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TAPPING LAZY EQUITY FOR WEALTH PRESERVATION

TAPPING LAZY EQUITY FOR WEALTH PRESERVATION. CRISSY NMLS# 447937 REVERSE MORTGAGE SPECIALIST First Bank C FL 352-322-1925 S FL 954-290-1243. Distribution of Loan Funds. How is a Reverse Mortgage Different?. Loan Based on 3 Qualifiers. Age of Occupant Owner(s) (youngest borrower 62+)

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TAPPING LAZY EQUITY FOR WEALTH PRESERVATION

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  1. TAPPING LAZY EQUITYFOR WEALTH PRESERVATION CRISSY NMLS# 447937 REVERSE MORTGAGE SPECIALIST First Bank C FL 352-322-1925 S FL 954-290-1243

  2. Distribution of Loan Funds How is a Reverse Mortgage Different? Loan Based on 3 Qualifiers Age of Occupant Owner(s) (youngest borrower 62+) Value of the House (lesser of appraised value or $625.5k) ~ American Recovery & Reinvestment Act of 2009 Current Interest Rates (lower rates provide higher loan) Lump Sum (single amount paid at closing) Stream of Income (paid from lender monthly) Equity Line of Credit (available as needed via checkbook) or any combination of these three…

  3. Advantages of the Reverse Mortgage • NO Income Qualifications • NO Credit Qualifications • NO Monthly Mortgage Payments Required • Proceeds are Tax Free • Proceeds due not affect Social Security & Medicare Benefits* • Closing Costs can be Financed • Interest may be Tax Deductible at time of loan repayment* • FHA & FNM Guarantee Payments, Owner Occupancy and Can Never Owe More than House is Worth *always consult a tax professional

  4. Scenario #1 Creating Wealth • Age: 75 • Home value: $375,000 • Investment assets: $300,000 • Reverse mortgage proceeds: $200,000 • Action: Single premium payment life insurance ($150,000), $1,500,000 benefit • Preserved other assets, has $50,000 reserve (gave gifts to grand children, college fund); created potential $1.5MM for heirs.

  5. Scenario #2 Emergency Fund • Age: 65 • Home value: $625,500 • Reverse mortgage proceeds: $316,000 • Investment assets; $275,000 • Premium investment: $150,000 (life insurance with LTC) • Emergency fund of $166,000 available in a LOC that grows 4% a year.

  6. Scenario #3 • Age: 75 • Home value: $450,000 • Reverse mortgage proceeds $241,000 • Other assets: $300,000 liquid • Client desired to purchase winter home in Florida. Needs $230,000. Does not want to have a monthly payment; considering paying “cash” and wants to tap investment account. • Solution: Use reverse mortgage proceeds to pay cash for the property, has no monthly payment, does not touch investment account, has zero tax-liability, assets continue to work for the client.

  7. Scenario #4 Liquidity • Age 70 • Home value $400,000 • Investment assets: $375,000 • Amount available: $212,000 • The $212,000 is available as a line of credit that grows approximately 4% a year. All distributions are tax free. • This LOC can be used as an emergency fund, preventing liquidation of assets and avoiding tax consequences.

  8. Information Needed to Calculate Proceeds • Ages of borrowers • Estimated value of property • Amount of liens • Zip code

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