HECM The 4 th Leg of Retirement Planning 1

A HECM by any other name HECMs = 99% of “Reverse Mortgages ” Benefits of FHA-Insurance Line of Credit Growth Crossover Risk Nonrecourse Protection Home Equity Conversion Mortgage FHA-Insured 2

HECM Line of Credit: $252, year-old Client with $500,000 Home NOTEWORTHY: Line grows EVEN if Home Value goes to $0. Line is still in-force if one spouse passes. 3

Line growth?NoYes Cancelable?YesNo Requires repayment?YesNo Age restriction?None62 HECM LOC vs. HELOC HELOC HECM LOC 4

HECM Monthly Payment: $1, year-old Client with $500,000 Home NOTEWORTHY: Payments continue EVEN if Home Value goes to $0. Payments continue even if one spouse passes; provided survivor lives in home, pays taxes and insurance and maintains the home. 5

HECM TERM Payment: $1,500/month for 4 years + Credit Line of $184,686 that will grow 62 year-old Client with $500,000 Home NOTEWORTHY: Payments continue EVEN if Home Value goes to $0. Line can be accessed at any time. 6

HECM Line of Credit: $147, year-old Client with $250,000 Home NOTEWORTHY: Line grows EVEN if Home Value goes to $0. Line is still in-force if one spouse passes. 7

HECM Monthly Payment; $1, year-old Client with $250,000 Home NOTEWORTHY: Payments continue EVEN if Home Value goes to $0. Payments continue even if one spouse passes; provided survivor lives in home, pays taxes and insurance and maintains the home. 8

Where does a HECM fit…Client First “Strategies” Social Security Deferral Outliving their Assets: Are your clients in the “Confidence Zone”? Portfolio Management: Standby Line as 3 rd Bucket CashFlow: Payoff First Mortgage or HELOC Downsizers can use HECM to Purchase Home Reduce IRA Distributions (and Taxes) that Exceed RMDs 9

Where does HECM fit?

For More Information or To Schedule a Presentation Kelly J DeWolf NMLS P: (406)

Additional HECM Facts 13

FHA-insured HECM Program FHA-insured HECMs (Home Equity Conversion Mortgages) are a way for homeowners, 62 and over, to access equity they have in their homes. Must be primary home and currently lived in, can be out 365 consecutive days. Single family property, HUD-approved condo, or up to 4-unit home. Proceeds can be used to purchase 2 nd home or other property. Can be used to payoff first mortgage or HELOC. Clients downsizing can use HECM to finance part of purchase! 14

Benefit Payment Options Lump Sum A withdrawal of your available benefit at loan closing (the entire amount or a partial amount), typically to pay off your existing mortgage balance, if any, and to provide cash. Fixed Monthly Payments Tenure A fixed monthly payment for as long as you remain in the home. Term A fixed monthly payment for a specific term that the borrower determines. Line of Credit A credit line the borrower can access at any time. The unused balance has a growth feature, which means the borrower will have access to additional benefits the longer they remain in their home. Unused Line GROWS over time. A Combination of Any of These Options HECMs cannot be called or cancelled as long as requirements are met. 15