The Happiness Pursuit: One HECM at a Time
Happiness is often seen as a momentary emotion or fleeting experience. With a quick look-up on the web, Merriam-Webster Dictionary will tell you that “happiness” is a state of well-being and contentment: JOY. Although no one in a rightful state of mind would bother to pick a fight with a reliable old go-to such as Webster, we’re certainly familiar with the age-old binary debate: happiness OR joy? Popular opinion says, choose one because you’ll never have both.
Though allusive, happiness is the inherent driver to the very essence of our pursuits. And depending on the individual, each traveling road displays a very different scenery. There’s a common misperception that’s evolved over time with respect to one’s happiness and emotional aging. It seems that people have widely accepted the notion that with increase of age comes an inevitable decrease in happiness.
Imagined with grim expectation, is an overall fear that with each passing year an ultimate and inevitable downward ‘quality of life’ trajectory gains on us its momentum. It’s a rather dismal thought and certainly glad to report
It’s Simply NOT true.
As old as time is the relational disconnect between the senior community and everyone else. With their glory years far behind, our golden agers are the assumed passive sideliners to a miserable final act existence. It’s a dramatic underplay to the actual life satisfaction experienced by those in eldership.
Also, NOT true.
With no shortage of research on the topic, studies have repeatedly revealed and proven the direct opposite. It turns out, our seniors are far more optimistic than they’re credited. In fact, society’s over-the-hillers not only look ahead with anticipation, they’re happier. The evidence further shows that when it comes to happiness, seniors are skipping along with more ‘pep in step’ than junior generations.
How, you ask? Because the key to happiness is simple, and these old-schoolers ‘get’ it.
The happiness debate beckons us toward a ‘get to know our seniors’ sort of discourse. When we peel back the assumptive layers, we discover that seniors are just as relevant as you and me. Their arrival to seniorhood has undoubtedly acquired them an invaluable wisdom—making clear over time, a much simpler answer to the happiness question.
We’ve learned that elderly dreams and aspirations haven’t necessarily gone anywhere. Given the financial means and opportunity to see it all realized, without any hesitation, the greater half absolutely would.
Today’s senior population demographic is worthy of interest. According to Forbes.com, nearly “23% of U.S. Seniors lack a private retirement plan.” And while the majority of senior wealth remains locked in via home equity, countless aging Americans are dependent upon Social Security and/or pension incomes. Silently creeping among them is a looming threat—scores of senior households are only one setback away from total financial disaster.
Reverse Mortgage places Happiness in Sight…
There are two types of senior perspectives. The first are those with deep-seated sentimental values attached to remaining in their lifelong homes. And those who’d leap at the chance to live out their latter years somewhere fresher and anew.
What is it about Reverse Mortgage that makes it more special than other loan products? There’s one distinct identifier: it’s the only loan of its kind. The Reverse Mortgage offers a customizable feature advantage no other does. There’s more to the Reverse Mortgage program than its non-recourse, growing line-of-credit and eliminated payment benefits.
Measured upon borrower age and property equity, it is known that nearly 60% of senior-aged households would qualify for a HECM Product. The program presents for retirees course changing possibilities otherwise not available; yet, far too few are privy to the program. And while the loan’s popularity has gained traction, its true progress will result one Reverse Mortgage at a time.
What does Reverse Mortgage have to offer?
Designed with a customizable platform, the loan truly accommodates for the assorted needs and circumstances of each unique borrower. And since retirement goals and priorities run dependent upon the inquiring individual, the loan’s appeal is contingent upon its layered offerings. So whether a borrower desires to remain in their home or move on to a new one, Reverse Mortgage is there to help.
The standard Home Equity Conversion Mortgage Loan is federally-insured and backed by HUD (Department of Housing and Urban Development) and the FHA (Federal Housing Administration). Its rates are based on the current LIBOR (London Interbank Offer Rate) and allows borrower’s access to a portion of their home’s equity.
With the Standard HECM, funds can be accessed and disbursed via:
Adjustable Rate HECM Option:
Lump-Sum—Cash-Out Payment.
Line of Credit—Built-in equity growth potential based on rate with an option to draw a percentage at closing and the remaining balance available at 12 months.
Customizable Tenured Payments—Borrower may choose payment schedule based upon available equity.
Fixed Rate HECM Option:
Used to lock-in a low interest rate, this option allows for only a one-time, single lump sum disbursement.
HECM for Purchase:
This option allows seniors to purchase a new home while obtaining a Reverse Mortgage simultaneously. They’re able to purchase a new home with a payment free benefit. The program requires a down payment that is determined by the age of the youngest borrowing or eligible non-borrowing spouse. The required down payment spans from 45% -62% of the purchase price—and the remaining purchase balance is covered by the HECM loan.
There are several solid reasons a senior could benefit from this option:
Right-Sizing—home no longer serves the borrower well. They may decide to size-up or down according to their current need(s).
Location—borrower may be longing for family and decide to reside closer.
Mobility—borrower is experiencing physical limitations with age and desires a modifiable home. They may decide tangible accommodations are best to make easier physically hindering health conditions.
Cost of Living—borrower may wish to eliminate mortgage payments, lowering outgoing expense.
Aspiration—borrower may choose to live-out their years in a home or area they’ve always dreamed.
Eligibility Criteria:
One spouse should be aged 62 years or older.
Purchased home must be primary residence.
Property must be a Single-Family; 2-4 Unit ‘owner-occupied’ dwelling; FHA Approved Condo; Manufactured Home (eligible per FHA guidelines).
Things to know when considering a HECM for Purchase
If the borrower is a current homeowner, and assuming all income and guideline criteria are ironed out, he/she may choose to sell, rent-out or keep existing home. But whatever the elected path, the loan’s subject home must be and remain the borrower’s primary residence.
Currently, FHA’s lending limit is $726,525. But it’s been announced by FHA that come 2020, we’re expecting its lending threshold rise to $765,600. This change presents some serious lending power for PRMG and an implicit dream-realizing potential for HECM borrowers.
The HECM loan has borrower-protecting safeguards in place. The required Initial Insurance Premium (IMIP) ensures the borrower nor heirs will never owe more than their home is worth.
We all know life can be tough enough without compounding obstacles. We witness daily in our Division unbearable grievances experienced by our borrowers. Many of the various challenges and losses faced come with financial consequences. Whether related to illnesses and/or departures of parents, spouses and children, the damaging blows are severe.
The resilience displayed by our borrowers is astonishing. This special group masters well the art of coping through such deeply moving adversities. And while their resolve survives intact, we understand the happiness complexity. And the senior response makes apparent to the rest of us an imaginable and less obscure ‘pick up and dust off’ hope reality.
Despite their unpublished testimonies, innumerous seniors are out there imagining for themselves something ‘greater.’ With the building years behind them, our elders have arrived upon a chapter they’re yet to enjoy. Exposure to the Reverse Mortgage awaits them, but with each given day, its opportunity impact is fading.
Inspired Happiness
Happiness is tucked-away and stored within the gathered fruits of their yesteryears, but available now is an opportunity to decide for themselves what’s next. Reverse Mortgage is more than a loan, it’s a happiness maker. It opens for the borrower a wealth of possibilities, both financially and practically. When a senior exclaims “you’ve helped dramatically change and improve the quality of my life!” there are no words…
Wouldn’t it be something—to discover in your pursuit toward a senior’s rekindled happy place is a reciprocating gift that offers up a renewing of your own?
For additional information on HECM Products, Reverse Mortgage Refinance and alternate JUMBO/Proprietary loan options, reach out to HECM411—we’re happily ready to assist and support you!