Create More Solutions for More Customers
Financial security in retirement— a growing concern
As a mortgage professional, you know firsthand that your older customers are facing rising healthcare costs, a volatile stock market, ongoing mortgage debt, and much more as they enter retirement. For many, their savings accounts, investment portfolios, and even government benefits will not be enough to sustain their changing needs and financial obligations as they age.
The estimated healthcare expenses that an average couple
The average length of retirement in the U.S. is 18 years*
will spend in retirement is $245,000 ‡
Families headed by people age 65–74 owe $65,686 in debt on average †
Only 10% of older Americans have long-term care insurance ||
A new way for customers to access home equity For years, traditional reverse mortgages or Home Equity Conversion Mortgages (HECMs) opened the door for older homeowners to access the valuable equity they’d built up over time. And even though HECMs have steadily gained acceptance by financial professionals in all arenas—due to increased borrower protections and extensive academic research— they can still present limitations for some of your older customers. At Reverse Mortgage Funding LLC (RMF), we recognized the gaps in the current HECM program and the constraints on who can access a reverse mortgage and how much they can borrow. So we created our own private label product— Equity Elite ® —to help consumers create more viable liquidity options in retirement. Equity Elite ® is specifically designed to give you additional strategic planning options that you can offer your mass affluent and high-net-worth customers who wish to incorporate home equity into their holistic financial plans.
*Source: U.S. Census Bureau. † Source: Go Banking Rates. (2018) “The No. 1 Cause of Financial Stress in Every State.”
‡ Source: Sandra Timmermann, “Shocks and Loss in Retirement: Preventing Despair, Promoting Resilience,” Journal of Financial Service Professionals 70, No. 5 (2016). || Source: Susan Hoover, “Long-Term Care Insurance (LTCI): The Good, the Bad, and the Ugly,” Enterprising Investor blog, CFA Institute, September 19, 2016.
1 | Create More Options for More Customers with Equity Elite ®
reverse mortgage The HECM program has continued to evolve for the better since its federal* inception in 1989. And even though it has provided access to income-tax-free funds † for over one million Americans, there are still many more for whom a HECMwasn’t and still isn’t a practical, or even possible, choice. But with Equity Elite ® , your customers can tap into their home equity with fewer restrictions than a HECM, and enjoy just as much financial freedom, if not more. What sets Equity Elite ® apart?
n 60 is the new 62: Unlike the HECM, Equity Elite ® is available to homeowners as young as age 60 ‡ n Higher access to funds : The current HECM lending limit is less than $765,600. But Equity Elite ® borrowers can access up to $4 million || in home equity—so it can be more suitable for those with higher-valued homes n Lower up-front costs : Equity Elite ® has no up-front or ongoing mortgage insurance premium, which can mean lower closing costs than a traditional reverse mortgage n Equity Elite ® ZERO : A sister product that offers all of the benefits of Equity Elite ® but eliminates almost ALL closing costs and has potentially lower interest rates # n More condos qualify : In contrast to HECMs, Equity Elite ® is available to owners and buyers of non- FHA-approved*condos, which expands customer eligibility n Debt consolidation : Borrowers can pay obligations (not just liens on their property) to qualify or to consolidate debt
*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. † 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. || Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details. # 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.
Improve your customers’ cash flow with Equity Elite ®
Like a HECM, Equity Elite ® does not require monthly principal or interest payments as long as the loan obligations are met.* So borrowers can tap into a new source of funds without burdening their cash flow.
Proceeds from the loan can be used for: n Refinancing an existing mortgage(s) n Buying a new home or renovating an existing one n Paying for medical expenses, in-home care services and/or long-term care n Philanthropy and gifting n Consolidating debts such as high-interest credit cards, auto loans, etc.
