Chris is 100% committed to delivering the best to his clients. His enthusiasm and determination is an inspiration to me and so many other veterans. Most of all, he is a true family man. Chris and the HECM Helpers team are doing something really awesome and I'm proud to be involved.
Chris is proof that commitment to veterans, smart business development, and application of expert skills earned over decades of work CAN be found in one person. To top that off - his sense of ethics is nothing less than you'd expect from a military veteran - peerless. If your mortgage needs are aligned with Chris, you'll find no better partner, provider, or colleague!
Chris knows what it means to “serve” and has a genuine passion to serve those who have served our country. He is a service-connected disabled USAF Gulf War veteran and comes from a long family line of military veterans in all branches of service dating back to the Civil War. It has been my privilege to know him. It has been my honor to work with him directly and refer people to him.
According to AARP research, retirees reported the HECM loan had a “positive effect on their lives'' because it let them “remain in their home” with a “more comfortably lifestyle” by helping them: 1) free up more money for basic necessities, emergencies, and inflation on everyday expenses; 2) pay off non-mortgage debts; 3) pay for health disabilities; 4) pay for the increasing cost of annual taxes and insurance premiums. In fact, I have seen this first hand as I watched my own grandparents fully enjoy their HECM loan through their retirement years.
HECM is an acronym for Home Equity Conversion Mortgage which is the FHA federally regulated and guaranteed reverse mortgage loan that provides a safe way to access the equity (i.e. money) in your home without ever making a mortgage payment for the remainder of your life because it allows the equity in your home to pay you rather than you having to keep paying for the home (like with a "forward" 30 yr fixed mortgage).With regards to this loan, it's important to understand that no matter what happens in the economy, how much money you receive, or how long you live in your home you will never be required to make a mortgage payment. In addition, no matter what happens to your lender or your home’s value you will always have guaranteed access to your money.
For a HECM reverse mortgage you must be at least 62 years old, and you must have sufficient equity in your home. However, there are a variety of proprietary jumbo reverse mortgage loans that you may be eligible for if you are at least 55 years old.
Simply put, according to an AARP study, most retirees have been poorly informed on the real features and benefits of a HECM loan. This study reported that retirees were being poorly educated on HECM loans because the majority of the information they received came by way of either short tv ads, overwhelming and often contradicting content on the internet, quick counseling sessions by poorly trained individuals, family and friends, and worse of all loan officers who fraudulently represent themselves as experts–when the unfortunate truth is the majority of loan officers know very little about hecm loans.
If you decide to sell your home, you can just pay off the balance on the HECM loan via the proceeds from the sale of your home and pocket the net proceeds–same as you would if you had a (forward) 30-yr fixed conventional loan.
As long as you continue to verify that you’re occupying and maintaining the property while paying your taxes and insurance on time, the lender has no reason to foreclose. According to HUD, “…the vast number of 'foreclosures' occurs as part of the normal closing out of HECMs after the last surviving borrower dies.'' In fact, less than 9% of HECM loans have foreclosed and 62% of those were simply a closing out of the debt due to the death of the borrower(s); 22 percent occurred through an insurance or property tax default; and 15 percent were simply due to the borrower no longer occupying the property.
One of the very cool attributes of these HECM loans is that even if the home is upside down in value, the heirs will be able to purchase the home for 95% of the appraised value. For example, if the home is worth $100K and the HECM loan balance is now at $200K when they pass away, the heirs could buy the home for $95K. Isn't that great?!
What a lot of borrowers don’t realize is that it’s possible to get a reverse mortgage with zero upfront, out-of-pocket costs and zero total closing costs. There are multiple different HECM loan products that are fixed or variable and there are similarly multiple different proprietary jumbo loan products to choose from. HECM HELPERS will work to qualify you with the best lender with the best pricing that meets your needs.
That said, there are a few reasons why HECM loans are “typical” priced higher than a 30-yr fixed loan.
The first one should be obvious: the HECM is simply more valuable. You simply can not equate the value of a forward 30-yr fixed that requires you to pay your principal and interest payment every month to a HECM loan that doesn’t require you to pay principle or interest until you pass away. The second reason is simply because there is a sizable Upfront Mortgage Insurance Premium (UFMIP) paid directly to FHA to protect the lender by having it guaranteed and insured by FHA. Without FHA insurance on these loans, lenders could not have offered this loan to the over one million retirees currently in a FHA-insured HECM loan.
Finally, HECM loans may cost more sometimes because they are much more costly for the broker or lender to originate, as well as, to process
The truth is, it’s not hard to qualify for a HECM loan. In fact, I always tell retirees, it’s not will you qualify, it’s when will you qualify because, if you’re over 55 years old living in a home in good condition with sufficient equity, it’s pretty easy to get approved due to the fact that there are minimal income and credit requirements.
HECM loans do not even use a Debt-to-Income ratio for income, rather they use a simple Financial Assessment. And, with extenuating circumstances (and a great LO who knows how to help you put together a strong Letter of Explanation), you may be approved with very low fico scores, BKs, FCs, or even if you’re behind on your mortgage payment. Just read or watch our testimonies to see some perfect examples of this.
You, the borrower, continue to retain 100% of title and ownership. The bank is not on the title and does not own your home; you simply pledge the home as collateral—same as you’re already doing with a 30-year fixed.
Once you’ve both passed away, your heirs will have a full year to decide if they want to:
1. Pay off the balance of the loan via cash or a refinance with a forward mortgage;
2. Sell the property and pay off the balance and keep the net proceeds; or…
3. Do nothing and let the lender foreclose. In the case of a foreclosure…
Heirs will NOT be liable for any shortfall if the sales proceeds do not cover the loan balance in full because HECM loans are non-recourse loans which means the lender can not come after your heirs for any of their losses. Further more, if a foreclosure sale results in excess proceeds, the lender doesn't get to keep that money. The lender is only entitled to proceeds covering the outstanding loan balance and the costs associated with the foreclosure and sale—nothing more. After the lender has covered all their costs, all recorded judgment liens against the property will also need to be paid. Then, any proceeds left over after paying off these liens will be available to the heir(s) of the foreclosed homeowner(s).
Unfortunately, there is a common trend among retirees to incur unnecessary capital gains on the stocks they are liquidating from their portfolio to pay for all sorts of things (e.g. basic necessities, emergencies, inflation on everyday expenses; non-mortgage debts; pay for health disabilities; pay for the increasing cost of annual taxes and insurance premiums; and the upkeep of their home).
However, as Suze Orman on her CNBC show explained recently, “a reverse mortgage is a better option than selling stock,” Her reasoning is that your heirs will have a better chance of recouping the lost value of stocks over the years since the stock market recovers faster than the real estate market.
1. CONTACT HECM HELPERS: Click on the link on top of website that says, “Ready to Eliminate Your Mortgage Payment?” to schedule a call with Chris Paschane directly. He will discuss with you your retirement goals; debunk the myths surrounding HECM loans, and candidly inform you of all your HECM loan options that will help you retire better.
2. SCHEDULE COUNSELING: We will provide you a list of 3rd-party, HUD-approved counselors who are specially trained and certified by the government to help you assess your financial situation and evaluate the loan options we provide.
3. COMPLETE APPLICATION: Once you decide to proceed, we will guide you step by step through the application process and work diligently to process and fund your loan as efficiently as possible.
4. RETIRE BETTER: Congratulations! You did it! You are mortgage payment free and may even have a nice sized line of credit to allow you to live more comfortably with a peace of mind.