About Corona's Trilogy

Just closed a reverse mortgage loan for a homeowner here in Corona for a healthy, vibrant and young looking widow who owned her home free and clear. She lives in a beautiful single story newer home in Trilogy, a gated 55+ resort community. Her beautiful home was designed for “aging in place”. My clients monthly expenses were digging into her savings to the tune of about $700 each month and she could see her nest egg shrinking away. It would be completely gone in under 5 years! The current low interest rates weren’t helping either. She was sceptical at first about getting a reverse mortgage having heard some of the common misconceptions, but was interested to see what I had to say about it.

Trilogy at Glen Ivy is a 55+ community nestled in the Foothills of the Cleveland National Forest. This is NOT a retirement community; this is a wonderful community for active adults who enjoy living! Here are just a few of the reasons you should consider Trilogy at Glen Ivy.

• Location: Trilogy is located just outside of Corona, Ca. Easy freeway access to the I-15, you will be just 30 minutes from the award winning wineries in Temecula, 15 minutes from Lake Elsinore Factory Outlets. Corona is located within an hour of San Diego, Orange County beaches, and local mountain skiing. We are just a few minutes from Tom's Farms for fresh produce, dining, and entertainment. Corona Regional Medical Center is about 15 minutes away, and Corona is home to fine family doctors as well as specialists. We are also close to the VA hospital in Loma Linda. Don't drive the freeway? No problem, you can get to local grocery stores, movies, dining, mall shopping, doctors, and hospital on surface streets.
• A home for everyone: Trilogy offers a home for nearly every budget and every need! We have 170 condos and over 1200 single family homes. All the homes are single story, and many of them capture the stunning views of the city or the hills. The association takes care of the front yard landscaping. Less yard work for you, and more time to play.
• Safety and Security: Each neighborhood in Trilogy is gated for security. You will meet your neighbors and you will find that neighbors watch out for eachother here.
  
• Friends: If you are looking to meet friends just like you, this is the place! We have classes, mixers, potlucks, parties, walking groups, travel clubs, golf groups, the list is endless. What is your passion? We probably have a group for it.
• Education: Want to learn something new? We have a learning center that offers classes on a variety of interests including painting, computers, pottery, writing, and new classes are added all the time.
• Resort Style Living: You name it, we have it. An 18 hole championship golf course, 4 lighted tennis courts, a full gym, indoor walking/jogging track, indoor and outdoor swimming pools, a billiards room, a library, and so much more.

So if you are an active adult considering making a change, please consider Trilogy at Glen Ivy. Call Liane at 951 454-3805 today to schedule your no obligation tour. We'd love to show you around.

The daughter of a potential client of mine asked me today to send her "something that summaries the features and benefits of all of these different reverse mortgage programs". When I finished simplifying and summarizing to send it to her, I thought this would be good to share. So here it is.

I've listed the features below... and the benefits? Increased cash flow and access to funds & all that may bring to the quality of life.

Borrower responsibilities

• Live in the home.
• Maintain the home.
• Keep the home insured.
• Keep property taxes and property owners association dues current.

All HECM reverse mortgage products

• No mortgage payments.
• No minimum credit score requirements.
• No income requirement.*
• Non-recourse Loan - Borrower & Heirs protected - Borrower or Estate are not responsible to pay any shortage if home is sold at market value for less than loan balance.
• Loan proceeds are not taxable income.
• No prepayment penalties.
• Up-front Mortgage Insurance Premium
• Monthly Mortgage Insurance of 1.25% of loan amount per annum, accrued monthly.
• Due & payable when the last borrower no longer lives permanently in the home

*Sufficient income to cover the costs of property taxes and hazard insurance are required when obtaining a HECM for Purchase.

HECM Adjustable Products

• Interest rate is based upon the 1 Mo. LIBOR rate (1MLB)
• Interest rate adjusts monthly.
• Interest rate is capped at 10% over the initial rate.
• FHA Insurance protects the borrower by guaranteeing continuing payments (term or tenure) and credit line availability, including growtheven if lender fails.
• Ability to receive loan proceeds in various ways.
• Tenure (monthly payments for life while in home)
• Term (monthly payments for specific time period)
• Line of Credit with a guaranteed growth rate**
• Lump sum
• Combination of any or all of the above
• Ability to change style of payout even after closing for a $20 recalculation fee)

**Growth rate on Line of Credit is equal to the note rate plus 1.25%, and not dependent upon future home value or income or loan balance.

HECM-Fixed Products

• Higher loan amount available. (At this time)
• May only receive funds as lump sum.
• Accurate prediction of future balance.

