Gefen Financial - New York Mortgage Broker
Content
Reverse Mortgages from Gefen Financial Corp.
Enabling older homeowners to turn home equity into tax-free income.
Gefen Financial Corp
Dovid Winiarz President and Chief Mortgage Manager .... Helping people manage the debt through mortgage and equity financing since 1986
Reverse Mortgage Program
Enables homeowners age 62 and older to tap the equity they have in their home and receive tax-free income No repayment is required until the home is no longer their principal residence There are no income, asset, employment or credit
Some Benefits of the Loan
The homeowner always retains title and ownership of the home Cash advances can be used for any purpose No Fixed Maturity Date Tax-free income will not affect Social Security or Medicare benefits
Eligibility
62 years of age or older (Revocable Trusts, Guardianships, Conservatorships, DPOA’s) Own home free and clear or have a balance that can be paid off with the reverse mortgage Occupy property as principal residence Agree to attend a informational
Principal Residence
The property must be the principal residence of each borrower Married spouses or other coborrowers may be living apart because one of them is in a health care facility; however At least one borrower must be living in the home in order for the HECM to close
Properties Eligible
1 - 4 Unit Dwellings Town homes / Condominiums PUD’s Manufactured / Mobile Homes
(FHA Standards)
Life Estate Leasehold Interest in Property Co-op’s (Pilot in NY State only)
How much can be received?
Age of the youngest homeowner Current interest rate Market value of home County where property is located
Payment Plan Options
Term
– monthly payments for a specified period of time
Tenure
– monthly payments for as long as homeowner occupies the property
Line of Credit
– payments received upon request
Combination of Above
Payment Plan Flexibility
In the HECM program, the borrower may change payment plans at any time This flexibility enables the homeowner to reshape the loan as circumstances change Administrative charge of $20
Settlement Costs
Origination Fee Mortgage Insurance Premium (MIP) Traditional “FHA Allowable” fees
Origination Fee
This fee covers the lender’s administrative costs in processing and underwriting the loan Borrower is permitted to finance a minimum fee of $2,000 and no more than 2% of the Maximum Claim Amount
Mortgage Insurance Prem.
Reduces the risk of loss in the event that the outstanding balance, including accrued interest, MIP, and fees, exceeds the value of the property at the time the mortgage is due and payable
– A one-time non-refundable initial MIP equal to 2 % of maximum claim amount
FHA Allowable Fees
Appraisal Title Insurance Credit Report Recording Fee Termite Report Flood Zone Certification Document Preparation
Adjustable Interest Rate
Set by the U.S. Treasury Securities rate adjusted to a constant maturity of 1 year Monthly (Margin: 150 bps) or Annually (310 bps) Adjustments
Servicing Fee
Lender is permitted to charge a servicing fee Fee is established at closing as a monthly figure (Currently, $30) The amount necessary to pay this fee is calculated and set aside at closing The lender adds this fee to the borrowers outstanding balance
Consumer Protections
Non-Recourse No Prepayment Penalty Three Day “Right of Revision” Advance Disclosures Third Party Counseling
Counseling Requirement
Ensures the participant understands how the program works Examine options other than a reverse mortgage that might better meet the needs of the client Provided by a HUD-approved agency
After Loan Closing
Annual Payment of Property Taxes Annual Payment of Homeowners Insurance Maintenance of Property To Make Repairs, if required
Termination Actions
All the borrowers have died or sold the property Property is no longer principal residence of at least one borrower for a period exceeding 12 months Borrower refuses to fix property in disrepair Borrower violates any other covenant
Recovery of Mortgage Proceeds
When the borrower does not occupy the property for 12 consecutive months Loan must be repaid in one lump payment Usually the loan balance is paid from sale proceeds of the home A non-recourse loan
Requirements for Appraisals
Property must meet Minimum Property Standards for existing properties
Required Repairs (Less than 15%)
Repairs that are estimated to cost less than 15% of the maximum claim amount can be completed after closing At closing, the borrower must establish a repair set aside at least equal to 150% of the cost or repairs, plus a repair administration fee
Tax Effects
Payments received by the borrower are not taxable, as they are loan payments
Limited Liability
The “non-recourse” provision of the program limits the borrowers liability to the net sale proceeds from the sale of the property No deficiency judgement may be taken against the borrower or the estate
Prepayment
The loan may be repaid either in whole or in part, at any time without penalty If the loan is repaid if full, this will terminate the loan and further draws would be unavailable A partial repayment can be used to increase the monthly payment or set up a line of credit (revolving
Effect on Public Benefits
Proceeds are considered a loan and not as income Will not effect Social Security, Medicare or others programs that are not based on need
Enabling older homeowners to turn home equity into tax-free income.
