the property.

Careful evaluation must be made to ensure this loan is the best tool for each borrower’s intended goals, as sometimes it is not the right product. The loan process is very easy; however we do refer our clients to an FHA approved counselor for formal counseling before the application is even signed. For an easy to read breakdown of the various loan options, and to get the conversation started, please don’t hesitate to give Steve a call at 1-714-660-1239 or toll free at 1-877-257-7520.

More information is available, feel free to PM us, or post your questions here. Also, here's a link to FHA's website for more info:


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