HECM Standard Reverse (fixed or adjustable)

• Highest Loan amounts.
• Up-front Mortgage Insurance Premium is 2% of Home Value.

HECM Saver Reverse (fixed or adjustable)

• Lower Loan amounts (means lower risk for investor)
• Lower Up-front Mortgage Insurance Premium .01% of Home Value

Did I miss anything??

Trilogy Homes at Glen Ivy is a tranquil resort community for active seniors! Homeowners must be over 55 years of age, and if they are over 62 they may want to look into the option of financing their new home with an FHA Reverse Mortgage.

An Example - Bob and Betty Buyer are purchasing a single story home and selling their two story family home.

• Bob is 76 and Betty is 75
• The clients' proceeds on their existing home after all expenses will be approximately $152,000.00
• With $152,000 to put into a new home and a HECM loan the clients have the purchasing power to obtain a home valued at up to $350,000 with no monthly mortgage payments - EVER!

Here is an overview of the Reverse Mortgage for Purchase program.

• FHA defines "HECM for Purchase" as a real estate purchase where title to the property is transferred to the HECM borrower, which the borrower will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property.

There are 3 Major Benefits To Senior Homebuyers

• Gives homebuyers who are downsizing more purchasing power than if they had to pay all cash
• Designed to allow your seniors to purchase a new principal residence and obtain a Reverse Mortgage within a single transaction by eliminating the need for a second closing.
• Buyers do not have to "qualify" for monthly payments on the new purchase transaction. A significant detail to senior homebuyers on a fixed income.

Other Benefits to Senior Homebuyers

• Eliminates Monthly Mortgage Payments
• Borrower Maintains The Title
• Loan Is Non-Recourse
• Remaining Equity Goes To Borrower Or Borrower's Heirs, Not The Bank
• No Pre-Payment Penalty
• FHA-Insured
• Usually No Income Verification Or Credit Score Requirement (If buyer is retaining their former home as rental property there are income requirements)

* Certain transactions will require "qualification" - ask your Reverse Mortgage Consultant for specific details.

Things have changed in the reverse mortgage world this year - so I'm updating this post.

Reverse Mortgages are a type of home loan. Most reverse mortgages are a HUD/FHA insured home loan that allows you to liquidate some of your equity in order to payoff existing mortgages as well as generate additional cash flow. They are called HECM Loans. HECM stands for Home Equity Conversion Mortgage.

There are 2 types of HECM Loans.

• HECM Standard (higher loan amounts and 2% Upfront MIP*)
• HECM Saver (reduced loan amounts and .01% Upfront MIP*)

Reverse Mortgages are regulated and insured by the Federal Housing Administration (FHA). By law, you can never be forced to sell your home of move. You will always retain the title to your home, and you can still leave your home to your children or whoever you choose. There is almost no risk of losing your home. The homeowners obligations are threefold:

• Live in the home as your Primary Residence (at least one spouse must live in the home)
• Keep the home insured and property taxes current.
• Keep the home in good condition.

Who Qualifies?

• Senior Homeowners with enough equity, over the age of 62.
• Most 1 to 4 family Residences qualify.
• FHA Approved Condominiums
• Post 1976 Manufactured Homes on their own lots.

Some of the best features of an FHA Reverse Mortgage are the methods that you can access the equity in your home!

• Lump Sum - (The only option on the Fixed Rate Reverse) Take all the money you are entitled to at the close of escrow.
• Tenure Payments - Monthly payments to the homeowner for as long as they live in the home.
• Credit Line - Leave the funds in a line of credit (that has a guaranteed growth feature) to be accessed as you need it.
• Term payments - specific amount of money for a specific term.
• Any combination of the options listed above.

As with all other FHA Home Loans, a reverse mortgage is a "Non Recourse" loan. This means that the lenders only security for repayment of the loan is the home itself. The lender has no rights to lien any other assets of the borrower or their estate. Only the home itself can be used as the lenders recourse to a foreclosure. If the home is worth less than the outstanding balance of the reverse mortgage then the lender must go to FHA for reimbursement of any loss. The loss will not generate any judgements or liens against the borrower or their heirs.

* Upfront MIP is based upon either 2% or .01% of the home value or lending limit, whichever is less. There is also a monthly premium equal to 1.25% per annum of the loan balance, making the "effective" interest rate of the loan 1.25% higher than the note rate. Very similar to the forward FHA mortgage, but in reverse the interest and MIP just accrue as no payments are required. You CAN make payments if you like though and that can be a good idea especially with the adjustable reverse.