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Sara A. Cornwall
2507 Post Road, Southport CT 06890 Phone: 203-319-5014
1. Consult a tax advisor
What is a reverse mortgage
It’s a home loan that enables you to convert a
portion of your home equity into tax-free funds
without having to sell your home, give up title, or
take on a new monthly payment.
1Instead of making monthly mortgage payments,
How a reverse differs from a traditional mortgage
With a traditional mortgage or home equity loan
- Homeowners qualify based on their credit history and debt-to-income ratio. They borrow money which requires making monthly payments.
With a reverse mortgage –
Your mortgage makes payments to you and there are no income, employment or credit score qualifying restrictions.2
Why get a reverse mortgage
A reverse mortgage can give you access to your home’s equity without the burden of monthly payments
Reverse mortgage proceeds may be used for any purpose, including:
Eliminating your existing mortgage Meeting daily or monthly expenses Covering healthcare expenses
Remodeling or home repairs Reducing credit card debt
How the loan proceeds are disbursed
You have several options to receive your reverse mortgage proceeds, they are available to you in the following distribution options:
Lump Sum — A specific amount is made immediately available (often used to pay off an existing mortgage).
Term — Funds are released in fixed monthly amounts for a set period requested by the customer.
Tenure — Funds are distributed in equal monthly allotments for as long as at least one homeowner continues to occupy the home as a principal
residence.
Line Of Credit — Funds remain available for the customer to draw on as needed or in automatic monthly disbursements.
Three essential facts
As long as all program requirements are met:
1. You retain the title to the property and continue to own your home.
2. Instead of making mortgage payments, you can have a mortgage that pays you.
3. You cannot owe more than the value of the home.
Program requirements include but are not limited to:
One of the borrowers continuing to live in the house Keeping the taxes and insurance current
Maintaining the property according to FHA standards
Age and eligibility requirements
You and any co-owners must be at least 62 years old
Your home must be your primary residence
You must own your home free and clear, or the
existing mortgage must be paid off with the loan
proceeds
How much can I borrow
The amount that can be borrowed is determined by
a HUD formula that is based on the following
factors:
The age of the youngest homeowner
The appraised value of the home
The current interest rate
What are the interest rate options
Wells Fargo offers both fixed- and variable-rate
reverse mortgages.
With a fixed-rate reverse mortgage, your interest rate will remain the same through out the life of the loan
With a variable-rate reverse mortgage, the interest rate may adjust at predetermined periods.
In most variable-rate cases, you may choose monthly or annual rate adjustments.
The frequency by which your interest rate adjusts – monthly or annually - will not affect the number of loan advances you
The costs involved with a reverse mortgage
A deposit for the appraisal is required to be paid at
the time of application.
There are additional closing costs which may be
financed into the loan such as:
Origination fee Title insurance
Mortgage insurance premium Attorney fees
Reverse mortgage repayment
You do not need to repay the loan as long as the program requirements are met, including:
You or one of the borrowers continue to live in the house
You keep the property taxes and homeowners insurance current You maintain the property to FHA standards
The balance due can come from home sale proceeds, or from other resources such as, savings, insurance or possibly
applying for a new mortgage. There is no requirement that the home be sold, only that the loan be repaid.
The reverse mortgage loan process
1. Discuss your post-retirement home financing goals with a reverse mortgage consultant.
2. Receive consumer counseling from a HUD-approved counselor.
3. Meet with a Wells Fargo Reverse Mortgage Consultant to apply for your loan.
Fill out an application
Select a payment plan
Present required documentation
4. Underwriting and loan decisioning process.
5. Upon approval, a closing is scheduled. Initial interest rate will be set the week of closing.
Frequently asked questions
Who owns the home?
You do. You retain the title and ownership of your home. The bank does not own your home.
Can the bank take my home?
No, as long you continue to occupy the home as your primary residence, pay the appropriate taxes and
insurance, and maintain upkeep of your home.3
Frequently asked questions
Are there restrictions on how I can use my
Reverse Mortgage proceeds?
No. It’s your money to use as you see fit. Some common uses include:
Eliminating your existing mortgage Meeting daily or monthly expenses Covering healthcare expenses
Frequently asked questions
Will receiving my reverse mortgage proceeds in
monthly payments affect my Social Security or
Medicare benefits?
Frequently asked questions
What if I decide to sell my home?
You always retain title to your home during the period of your Reverse Mortgage loan. You can sell your home at anytime and pay off the reverse mortgage with the
Well established.
Well respected.
Wells Fargo.
Wells Fargo Home Mortgage is the nation’s leading retail originator of reverse mortgages.
Wells Fargo & Company is a diversified financial services
company with 276,000 team members who provide banking, insurance, investments, mortgage and consumer finance for more than 48 million customers.
All program requirements must be met. The information in this presentation is accurate as of the date of printing and is subject to change without notice. Wells Fargo Home Mortgage a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All Rights Reserved. #102107 5/09
