REVERSE MORTGAGES
OF
FLORIDA
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We are pleased that you have shown an interest in the reverse mortgage programs that are available in the State of Florida.
We have been doing reverse mortgages since 1991 and have been working in the State of Florida since 1997. We take pride in working hard to educate the public not only about reverse mortgages, but also about other programs that are available to our senior community. If a reverse mortgage isn't the answer for you, we always hope to be able to make good suggestions on other avenues to pursue.
Below please find some simple reading material about the most popular reverse mortgage program, known as the Home Equity Conversion Mortgage (HECM). This is a government-insured loan that offers the lowest interest rates and loans the highest percentage of the home value. For homes with greater value, we have other programs that work similarly, are still insured, but are not part of the HUD program.
Please read the information below carefully; jot down any questions you may have, and call our toll free number. At that time, we will answer your questions and get the information we need from you to determine how much money you may be eligible for under a reverse mortgage. Should you decide you would like to get a Reverse Mortgage, we will have our local representative in your area give you a call. We take all applications and conduct all closings in your home, so there is no need to travel.
Enjoy your reading and we hope to hear from you soon!
Sincerely, Cynthia J. Merrifield Florida Branch Manager Reverse Mortgage Specialist Certified Senior Advisor
HOME EQUITY CONVERSION MORTGAGE (HECM)
What is a HECM? A HECM is a special, government-insured mortgage that enables homeowners 62 years or older to borrower against the equity in their home. Unlike other loans, no repayment of the loan is required as long as you occupy the home as your primary residence.
The funds you borrow can be received according to the payment plan of your choice. Since your financial needs may change over time, you are permitted to change your payment plan as often as necessary to meet those financial needs. The many options available are explained on the following pages.
When you no longer occupy the home as your primary residence, the amount you have borrowed, plus accrued interest is due and payable. You or your heirs have the option of selling the home, paying back the mortgage and keeping the remaining proceeds from the sale or keeping the home and repaying the mortgage.
Who is eligible for a HECM? You must be at least 62 years old and either have a mortgage-free home or a very low outstanding mortgage balance that can be paid off at loan closing. The home must be your principal residence. Your home must be a single-family or two-to-four-unit dwelling. Some condominiums are also eligible. You also must agree to receive mortgage counseling from a HUD-approved counseling agency.
How can I benefit from a reverse mortgage?
How much can I borrow? The amount you can borrow is based on the age of the youngest borrower, the current interest rate, and the maximum claim amount. The maximum claim amount is the lesser of the appraised value of your house or the maximum amount allowable for FHA insuring in your area. The maximum mortgage amount insured by FHA varies by geographic area. In the State of Florida most counties have a maximum claim amount of $172,632. Your lender can tell you your county limit.
What types of payment plans are available with the HECM loan? Tenure - Receive equal monthly payments for as long as you occupy your home as your primary residence. Term - Receive equal monthly payments for the fixed period of time that you select. Line of Credit – Make draws as needed from the amount you are approved for at closing. Modified Tenure Plan – Set aside a portion of your loan proceeds as a line of credit and receive the rest in the form of equal monthly payments as long as you occupy your home as a primary residence. Modified Term Plan - Set aside a portion of your loan proceeds in a line of credit and receive the balance in equal monthly payments for a fixed time period as specified by you.
You will not be required to repay the loan as long as you occupy the home as your primary residence, pay your real estate taxes, pay your homeowner's insurance, and keep your home in good repair, regardless of which payment plan you select.
How will the amount of the monthly payment be calculated? The amount you can receive in monthly payments depends on the age of the youngest borrower, the interest rate and the maximum claim amount. The older you are, the larger your payments are likely to be.
Following are examples showing monthly payments available under the tenure option assuming a 6.5% interest rate, financing of all closing costs and a monthly servicing fee of $25.
Maximum Claim Amount Age $50,000 $100,000 $150,000 65 $115 $270 $425 70 140 315 500 75 165 375 590 80 210 460 720
Will HECM payments affect my Social Security, Medicare, Supplemental Security Income (SSI) or Medicaid benefits? HECM payments do not affect your Social Security or Medicare benefits. In addition, in the State of Florida, HECM payments will not affect SSI or Medicaid benefits if you set up your payment plan to assure the money you receive is used during the month you receive it.
