Flex Payment Mortgage – Benefiting seniors who want to enjoy retirement to the fullest!
Kyle’s mortgage background and rich life experiences have made him a valuable addition to the Guild family. His nearly thirteen years of reverse mortgage experience provides him expertise and confidence when guiding his clients to the most suitable mortgage product based on their individual needs. He takes great pride in representing his company’s values while educating homeowners on different mortgage options and solutions. Ensuring customer satisfaction and a transparent approach to the loan process has allowed him to retain many repeat clients. Kyle’s focus on making the homeowner’s experience as pleasant and efficient as possible is key to his success.
Flex Payment Mortgage – Benefiting seniors who want to enjoy retirement to the fullest!
10/15/2024
Some of the most enjoyable years of our lives should be spent in retirement, but this is becoming more challenging for many senior homeowners. The fact that many retirees are carrying more debt well into their 70’s is a major reason why it’s hard to “get ahead” and enjoy retirement- based on employee benefit research institute report on Housing Wire article. Retirement is supposed to be the Golden Years, where you can enjoy the fruits of your labor after many years of hard work. However, the biggest stress for seniors seems to be the rising cost of living. Many homeowners are struggling with the increased cost of goods and overall inflation. If they were aware of a Flex Payment Mortgage option, such as the Home Equity Conversion Mortgage (HECM), they could use their home equity to gain more peace of mind and worry less about their finances. This will lead to a more enjoyable retirement for many!
The current Social Security system is not sufficient for retirees to live on solely, which is why 79% of adults believe it needs to be fixed or reformed- per Housing Wire article regarding a national survey. The consumer purchasing power of U.S Social Security program benefits in 2024 is roughly 80 cents on the dollar when compared to the power of these benefits in 2010- according to the measurement of social security benefits conducted by the senior citizens league (TCSL) in a study from July 2024. That is a 20% reduction in purchasing power of Social Security Income alone. Social Security income alone is only providing enough retirement benefits for some seniors to barely get by month to month. Without having funded a 401(k), IRA, or pension for retirement, it can be unrealistic for many U.S. adults to retire at age 65. Based on Equitable’s surveys revealed that nearly half of consumers (47%) believe it’s unrealistic from them to retire at age 65. Instead, most expect to retire nearly a decade later at age 74. According to the CDC, the current life expectancy in the U.S. is 75 years for males and 80 years for females. This means most homeowners may have to work until they are 70 years old and then only have a few short years left to enjoy retirement. A Flex Payment Mortgage loan can allow homeowners to retire many years earlier because their home equity is likely their biggest asset. By eliminating their mortgage payment* one can free up enough cash flow to improve their quality of life.
Guild Mortgage has recently introduced their updated product offerings to include the Flex Payment mortgage, which gives homeowners the ability to use their equity to live much more comfortably. With a reverse mortgage or Home Equity Conversion Mortgage (HECM), you can pay back the loan at any time during its life because there is no pre-payment penalty. The biggest advantage is that a mortgage payment is NEVER required* but can be voluntarily made, giving the homeowner control over how much they want to pay monthly. Guild Mortgage’s Managing Director of Reverse, Jim Cory, recently discussed the company’s rebranding to better suit a demographic that wants more flexibility in a mortgage loan in the latter parts of their lives. Housing wire’s Reverse Mortgage Daily (RMD) recently sat down with Jim to discuss Guild’s rebrand. Who wants to continue paying on their mortgage until they are 100 years old, which is something most homeowners are committed to if they refinance with a traditional 30-year mortgage at age 70. A reverse mortgage purchase loan can help those wanting to get into the home of their dreams for retirement without having to make a mortgage payment as they continue to live in the home.
The Flex Payment Mortgage loan allows them to put down a larger down payment and then have a mortgage that they can voluntarily make monthly or periodic payments on, based on their financial situation. This is an underserved part of the home purchase market and one that baby boomers can and should take advantage of. “According to Most real estate agents, builders, and customers have no idea that the HECM purchase financing option exists to purchase homes” says Rob Cooper, National Purchase and Builders sale leader for Longbridge. The biggest advantage is that they never have to make a mortgage payment*, and the loan will be paid back after they have passed away. Their heirs will still inherit the home and can recoup the remaining equity as long as they meet the following criteria: 1) They have legal authority to obtain the title of the property after the parents/borrowers pass (via trust or probated will), 2) They can sell the home after the parent’s passing since they are next of kin, and 3) They wish to pay back the loan from their own funds. This really is a win-win for the parents, allowing them to live a better life, and for the children, who can still retain the equity left in the home after the HECM borrowers/parents have passed away. Most children are becoming more aware of the benefits of a flex payment mortgage or reverse mortgage and therefore recommend it for their parents so they can live more comfortably.
Important information:
At the end of the Flex Payment Mortgage loan term, some or all of the property’s equity won’t belong to the borrower, and they may need to sell or transfer the property to repay the proceeds of the Flex Payment Mortgage. Guild will add the applicable Flex Payment Mortgage origination fee, mortgage insurance premium, closing costs, or servicing fees to the balance of the loan which will grow, along with the interest, over time. Interest isn’t tax deductible until all or part of the loan is repaid. Failing to pay property taxes, insurance, and maintenance might subject the property to a tax lien, foreclosure, or other encumbrance since the borrower retains the title.
Fixed-rate and adjustable-rate home equity conversion mortgages (HECM) are insured by Federal Housing Administration (FHA). Fixed-rate loans are distributed in a single lump sum with no future draws. Adjustable-rate mortgages offer five payment options and allow for future draws. The age of the youngest borrower determines the amount of funds available that can be received during the first 12-month period, subject to an initial disbursement limit.
These materials are not from HUD or FHA and were not approved by HUD or a government agency. A Flex Payment Mortgage is Guild’s version of a reverse mortgage
*Borrower must maintain home as principal residence, pay all taxes, insurance, maintain the home, and comply with all other loan terms.