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Financial Planners Presentation
Financial Advisors, CPAs, Estate Attorneys, Insurance Agents & Mortgage
Brokers
Who is Access National Mortgage?
Access National Mortgage is a full service national lender that has been
in business for 20 years. We combine portfolio community banking with
national mortgage banking, allowing us to create tailor-made financing
to meet your needs … one person at a time.
Mission Statement
Our mission is to provide progressive and superior financial solutions
to the communities that we serve. All of our endeavors will enrich the
interests of our clients, associates and shareholders.
Typical Retirement Assets
* Source: Federal Reserve
What is a Reverse Mortgage?
Reverse Mortgages are non-recourse loans that allow senior homeowners
age 62 or older to convert home equity into cash
- Without leaving their homes
- Without income qualifications
- Without making monthly mortgage payments
- Without repayment of the loan until the last borrower moves out permanently
- Tax-free proceeds
- Proceeds paid in lump sum, monthly payments, line of credit or any
combination*
- Interest may be tax-deductible upon loan repayment, please consult
a tax advisor
* Not all products and options available in all states
How a Reverse Mortgage works
- Loan proceeds available to the borrower are based on three main factors:
- Age of homeowner(s)
- Appraised Value of home or Maximum Lending Limit
- Current Interest rates
- Loan is repaid at death or move out, and repayment never exceeds value of home
- Amount repaid is principal, accrued interest, service fees and any other applicable charges
Common Misconceptions
“The lender takes the house”
Homeowner retains full title to the property Reverse Mortgage is a loan
“I can be thrown out of my home”
Homeowner can stay in home until loan maturity event occurs
“I can owe more than my home is worth”
Homeowner can never owe more than value of home
“My heirs will be against it”
Experience demonstrates heirs are in favor of Reverse Mortgages
The Market Today
- HUD/FHA Insured “HECM” - Lending Limit = $160,176 (in
most Florida counties)
- Fannie Mae Home Keeper - Lending Limit = $333,700
- Financial Freedom Products
- “Cash Account”
- Standard
- High Benefit ( Includes Equity Share Feature)
- Virtually No Maximum Home Value Limit
* Not all products and options available in all states
Reverse Mortgage Examples
| FHA Home Equity Conversion Mortgage “HECM” |
| Borrower: |
Single, aged 65 |
| Value of Home: |
$150,000 |
| Eligible Proceeds: |
$84,5481 (or $483 monthly) |
| |
|
| Borrower: |
Couple, aged 80 and 82 |
| Value of Home: |
$250,000 with $15,000 mortgage |
| Eligible Proceeds: |
$164,3491 after $15,000 mortgage payoff
(or $1,155 monthly) |
| [1] Example as of November 14, 2002 and
net of origination fees, HUD MIP and other closing costs. Illustrations
are based on lesser of Home Value or Maximum Lending Limit. |
| Financial Freedom - Cash Account™ |
| Borrower: |
Couple, aged 75 |
| Value of Home: |
$2,500,000 |
| Eligible Proceeds: |
$577,6542 |
| |
|
| Borrower: |
Single, aged 82 |
| Value of Home: |
$1,200,000 |
| Eligible Proceeds: |
$525,9702 |
| [2] Example as of November 14, 2002 and
net of origination fees and other closing costs |
Reverse Mortgages As a Retirement Planning Tool
Proceeds can be used to fund a variety of financial products
- Augment Monthly Income through purchase of Annuity product
- Long Term Care Funding
- Estate Planning
- Life Insurance and Investment Funding
- Charitable and Family Gifting
- Retirement Home Purchase
(Purchase of non-reverse mortgage products are available at additional
costs through independent third parties.)
Reverse Mortgages as an Estate Planning Tool
| Reverse Mortgage Case Study |
| Client Profile: |
75 year old widow |
| Assets: |
$750,000 home (primary residence)
$1,000,000 municipal bond portfolio
(primary income source)
$500,000 IRA (from deceased husband) |
| Income: |
Combination of income from muni bond portfolio, required minimum
distributions from IRA, and social security |
| Expenses: |
$75,000/year |
| Problem: |
How to pay for a sufficient level of insurance to more efficiently
transfer wealth to the next generation, without affecting current
income? |
| Solution: |
Reverse Mortgage |
| Steps: |
- Proceeds of $224,657 can be generated through the use of a reverse
mortgag
- The loan proceeds are used to purchase a single premium immediate
annuity, with the annual net after tax payment equal to approximately
$20,000
- Gifts are made annually to a Trust in the amount of $20,000
- Life insurance in the amount of $600,000 is purchased inside
the Trust
|
| Financial Impact to Client: |
Reverse Mortgage has the impact of reducing the taxable portion
of the Estate, and Life Insurance has the impact of increasing the
non-taxable portion of the Estate |
| Financial Impact to Financial Advisor: |
- Annuity commission of 3% equals $6,500
- Insurance commission of 90% of 1st years premium equals $18,000
- Total commission of $24,500
|
Reverse Mortgages as a LTC Planning Tool
| Reverse Mortgage Case Study |
| Client Profile: |
Couple, age 75 |
| Assets: |
$2,500,000 home (primary residence) |
| Problem: |
Client wishes to purchase LTC Policy |
| Solution: |
- Proceeds of $577,654 generated through use of reverse mortgage
- Purchase SPIA, certain period 10-years on husband in amount of $124,359
- SPIA pays monthly premium of $1,223.92 to LTC carrier and at end of 10th year, policy is paid in full
|
Reverse Mortgages for the Advisor Market
Reverse Mortgages have applicability, both directly and indirectly, to
a large segment of the population, and is an excellent cross-generational
marketing and prospecting tool
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