Unlock home equity to achieve your retirement goals
The Retirement Reality Today, older Americans face a great deal of uncertainty as they move through their retirement. With rising healthcare costs, a volatile stock market and ongoing mortgage and credit debt, it’s not surprising that 87% of Baby Boomers are not very confident that they will retire in a comfortable lifestyle. 1 Many are afraid that their savings accounts, investment portfolios and government benefits will not provide enough money to sustain their changing needs and financial obligations as they age.
The average couple will spend $245,000 4 on healthcare in retirement
The average length of retirement in the U.S. is 18 years 2
Only 10% of older Americans have long-term care insurance 5
Families headed by people age 65–74 owe $65,686 in debt on average 3
1 Source: Campbell, Todd. “9 Baby Boomer Retirement Facts That Will Knock Your Socks Off.” The Motley Fool, 19 Mar. 2016, www.fool.com/investing/general/2016/03/19/9-baby-boomer-retirement-facts-that-will-knock-you.aspx. 2 Source: U.S. Census Bureau. 3 Source: Go Banking Rates. (2018) “The No. 1 Cause of Financial Stress in Every State.”
4 Source: Sandra Timmermann, “Shocks and Loss in Retirement: Preventing Despair, Promoting Resilience,” Journal of Financial Service Professionals 70, No. 5 (2016). 5 Source: Susan Hoover, “Long-Term Care Insurance (LTCI): The Good, the Bad, and the Ugly,” Enterprising Investor blog, CFA Institute, September 19, 2016.
1 | Retire More Freely
Rethinking Retirement Planning If you are like most people, retirement planning generally relies on assets such as 401(k)s, IRAs,
Home Equity as a Percent of Net Worth among Homeowners Age 65 and Above
traditional pensions, Social Security benefits, as well as regular taxable savings and investment accounts. But as a homeowner you have another, often overlooked, retirement planning asset: Home Equity . U.S. homeowners age 62+ have more than $7 trillion in home equity, 6 making it the largest asset for most households entering retirement. 7 For the average retiring couple, home equity makes up 70% of their net worth—with other assets like IRAs, savings and personal property only making up 30%. 8 With such a large proportion of personal wealth tied up in one’s home, it’s time to rethink how home equity can be used as another tool in your financial arsenal.
Home Equity 70%
NewWays to Access Home Equity Over the last 30 years, reverse mortgages have gained acceptance as part of strategic retirement planning. In fact, a growing number of respected retirement researchers, such as Harold Evensky, Dr. John Salter, Dr. Wade Pfau, and the Center for Retirement Research at Boston College have all conducted numerous studies to evaluate the pros and cons of reverse mortgages for the benefit of consumers. They have concluded that the reverse mortgage is an important option, with multiple uses that can often help older homeowners be better financially prepared in retirement, and avoid outliving their money. 9 “ Several recent research articles have demonstrated how responsible use of a reverse mortgage can
enhance an overall retirement-income plan…Reverse mortgages give responsible retirees the option to create liquidity for an otherwise illiquid asset, which can, in turn, potentially support a more efficient retirement-income strategy (more spending and/or more legacy). ” —Wade Pfau, Ph.D., CFA, “Reverse Mortgage Background and History” Forbes, September 12, 2018
6 Source: National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI). 7 Sass, Steven A., “Is Home Equity an Underutilized Retirement Asset?”, Center for Retirement Research at Boston College, Number 17-6, March 2017 8 US Census Bureau, “Wealth, Asset Ownership & Debt of Households Detailed Tables: 2015” 9 Salter, John., Evensky, Harold., & Pfeiffer, Shaun. (Aug 2012). Standby Reverse Mortgages: A Risk Management Tool for Retirement Distributions. Journal of Financial Planning, pg. 40. | Pfau, Wade. D. (2016) Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement. Retirement Researcher Media.
To learn more, call your local RMF loan specialist | 2
At Reverse Mortgage Funding LLC (RMF), we recognize that each of our customers is unique. That’s why we offer a full range of powerful, customized options to help you access your home equity and gain a new source of income tax-free funds.* We offer traditional Home Equity Conversion Mortgages (HECMs), as well as our own “private label” reverse mortgage called Equity Elite ® , which may provide certain advantages over a HECM.