What does it cost to get a HECM? You will have to pay an origination fee, other closings costs and a mortgage insurance premium. The mortgage insurance premium includes an up front premium of 2% of the maximum claim amount, and an annual fee of ½% per year on your mortgage balance. All fees can be financed in the mortgage so that you have no out-of-pocket expenses. In addition, a servicing fee is added to your loan balance monthly. This fee pays for administering your account.
What happens if the amount I owe on the loan exceeds the value of my home? If the total of the payments you receive plus interest and mortgage insurance premiums exceeds the value of your home at the time the loan is repaid, the FHA insurance must pay the difference to the lender. This is called the non-recourse limit, which means that the homeowner or their heirs will never be liable for any payments above and beyond the home's value at the time the reverse mortgage is repaid.
Will my heirs owe anything to the mortgage lender if I die? Upon your death, the loan balance, consisting of payments made to you or on your behalf plus accrued interest, becomes due and payable. Your heirs have the choice of selling the home to repay the loan or by paying it off themselves if they would like to keep the home. If the loan balance exceeds the value of your property, your heirs will owe no more than the value of the property. FHA insurance covers any additional balance due the lender. If the home sells for more than the balance on the loan, you or your heirs keep the remaining proceeds from the sale of the home.
How can I apply for a HECM? Call Cindy Merrifield, at Reverse Mortgages of Florida and ask her to help you decide whether a Reverse Mortgage is a good option for you. Cindy has been doing reverse mortgages since 1991, and she is a Certified Senior Advisor. She will come to your home, go over your specific needs and make a recommendation based on your personal needs.
Cindy Merrifield Reverse Mortgages of Florida A DBA of Seattle Mortgage Company (321) 633-0868 - Brevard (888) 435-7353 – Toll Free ASSISTING SENIORS IN MAKING INFORMED DECISIONS
Reverse Mortgages of Florida in Rockledge is the Florida State Branch Office for Seattle Mortgage Co. Seattle Mortgage is the second largest originator and servicer of reverse mortgages in the United States.
HECM AND HOMEKEEPER APPLICATION CHECKLIST
TO ASSIST US IN PROCESSING YOUR APPLICATION AS QUICKLY AS POSSIBLE, PLEASE HAVE THE FOLLOWING AVAILABLE AT THE TIME OF APPLICATION.
______ CERTIFICATE OF COUNSELING – ORIGINAL
______ SOCIAL SECURITY CARD – COPY – 2 COPIES
______ PHOTO ID AND PROOF OF AGE (DRIVERS LICENSE, PASSPORT) – 2 COPIES
______ DEED TO YOUR PROPERTY – COPY
______ DEATH CERTIFICATE IF ONE SPOUSE DECEASED – ORIGINAL OR CERTIFIED COPY
______ DECLARATION PAGE OF MOST RECENT HOMEOWNERS POLICY – COPY
______ VOIDED CHECK – FOR WIRE TRANSFERS TO YOUR ACCOUNT
______ CURRENT TITLE POLICY OR POLICIES
______ SURVEY – ORIGINAL LESS THAN TEN YEARS OLD IF AVAILABLE
______ APPROXIMATE BALANCE FOR CHECKING, SAVINGS AND INVESTMENTS
______ NAME, ACCOUNT NUMBER AND PHONE NUMBER FOR ALL MORTGAGES OR LIENS AGAINST YOUR PROPERTY (THIS INCLUDES LINE OF CREDIT)
______ NAME, ADDRESS AND PHONE NUMBER OF NEAREST RELATIVE OR EMERGENCY CONTACT
_________________________________________ _________________________________________ _________________________________________
_______ COPY OF TRUST (WITH ATTORNEY’S LETTER), POA, ETC.
_______ HOMEOWNER’S ASSOCIATION OR MANAGEMENT COMPANY’S NAME, CONTACT AND CONTACT’S PHONE NUMBER
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