Reverse Mortgage Loan from GNC Capital
We are taught from an early age to plan our finances with the right strategy in mind to set up a golden nest egg. When the next chapter in life approaches, you start to think “Did I plan accordingly to save enough?” Now may be the time to take a second look at your current assets to see if it will sustain the road ahead. A reverse mortgage loan with GNC Capital may be a great resource in planning out your retirement to give you a peace of mind with security.
A reverse mortgage was created with the idea of establishing a level of protection for seniors, age 62 and older, to access their home’s equity to help fund all the necessities during retirement. With thousands of baby boomers becoming of age, the advantages of this product allow the proceeds to be excluded from personal income taxation while maintaining title and ownership of the home so long as they comply with the terms of the loan.
It is recommended that borrowers seek tax advice on how the proceeds may affect government needs-based programs such as Medi-Cal and Medicaid.
How the Loan Works
There are many options to consider before deciding whether a reverse mortgage or a HECM (Home Equity Conversion Mortgage) is right for you. After speaking with one of our specialists at GNC Capital, you will need to meet a HECM counselor to discuss the full inner workings of the loan. Upon the completion of HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs.
There are borrower and property eligibility requirements that must be met for loan consideration. The following breaks down the requirements and what potential options are available to you.
- Borrower must be 62 years of age and older
- Borrower must own the property outright or paid-down a considerable amount
- Property to be occupied as a primary residence
- Cannot be delinquent on any federal debt
- Have financial resources to pay for property taxes, insurance, and Homeowner Association fees, etc.
- Participate in a session with HUD-approved HECM counselor
- All eligible properties must meet all FHA property standards and flood requirements
- Property type allowed is Single Family Residence or 2 – 4 unit home
- Condominium projects must be HUD-approved
- Manufactured homes must meet FHA requirements
- Verification of income, assets, monthly living expenses, and credit history
- Verification of timely payments of real estate taxes, hazard insurance, and flood insurance premiums
The following payment plans are available as adjustable interest rate mortgages:
- Tenure: Equal monthly payments can be scheduled if at least one borrower survives and continues to occupy property as a primary residence.
- Term: Equal monthly payments can be scheduled for a fixed period of months selected.
- Line of Credit: Unscheduled payments or installments can be extended in an amount of your choosing until the line of credit is exhausted.
- Modified Tenure: A combination of line of credit and scheduled monthly payments will be extended for as long as you remain in the home.
- Modified Term: A combination of line of credit plus monthly payments for a fixed period of months can be selected by the borrower.
For fixed rate mortgages, you will receive the Single Disbursement Lump Sum payment plan.
Mortgage Amount Determined By
The amount you may be eligible to borrower will depend on:
- Age of the youngest borrower or eligible non-borrowing spouse
- Current interest-rate available; and
- Lesser of appraised value or the HECM Lending Limit has increased to $636,150 for 2017
If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you can borrow.
Associated Costs for a Reverse Mortgage
You can pay for most of the costs of a HECM by financing them and having them paid from the proceeds of the loan. By financing the costs, you will have to pay less out of pocket compared to paying for them yourself. Please keep in mind, financing the costs reduces the net loan amount available to you.
A reverse mortgage loan includes several fees and charges, which includes:
- Mortgage Insurance Premium (Initial & Annual)
- Third Party Charges
- Origination Fee
- Servicing Fees
You will be charged an initial mortgage insurance premium (MIP) at closing. The initial MIP will be .50% or 2.50%, depending on the disbursement amount chosen. Over the life of the loan, you will be charged an annual MIP that equals 1.25% of the outstanding mortgage balance.
**These materials are not from HUD or FHA and were not approved by HUD or a government agency.
Got questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions and get you started with a great low rate on your jumbo loan today!
Tailoring Your Goals Through Seamless Financing
- Providing Quality Service through Education, GNC Capital will empower you with knowledge to make the best mortgage decisions.
- Through GNC Capital, you will enjoy the experience of having loan options tailored specifically for your financial needs.