Equity Elite ® from RMF
Home Equity ConversionMortgage (HECM)
Minimum age to qualify Non-recourse feature (You’ll never owe more than the home is worth when the loan is repaid) Maximum loan amount Limit on amount of proceeds you can take in the first 12 months Mortgage Insurance Premium fees
Less than $822,375
Up to $4 million ||
YES Upfront and ongoing
NO NONE More condos qualify: Community can be FHA-approved, Fannie Mae-approved or RMF-approved
FHA-approved ‡ condominium communities only
How is Equity Elite ® different? It’s specifically designed for:
60 is the new 62
Those seeking lower up-front cost s—Equity Elite ® has no up-front or ongoing mortgage insurance premium, which can mean lower closing costs than a traditional reverse mortgage**
Refinancing or buying a higher-value home —because it provides access to more loan proceeds than a HECM can
60 is the new 62
Condominium owners and buyers—because more condos qualify
60 is the n w 62
Borrowers as young as 60 † —younger than with a HECM
*Not tax advice. Consult a tax professional. † Not applicable in all states; some states may impose a higher age requirement. Visit www.reversefunding.com/equity-elite for details. ‡ 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 . § This down payment range assumes closing costs will be financed into the loan. **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. || Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details.
3 | Reinventing Retirement Funding
Using Equity Elite ® Proceeds from an Equity Elite ® reverse mortgage can be used in a variety of ways to help you improve your cash flow and gain more financial control. Here are some examples: n Refinance existing mortgage debt to dramatically reduce your monthly payments n Consolidate debts such as high-interest credit cards, auto loans, etc. to lower your monthly bills
n Buy a new home that better fits your needs n Pay for medical expenses & long-term care
As with any mortgage, you will have to meet your loan obligations: Keeping current with property taxes, insurance, and maintenance. Repaying the loan
Usually homeowners (or their heirs) choose to repay the loan balance—which includes any fees that have been added and accrued interest—through the sale of the home. You can also choose to repay the loan with other assets, or by refinancing through a traditional mortgage. As with any mortgage—forward or reverse —you must meet your borrower obligations throughout the life of the loan, including keeping current with property taxes, insurance, and maintenance of the property. In addition, the property must be your primary residence throughout duration of the loan. If any of these obligations are not met, the loan will become due and payable. Equity Elite ® for Home Purchase Many people don’t realize that you can also buy a house or condo with a reverse mortgage by combining a one-time investment of your own funds with Equity Elite ® loan proceeds to complete the transaction. The cash required typically ranges from only 55% to 75% of the purchase price, depending on your age. § Unlike a HECM, seller concessions of up to 6% are allowed for closing costs on the new property.
Equity Elite ® Zero has the benefits of our Equity Elite ® reverse mortgage but offers a lender credit to be applied towards most closing costs, and may have lower interest rates.**
To learn more, call your local RMF loan specialist | 4
Example: Meet Anne and Peter, age 70. Anne and Peter’s largest asset is their $5 million home. However, they still owe $500,000 on their existing mortgage, plus another $60,000 in credit card and auto loan debt. In addition, Peter recently suffered an illness and now needs to use a wheelchair. To stay in their home, they need to make $70,000 worth of modifications such as installing a ramp, a stairlift, and new bathrooms. They don’t want to drain their savings and are worried they won’t qualify for a traditional mortgage. Their daughter, Vanessa, encourages them to meet with their financial advisor to learn more about their options. Their financial advisor presents them with the following options: Option 1:
1 For illustrative purposes only. Estimates shown are based on a New Jersey property and a 15-Year Jumbo Refi—with 0 Points at a 3.375 % fixed rate (3.763%APR). Rates fromBankrate.com as of 7/30/2019. 2 For illustrative purposes only. Estimates shown are based on a New Jersey property and the Equity Elite ® product with a fixed rate of 6.925% (7.087%APR), as of 7/29/19. Recent interest rates offered by ReverseMortgage Funding range from5.747% to 7.974% annual percentage rate for fixed-rate loans. Closing costs may include an origination fee, third-party closing costs ranging from$2,131.98 to $35,014.17 depending on purchase price. Please contact ReverseMortgage Funding LLC (RMF) for details about credit costs and terms. 3 According to GNMA data for 2018. 4 Source: RMF customer satisfaction survey, January 2021 5 Source: Trustpilot, as of January 2021 6 Source: LendingTree Ratings and Reviews, as of January 2021 7 BBB rating, as of January 2021 8 RMF’s Customer for Life Commitment program is subject to change or cancellation at any time and without notice. Plus, it is generally easier to qualify for an Equity Elite ® loan, which has more lenient income qualifications than a traditional mortgage because it’s designed with the needs of retirees in mind. Most importantly, they do not have monthly principal and interest payments—which greatly improves their cash flow .* The Solution: Their financial advisor arranges for them to meet with an RMF reverse mortgage specialist. They decide to take out an Equity Elite ® reverse mortgage, because they like having the flexibility to no longer make monthly mortgage payments,* as well as the flexibility and peace of mind of having additional funds available if they need them. *As with any mortgage, they must meet their loan obligations, keeping current with property taxes, insurance, and maintenance. With a standard 15-year jumbo mortgage , 1 Anne and Peter would be able to refinance their first mortgage and take out $130,000 to consolidate other debt at a lower rate, as well as make the necessary additions to the house. However, they would be required to make a monthly principal and interest payment of $5,387 and they are unlikely to qualify for the loan because neither one of them is working . Option 2: Using an Equity Elite ® fixed-rate, lump-sum loan, 2 Anne and Peter can refinance the $500,000mortgage on their home and consolidate the $60,000 debt into the same loan, at a lower interest rate than their previous mortgage. They can also receive $1,716,773 in loan proceeds at closing, which they can use to pay for the home modifications and then have additional funds for any other situation that may arise.
