1. Reverse Mortgages Adam Nimmer Anders Erickson Russ Sperry

2. Phoebe Fields Help! I need MONEY

3. reverse mortgage  a non-recourse loan against home equity providing cash advances to a borrower and requiring no repayment until a future time

4. Phoebe Fields How does it work?

5. Reverse Mortgage vs. “Forward” Mortgage Falling Debt, Rising Equity  your debt decreased; and  your home equity increased. Rising Debt, Falling Equity  your debt increases; and  your home equity decreases.

6. Two Important Notes Exception to Falling Equity Your home value grows at a higher rate. Maximum Debt You can never owe more than what your home is worth at the time the loan is repaid.

7. Phoebe Fields Am I eligible?

8. Who’s Eligible Individual at least 62 year of Age The home must be the principal residence Single family residence Some 2-4 unit owner-occupied Some condos, PUD, and manufactured homes Mobile homes and co-ops not eligible

9. Phoebe Fields What’s in it for me?

10. Lump Sum or Credit Line Lump Sum or Creditline When Expected Interest Rate is Home ValueAge7%8%9% $100,000 65$38,423$30,455$23,920 70$44,383$36,771$30,040 75$50,815$43,948$37,739 80$57,653$51,619$46,056 85$64,544$59,532$54,704 90$71,257$67,263$63,363 Home ValueAge7%8%9% $150,000 65$60,873$48,705$38,720 70$69,733$58,121$48,404 75$79,265$68,798$59,339 80$89,353$80,169$71,706 85$99,444$91,832$84,504 90$109,157$103,113$97,213 Home ValueAge7%8%9% $200,000 65$83,323$66,955$53,520 70$95,083$79,471$66,404 75$107,715$93,648$80,939 80$121,053$108,719$97,356 85$134,344$124,132$114,304 90$147,057$138,963$131,063

11. Loan Calculator Calculator: http://www.rmaarp.com/ Limits: https://entp.hud.gov/idapp/html/hicostlook.cfm

12. Phoebe Fields Where can I get a reverse mortgage?

13. 3 Major Types Single-purpose Federally insured Proprietary

14. Single-Purpose Federally InsuredProprietary Can be used forpropety taxes, home repairs any purpose Availabilityvaries throughout the U.S.varies Income Elibilitymost limited to low income no income limit Loan-advance typestied to permitted uses all typesgenerally most types Loan-advance amountsgenerally the smallest generally the largestlargest on highest-value homes only Cost is generallylow moderatehigh Offered bystate & local government bank & mortgage companiesbanks & mortgage companies Backed bystate & local government federal government (FHA)private companies

15. Federally Insured Single-PurposeFederally InsuredProprietary Can be used forpropety taxes, home repairsany purpose Availabilityvariesthroughout the U.S. varies Income Elibilitymost limited to low incomeno income limit Loan-advance typestied to permitted usesall types generally most types Loan-advance amountsgenerally the smallestgenerally the largest largest on highest-value homes only Cost is generallylowmoderate high Offered bystate & local governmentbank & mortgage companies banks & mortgage companies Backed bystate & local governmentfederal government (FHA) private companies

16. Lump Sum: HECM vs. Proprietary HECMProprietary Total Cash to Consumer 86%71% Total Loan Costs 14%29% Future Net Home Value 100%

17. Monthly Advances: HECM vs. Proprietary HECMProprietary Total Cash to Consumer 86%82% Total Loan Costs 14%18% Future Net Home Value 100%

18. Proprietary Single-PurposeFederally InsuredProprietary Can be used for propety taxes, home repairsany purpose Availability variesthroughout the U.S. varies Income Elibility most limited to low incomeno income limit Loan-advance types tied to permitted usesall types generally most types Loan-advance amounts generally the smallestgenerally the largest largest on highest-value homes only Cost is generally lowmoderate high Offered by state & local governmentbank & mortgage companies banks & mortgage companies Backed by state & local governmentfederal government (FHA) private companies

19. 3 Forms of Payments Received Lump Sum Credit Line Annuity

20. Phoebe Fields What’s the catch sonny?

21. What do you pay? Application Fee - $300 appraisal, $60 credit check Origination Fee – limit of 2% Closing Costs - $2,000 Servicing Fee - $30 monthly Interest Rates

22. Monthly and Annually Adjustable Interest Monthly AdjustableAnnually Adjustable Expected rate7.00%7.60% Rate cap(s)10% total2% per year; 5% total Servicing fee$35/month$30/month Lump Sum or Creditline$78,584$72,570 Monthly Advance$577$561

23. Repayment All reverse mortgages become due and payable when the last surviving borrower dies, sells the home, or permanently moves out of the home. Fail to pay your property taxes Fail to maintain and repair your home Fail to keep your home insured Declaration of bankruptcy

24. Summary reverse mortgage  a non-recourse loan against home equity providing cash advances to a borrower and requiring no repayment until a future time 3 Types 3 Forms of Payments Repayment Eligibility Recommendations

25. Phoebe Fields Now I’m happy. Vegas, here I come!