Reverse Mortgage Basics
In general, a reverse mortgage:
    • Is a loan to homeowners, 62 years of age and
      over secured by their property
    • Requires no repayment from the client as long as
      they live in the home
    • Provides tax free income that can be used for any purpose
    • Is paid out as a lump sum, line of credit, monthly payments,
      or any combination (The Line of Credit is not available in Texas)
    • Can have a fixed or variable interest rate
    • Has no income or credit requirements
    • Is available for homes that are fully paid-for or encumbered
      by a current mortgage
    • Will not affect Social Security or Medicare payments
    • Leaves title in the name of the borrowers
    • Is most commonly backed and insured by the federal
      government through HUD/FHA
    • Is an extremely versatile retirement planning tool

A reverse mortgage enables your clients to convert part of the equity in their
homes into tax-free income without having to sell the home, give up title, or take on
a new monthly mortgage payment. There are no credit or income qualifications
associated with any reverse mortgage product and a reverse mortgage does not
affect regular Social Security or Medicare benefits.

Your clients can choose to receive proceeds from a reverse mortgage as a lump
sum, monthly tenure (or lifetime) payment plan, monthly payments over a specified
term, as a line of credit, or a combination of these.

The amount of money your clients may receive depends upon their age, or the
age of youngest borrower in the case of couples, the appraised home value (up to
the local lending limit for HUD/FHA or Fannie Mae programs) and the Expected
Interest Rate (equal to a specific index such as the 10-year T-Bill rate or the
LIBOR plus a margin) for variable rate products.

Eligible property types include single-family homes, manufactured homes (built
after June 15, 1976), condominiums and town homes. Duplexes, triplexes and four-
plexes are also eligible provided that the borrower owns the entire property and
lives in one of the units. The other units may be rented out.

The proceeds from a reverse mortgage can be used for any purpose.
    • Cash Flow Relief
    • Creating income through insurance-based planning or limited-risk strategies
    • Creating income through a lifetime payment plan
    • Eliminating a mortgage payment or other debts
    • Retirement Planning – Not outliving your assets
    • Investing
    • Long-term Care Planning
    • Medical Expenses
    • In-home Care
    • Covering Unexpected Expenses
    • Home Repair or Remodeling
    • Home Retrofitting for a Disabled Family Member
    • Major purchases like a car or RV
    • Helping Family Members
    • Additional Education or Training
    • Travel and Leisure
    • Charitable Giving
    • Supplement retirement income to cover daily living expenses,
       repair or modify the home (i.e., widening halls or installing a ramp), pay
       for health care, retire existing debts, buy a new car, take a "dream"
       vacation, pay for grandchildren’s college, pay property taxes,
       or prevent foreclosure.

Borrowers with an existing mortgage may qualify for a reverse mortgage. However,
the reverse mortgage must be in a first lien position, so any existing mortgage
must be paid off.

Counseling by an independent third-party is required for all borrowers undertaking
a reverse mortgage as a consumer protection. Counseling may be conducted face-
to-face or by telephone.

No payments are due on a reverse mortgage throughout the life of the loan. It is
repaid when all of the borrowers pass away, sell the home, or permanently move
out. The amount owed can never exceed the value of the home and excess
proceeds from the liquidation of the property pass to the estate. Heirs may choose
to sell the property or refinance in order to retire the reverse mortgage debt.

Reverse Mortgage Benefits
    • Cash received is Non-Taxable
    • Strengthens borrower's financial position by increasing cash flow
    • No more mortgage payments
    • Credit lines for emergencies and unexpected expenses
    • Home repairs and improvements
    • Obtain better life and health insurance plans, long-term care
    • Vacations and Leisure are now a reality

A safe, proven choice
A HECM reverse mortgage is a government-protected financial tool that has
helped over 150,000 seniors enjoy better lives. Many safeguards are built into the
program to protect seniors from predatory lending practices.

The best of both worlds
A reverse mortgage can be the right choice for senior homeowners who need
additional income without having to sell their homes to raise cash. With a reverse
mortgage, the homeowner can get a monthly payment, a line of credit or a lump
sum distribution without having to move or give up title to the home.

Ideal liquidity tool
A reverse mortgage is an ideal way to create liquidity from a real estate asset. This
liquidity can enable seniors to pay bills, make home repairs, retire an existing
mortgage, or to purchase such health-related services as long-term care
insurance.

Tax-free* money
Since a reverse mortgage taps into existing home equity, the proceeds are not
taxed as income.
* Consult Tax Advisor

Reverse Mortgage Loan Options
WealthBridge offers several flexible reverse mortgage products that can be
customized to meet your client's financial needs and objectives. Their qualified
representatives will work with you and your client to help you make the right
decision and choose the reverse mortgage product that best suits your needs.

FHA - HECM (Home Equity Conversion Mortgage)
The HECM is, by far the most popular program, representing about 95% of all
Reverse Mortgage originations in the US. This plan provides either cash, a line of
credit*, monthly income or any combination of the three as long as the borrower
qualifies. Most seniors enjoy the flexibility that this plan offers.

Features and Benefits:
    • Maximum Lending Limit - can reach $362,790 depending on the
      geographic area (adjusts annually)
    • Government Insured Program
    • Available to homeowners 62 and older
    • Flexible Income Payment Option*
    • Available balance on line of credit grows annually
    • Loan origination and closing costs may be financed by the loan
    • Free counseling by an approved outside third party, a program requirement
    • Social Security or Medicare eligibility may not be affected, and generally
      neither are SSI or Medicaid/MediCal (Suggest borrowers consult the Social
    • Security Administration and a tax professional)
    • No income qualifications
    • Use of loan proceeds not restricted
    • Loan proceeds are tax free
*Some products and options may not be available in all states.

Home Keeper by Fannie Mae
This program allows for a larger maximum lending limit than the HECM and is
largely used with CO-OP properties in certain states. This plan provides cash, a
line of credit* or monthly income or any combination of all three as long as the
borrower qualifies.

Features and Benefits:
    • Maximum Lending Limit: $417,000 (may adjust annually)
    • Government Sponsored Enterprise Program
    • Available to homeowners 62 and older
    • Flexible Income Payment Option*
    • Loan origination and closing costs may be financed by the loan
    • Free counseling by an approved outside third party, a program requirement.
    • Social Security or Medicare eligibility may not be affected, and
      generally neither are SSI or Medicaid/MediCal
    • No income qualifications
    • Use of loan proceeds not restricted
    • Loan proceeds are tax free
*Not all products and options available in all states

Potential Reverse Mortgage Clients – What to Look for
Some of the indicators that a potential client may be a good candidate for a
reverse mortgage are:
    • They are 62 years old or older
    • They have no current mortgage or a relatively low mortgage balance
    • They have a current reverse mortgage
    • They have a high home value
    • They can not afford a new or existing mortgage payment
    • They need more income
    • They have poor credit and/or low income
    • They want to plan for retirement
    • They have expenses they can not afford such as medical or
       home repair expenses
    • Wife recently lost her husband
    • They want to stay in their home but are considering selling
    • They want to invest
    • They have lost money in the stock market

A key to expanding the scope of your business - Encourage your clients to
investigate mortgage planning as a possible way to enhance their
financial security.

What is Mortgage Planning?