5 | Reinventing Retirement Funding
Choose the experts at RMF A national leader, and your local reverse mortgage lender
4.8 out of 5 onLending Tree
Customer Satisfaction ★
At Reverse Mortgage Funding LLC (RMF), we are dedicated to helping older Americans live the retirement lifestyles that they imagined and deserve, in the comfort of their own homes. We’re proud to be one of the nation’s top reverse mortgage lenders. RMF services more than 73,000 reverse mortgage borrowers. As a direct lender, we also have certain pricing advantages—and we can pass the savings on to you. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; 4 a 4.7-star score on Trustpilot; 5 4.8 out of 5 stars on LendingTree; 6 and we’re accredited by the Better Business Bureau. 7
Our Customer for Life Commitment 8 means we’re with you every step of the way with personalized, ongoing service—from our first conversation on day one, throughout the entire loan process, and even after closing. We not only make loans, but after closing we also service all the loans we originate, and maintain long-term relationships with our customers. We’re committed to ensuring that your experience is optimal, and we’re here for our borrowers throughout the life of the loan.
CUSTOMER FOR LIFE Commitment
Part of the reason for these excellent ratings is that we do things differently than other lenders: We provide an experience that’s tailored to each individual. We know it can be difficult to understand over the phone what all your options are, and how the program actually works. So we will pair you with a local, licensed loan specialist who can come to your home (or another location of your choice) to sit down and talk with you, explain everything, answer all your questions, and give you straightforward guidance that’s based on your specific needs and concerns.
To learn more, call your local RMF loan specialist | 6
4.8 out of 5 onLending Tree
Customer Satisfaction ★
98% Customer Satisfaction rating as of January 2021. Better Business Bureau, January 2021. Trustpilot and LendingTree ratings as of January 2021. 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. 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 HUD, FHA’s HECM program or are seeking loan proceeds that are higher than HUD, 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. Charges such as an origination fee, mortgage insurance premiums, closing costs and/or servicing fees, if applicable, may be assessed and will be added to the loan balance. As long as you comply with the terms of the loan, you retain title until you sell or transfer the property, and, therefore, you are responsible for paying property taxes, insurance and maintenance. Failing to pay these amounts may cause the loan to become immediately due and/or subject the property to a tax lien, other encumbrance or foreclosure. The loan balance grows over time, and interest is added to that balance. Interest on a reverse mortgage is not deductible from your income tax until you repay all or part of the interest on the loan. Although the loan is non-recourse, at the maturity of the loan, the lender will have a claim against your property and you or your heirs may need to sell the property in order to repay the loan, or use other assets to repay the loan in order to retain the property. ©2021 Reverse Mortgage Funding LLC, 1455 Broad Street, 2nd Floor, Bloomfield, NJ 07003, 1-888-494-0882. Company NMLS ID: #1019941. For licensing information, go to: www.nmlsconsumeraccess.org. Arizona Mortgage Banker License #0927682; Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act; Loans made or arranged pursuant to a California Financing Law license; Georgia Mortgage Lender Licensee #36793; Massachusetts Mortgage Lender License #ML1019941; Licensed by the New Jersey Department of Banking & Insurance; Licensed Mortgage Banker-NYS Department of Financial Services-in-state branch address 700 Corporate Blvd, Newburgh, NY 12550; Rhode Island Licensed Lender. For California consumers: For information about our privacy practices, please visit https://www.reversefunding.com/privacy. Not all products and options are available in all states. Terms subject to change without notice. Certain conditions and fees apply. This is not a loan commitment. All loans subject to approval.
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