FHA loans
(Federal Housing Administration) is for purchasers for whom the most important factors are limited cash funds and/or blemished credit or NO established credit. With an FHA loan, a couple with $4,500 total available cash can obtain a home for $100,000, with or without a gift or seller contribution. The loan amount can absorb the FHA funding fee and some of the closing costs, as well.

FHA also offers some very useful REHAB Programs which can be used to purchase with cash out for safety and other updates and repairs. You add the cost of the repairs to the purchase price and borrow up to 97% of the total.

The biggest problem for many FHA purchasers is -- since the loan size is pretty close to, or more than, the purchase price -- qualifying for and affording the monthly payment. But at a time like this, with rates as low as they have been in 30+ years, a variable-rate program can usually solve this problem, getting people into the house of their dreams.

VA loans
(Veterans Administration) permits a veteran or his/her spouse to use the VA Entitlement for assistance with housing financing. Instead of an FHA fee or PMI there is a VA funding fee, a percentage of the loan based on the amount and type of military service. Family gift funds are ok for closing costs, or the seller can pay up to 4%. Tax, insurance, and Interest "prepaids" can be paid by the seller. No reserves are needed after purchase, and 100% of rents can be used to qualify.

However, the new PITI (Total payment: principal, interest, taxes & insurance) should not be excessively higher than the current rent, and VA borrowers are qualified for the debt-to-income ratio with maintenance, childcare costs, etc., considered.

For FHA and VA loans, we will work up a free loan analysis and quote which will compare the government program with any other comparable program.


The reverse mortgage

Here are some basic facts about this type of program:

• The objective: to keep the homeowner over 62 in the home by lowering expenses:
     eliminating mortgage payments
     paying cash to the owners out of equity
  
  
• Interest accrues only on the amount of money/ income actually used/ distributed — so that the mortgage amount rises moderately, while home value continues to rise as well. In a 20-year period, equity usually increases, not decreases — as with any other mortgage type .
  
  
• The owner always retains ownership, and the heir(s) inherit.
  
  
• All plans pay owner a lump sum on closing, and 2 of the 3 types make monthly payments to the owner until death or age 100. The selected plan can be switched anytime.
  
  
• Receiving RM payments does not affect Social Security or Medicare payments.
  
  
• If the payment plan includes a credit line, the LOC balance increases if the interest rate rises.
  
  
• Owner's credit and income are not considered to qualify -- because owner is not liable for any form of repayment.
  
  
• Your loan officer has received training by the FFSFC in 2003. The homeowner must also receive counseling prior to applying for this program, so that owner and the family will understand it fully and make informed choices.
  
  
• The owner will never have to repay this mortgage as long as they live in the home, unless it is refinanced or the home is sold -- just like any other mortgage program. After death, the heirs have up to a year to pay it off by refinancing or selling the home.
  
  
• Neither the owner nor the estate will ever be held liable for a shortfall -- even if the worst should happen and property value declines below the mortgage amount.
  
  
• This program may be used to purchase or purchase and rehab simultaneously.
  
  
• Condos, multi-unit properties and Planned Unit Developments also OK.
  
  
• This program may be used to take the property out of foreclosure.

Benefits of the reverse mortgage: an example

Mary, 73, is a single owner whose property is worth $352,000.

Her mortgage balance is 102,000 and her payment is $625 with taxes
and insurance.Mary's other monthly debts are: auto loan and 2 credit/store cards, total $373.

Mary pays utility, gas and grocery costs of roughly $480 monthly.
She also pays $25 monthly for a prescription plan, $52 for medicines,
and $115 on an insurance policy, maintenance and taxes.

Against this basic monthly expenditure of $1670, her Social Security income is $1175, and she is forced to draw $1,000 per month for routine expenses and extras from her investments, which are being depleted at a steady rate . Further, the property needs repairs she cannot afford to make. A further concern is a steady deterioration of her health -- she wonders if she will be forced to sell her home to receive nursing care.

The reverse mortgage Mary obtained identified an available equity pool of $234,000 (at only 66% of the current value), out of which, the existing mortgage balance of $102,000 was paid off. After the service set-aside and closing costs were paid, Mary was paid a lump sum of $22,000 and she began receiving payments of $247 per month, which were to continue for 27 years. Mary used some of the lump sum she received to pay off her vehicle and cards, and to make property improvements.

Mary's income is now $1422 per month, and after payoffs, her outgo is now $672 -- leaving her free to re-direct her invested funds into more advantageous vehicles, as well as enjoy a freer lifestyle.

Mary anticipates that if she lives to 100, even with very modest appreciation of only 2.5% per year, her property will be worth at least $575,000, so that the payoff of the $230,000 mortgage will leave her heir a net of $345,000, or at least 35% more than when she took the Reverse Mortgage.

Any senior of modest means who does not investigate this option is missing out on a major life-enhancing benefit.

Please call if you are interested in seeing exactly how much you can receive; we'll produce a proposal for you, free of charge, which you may consider and share with your family or financial advisor.

We can also send you a packet of information, including web sites where you can research the Reverse Mortgage.

Be sure to request our information packet, including web sites where you can research the Reverse Mortgage.


Special Offer
Free Computerized Reverse Mortgage Evaluation: All we need is your full name, birth date, social security number, address, value of home, email address or telephone number, and your preference -- whether to receive your money as a lump sum, in a line of credit, or as monthly income to age 100 -- or any combination.

You may email us this information or call us toll-free at
877-350-2046. We will email, mail, or fax you the print-out, along with more information about the Reverse Mortgage, within 3 days.