Gefen Financial Corp
Dovid Winiarz President and Chief Mortgage Manager .... Helping people manage the debt through mortgage and equity financing since 1986
Reverse Mortgage Program
Enables homeowners age 62 and older to tap the equity they have in their home and receive tax-free income No repayment is required until the home is no longer their principal residence There are no income, asset, employment or credit
Some Benefits of the Loan
The homeowner always retains title and ownership of the home Cash advances can be used for any purpose No Fixed Maturity Date Tax-free income will not affect Social Security or Medicare benefits
Eligibility
62 years of age or older (Revocable Trusts, Guardianships, Conservatorships, DPOA’s) Own home free and clear or have a balance that can be paid off with the reverse mortgage Occupy property as principal residence Agree to attend a informational
Principal Residence
The property must be the principal residence of each borrower Married spouses or other coborrowers may be living apart because one of them is in a health care facility; however At least one borrower must be living in the home in order for the HECM to close
Properties Eligible
1 - 4 Unit Dwellings Town homes / Condominiums PUD’s Manufactured / Mobile Homes
(FHA Standards)
Life Estate Leasehold Interest in Property Co-op’s (Pilot in NY State only)
How much can be received?
Age of the youngest homeowner Current interest rate Market value of home County where property is located
Payment Plan Options
Term
– monthly payments for a specified period of time
Tenure
– monthly payments for as long as homeowner occupies the property
Line of Credit
– payments received upon request
Combination of Above
Payment Plan Flexibility
In the HECM program, the borrower may change payment plans at any time This flexibility enables the homeowner to reshape the loan as circumstances change Administrative charge of $20
Settlement Costs
Origination Fee Mortgage Insurance Premium (MIP) Traditional “FHA Allowable” fees
Origination Fee
This fee covers the lender’s administrative costs in processing and underwriting the loan Borrower is permitted to finance a minimum fee of $2,000 and no more than 2% of the Maximum Claim Amount
Mortgage Insurance Prem.
Reduces the risk of loss in the event that the outstanding balance, including accrued interest, MIP, and fees, exceeds the value of the property at the time the mortgage is due and payable
– A one-time non-refundable initial MIP equal to 2 % of maximum claim amount
FHA Allowable Fees
Appraisal Title Insurance Credit Report Recording Fee Termite Report Flood Zone Certification Document Preparation
Adjustable Interest Rate
Set by the U.S. Treasury Securities rate adjusted to a constant maturity of 1 year Monthly (Margin: 150 bps) or Annually (310 bps) Adjustments
Servicing Fee
Lender is permitted to charge a servicing fee Fee is established at closing as a monthly figure (Currently, $30) The amount necessary to pay this fee is calculated and set aside at closing The lender adds this fee to the borrowers outstanding balance
Consumer Protections
Non-Recourse No Prepayment Penalty Three Day “Right of Revision” Advance Disclosures Third Party Counseling
Counseling Requirement
Ensures the participant understands how the program works Examine options other than a reverse mortgage that might better meet the needs of the client Provided by a HUD-approved agency
After Loan Closing
Annual Payment of Property Taxes Annual Payment of Homeowners Insurance Maintenance of Property To Make Repairs, if required
Termination Actions
All the borrowers have died or sold the property Property is no longer principal residence of at least one borrower for a period exceeding 12 months Borrower refuses to fix property in disrepair Borrower violates any other covenant
Recovery of Mortgage Proceeds
When the borrower does not occupy the property for 12 consecutive months Loan must be repaid in one lump payment Usually the loan balance is paid from sale proceeds of the home A non-recourse loan
Requirements for Appraisals
Property must meet Minimum Property Standards for existing properties
Required Repairs (Less than 15%)
Repairs that are estimated to cost less than 15% of the maximum claim amount can be completed after closing At closing, the borrower must establish a repair set aside at least equal to 150% of the cost or repairs, plus a repair administration fee
Tax Effects
Payments received by the borrower are not taxable, as they are loan payments
Limited Liability
The “non-recourse” provision of the program limits the borrowers liability to the net sale proceeds from the sale of the property No deficiency judgement may be taken against the borrower or the estate
Prepayment
The loan may be repaid either in whole or in part, at any time without penalty If the loan is repaid if full, this will terminate the loan and further draws would be unavailable A partial repayment can be used to increase the monthly payment or set up a line of credit (revolving
Effect on Public Benefits
Proceeds are considered a loan and not as income Will not effect Social Security, Medicare or others programs that are not based on need
