Page 3 - AAG047_Rethink Reverse Brochure

What is a reverse mortgage? How can it
A reverse mortgage loan is designed for homeowners 62 and

over to unlock a portion of the equity in their home by turning be used for
it into tax-free* cash with no monthly mortgage payments**. retirement
*Consult your tax advisor. **Borrower must continue to security?
pay for property taxes, homeowner’s insurance, and home
maintenance costs.
3 Replace cash reserves

How could a reverse mortgage help your client with 3 Eliminate monthly mortgage
their retirement portfolio? payments** for borrowers
A reverse mortgage provides a potentially inexpensive, easy- and help to increase cash

to-qualify, tax-free*, liquid cash reserve for various uses. flow

3 Delay drawing Social

How much does a reverse mortgage cost? Security payments and
Much like traditional mortgages, there are costs associated pension payouts
with originating the loan. Borrowers are charged an origination
fee, a mortgage insurance premium (MIP), an appraisal fee 3 Loan Proceeds are not
as well as standard closing costs. The great news is that considered income and
some of these fees can be capped and financed with the loan can be used as a tax-free
proceeds. income supplement*

3 Buffer spending of
investments in a down
market

3 Cover unexpected gaps in
medical coverage, including
What are the qualifications? long-term or nursing care

3 The youngest borrower on title must be 62 years 3 Provide a new way to

of age or older. A non-borrowing spouse may be diversify wealth
under 62. 3 Use a HECM for purchase

3 The home must be the borrower’s primary to allow a client to purchase

residence. a new home and save the

3 The home equity must exceed 40% in most cases, residual cash for other
depending upon the borrower’s age. investments

3 The borrowers will undergo a financial review 3 Enhance financial security

to ensure they are able to comply with the loan without affecting some
terms. benefits such as Social
Security or Medicare

aag.com 8 3