We’ve Expanded Your Customers’ Eligibility
Age 60 † or older Plans to live in the home as the primary residence Able and willing to pay for property taxes, homeowners insurance, and maintenance Sufficient home equity
Single-family homes Condominiums that are FHA, ‡ Fannie Mae or RMF-approved Planned Unit Developments (PUDs) Two to four-family homes—must be owner-occupied, with prior landlord experience only
*As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance. † 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 .
3 | Create More Options for More Customers with Equity Elite ®
For example: Meet Heather, age 70.
Recently widowed, Heather’s largest asset is her $3 million home. However, she still owes $50,000 on her existing mortgage, plus another $60,000 in credit card and auto loan debt.
Heather wants to remain in her home, but is worried that she will be unable to pay down her debts while saving enough money to fund any long-term healthcare that she may need in the future. She has already begun to withdraw funds from her retirement portfolio each month to make ends meet, and her financial concerns are steadily growing. Her daughter Vanessa encourages her to learn more about reverse mortgages and try to consolidate her debt.
Which reverse mortgage would you recommend to Heather?
Equity Elite ® Home Value: $3 million Principal Limit: $1,152,000 † Closing Costs: $4,004 ‡
HECM Home Value: $3 million Principal Limit: $337,834 * Closing Costs: $24,235 ‡
The Facts: Both a HECM and Equity Elite ® will allow Heather to consolidate her debt and gain additional income-tax-free funds || . However, the current loan limit of the HECM program—$765,600—only permits her to draw funds on a fraction of what her home is worth. Equity Elite ® gives Heather the opportunity to borrow funds based off of her home’s full appraisal value, resulting in almost 3.5x more in principal funds. Plus, the closing costs on the Equity Elite ® loan are $20k less than the HECM fees —meaning she won’t have to tap into her IRA to cover the costs, which would trigger yet another taxable event. || *Estimates shown are based on a California property and the HECM Fixed 5.060% as of 6/25/2019. Recent interest rates offered by Reverse Mortgage Funding range from 4.392% to 6.017% Annual Percentage Rate for Variable rate loans. Closing costs may include an origination fee, third-party closing costs ranging from $1.00 to $41,305.76 depending on purchase price, and an FHA Mortgage Insurance Premium ranging from $0.00 to $15,903.75 depending on purchase price. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms. † Estimates shown are based on a California property and the Equity Elite ® Fixed 6.300% as of 6/25/2019. Recent interest rates offered by Reverse Mortgage Funding range from 5.747% 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 Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms. ‡ These amounts do not include any fees or costs that the borrower has paid before closing. || Not tax advice. Consult a tax professional.
Chances are you have encountered customers who were eligible for and interested in a reverse mortgage but balked at the very mention of the up-front and ongoing costs associated with a HECM. That’s why we created Equity Elite ® ZERO. The ZERO reverse mortgage eliminates almost all closing costs through lender credits, and may have lower interest rates.* Equity Elite ® ZERO—a new choice for cost averse customers
Which reverse mortgage is right for your customers?
Equity Elite ®
Minimum age to qualify Limit on amount of proceeds that can be taken in the first 12 months Non-recourse feature Amount that can be borrowed Mortgage Insurance Premium cost
NO YES Up to $4 million || NONE FHA, Fannie Mae or RMF-approved
Less than $765,600 Up-front and ongoing
FHA-approved ‡ only
*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; 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. || Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details.
5 | Create More Options for More Customers with Equity Elite ®
Take the next step: Educate your eligible customers on all of the new options available to them with Equity Elite ®
To learn more, call me today: DANIEL GLEADLE 858.414.4784 email@example.com
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Customer Satisfaction ★
Thismaterialhasnotbeen reviewed,approvedor issuedbyHUD,FHAoranygovernmentagency.Thecompany isnotaffiliatedwithoractingonbehalfoforat thedirectionofHUD/FHAoranyothergovernmentagency. 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. ©2020 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; Licensed by the Department of Business Oversight 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; Texas Mortgage Banker Registration in-state branch address 6044 Gateway East, Suite 236, El Paso, TX 79905. 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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