Unlock Home Equity With Equity Elite

Unlock Home Equity With Equity Elite

Unlock home equity to achieve your retirement goals

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The Retirement Reality Today, older Americans face a great deal of uncertainty as they move through their retirement. With rising healthcare costs, a volatile stock market and ongoing mortgage and credit debt, it’s not surprising that 87% of Baby Boomers are not very confident that they will retire in a comfortable lifestyle. 1 Many are afraid that their savings accounts, investment portfolios and government benefits will not provide enough money to sustain their changing needs and financial obligations as they age.

The average couple will spend $245,000 4 on healthcare in retirement

The average length of retirement in the U.S. is 18 years 2

Only 10% of older Americans have long-term care insurance 5

Families headed by people age 65–74 owe $65,686 in debt on average 3

1 Source: Campbell, Todd. “9 Baby Boomer Retirement Facts That Will Knock Your Socks Off.” The Motley Fool, 19 Mar. 2016, www.fool.com/investing/general/2016/03/19/9-baby-boomer-retirement-facts-that-will-knock-you.aspx. 2 Source: U.S. Census Bureau. 3 Source: Go Banking Rates. (2018) “The No. 1 Cause of Financial Stress in Every State.”

4 Source: Sandra Timmermann, “Shocks and Loss in Retirement: Preventing Despair, Promoting Resilience,” Journal of Financial Service Professionals 70, No. 5 (2016). 5 Source: Susan Hoover, “Long-Term Care Insurance (LTCI): The Good, the Bad, and the Ugly,” Enterprising Investor blog, CFA Institute, September 19, 2016.

3 | Retire More Freely 2 | Reinv nting Retirement Funding

Rethinking Retirement Planning If you are like most people, retirement planning generally relies on assets such as 401(k)s, IRAs,

Home Equity as a Percent of Net Worth among Homeowners Age 65 and Above

traditional pensions, Social Security benefits, as well as regular taxable savings and investment accounts. But as a homeowner you have another, often overlooked, retirement planning asset: Home Equity . U.S. homeowners age 62+ have more than $9.57 trillion in home equity, 6 making it the largest asset for most households entering retirement. 7 For the average retiring couple, home equity makes up 70% of their net worth—with other assets like IRAs, savings and personal property only making up 30%. 8 With such a large proportion of personal wealth tied up in one’s home, it’s time to rethink how home equity can be used as another tool in your financial arsenal.

Other 30%

Home Equity 70%

NewWays to Access Home Equity Over the last 30 years, reverse mortgages have gained acceptance as part of strategic retirement planning. In fact, a growing number of respected retirement researchers, such as Harold Evensky, Dr. John Salter, Dr. Wade Pfau, and the Center for Retirement Research at Boston College have all conducted numerous studies to evaluate the pros and cons of reverse mortgages for the benefit of consumers. They have concluded that the reverse mortgage is an important option, with multiple uses that can often help older homeowners be better financially prepared in retirement, and avoid outliving their money. 9

“ Several recent research articles have demonstrated how responsible use of a reverse mortgage can enhance an overall retirement-income plan…Reverse mortgages give responsible retirees the option to create liquidity for an otherwise illiquid asset, which can, in turn, potentially support a more efficient retirement-income strategy (more spending and/or more legacy). ” —Wade Pfau, Ph.D., CFA, “Reverse Mortgage Background and History”, Forbes

6 Source: National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI). 7 Sass, Steven A., “Is Home Equity an Underutilized Retirement Asset?”, Center for Retirement Research at Boston College, Number 17-6, March 2017 8 US Census Bureau, “Wealth, Asset Ownership & Debt of Households Detailed Tables: 2015” 9 Salter, John., Evensky, Harold., & Pfeiffer, Shaun. (Aug 2012). Standby Reverse Mortgages: A Risk Management Tool for Retirement Distributions. Journal of Financial Planning,

To learn more, call your local RMF loan specialist | 3

Discover Greater Financial Freedom with Equity Elite ® At Reverse Mortgage Funding LLC (RMF), we recognize that each of our customers is unique. That’s why we offer a full range of powerful, customized options to help you access your home equity and gain a new source of income- tax-free funds. 1 We offer traditional Home Equity Conversion Mortgages (HECMs), as well as our own “private label” reverse mortgage called Equity Elite ® , which may provide certain advantages over a HECM.

n  Available to borrowers as young as 55 in select states. Higher minimum age requirements may apply* n  Loan amounts up to $4 million, depending on your home value † n  Eliminate or substantially lower your current monthly mortgage payment ‡

n  For owners and buyers of approved and non-FHA- approved || condos and homes n  Lower closing costs with no up-front or ongoing mortgage insurance premiums n  Flexible proceed options—lump sum, term payments, and line of credit with growth #

Which Financing Option is Right for You?

YES 62 or older Up to $822,375 HECM Reverse Mortgage

YES 55 or older * Up to $4 million † Equity Elite ® Reverse Mortgage

YES NO No set amount Home Equity Line of Credit

Convert home equity into loan funds? Age-based lending Loan Limit Flexible repayment feature? Minimummonthly payment required? Non-recourse feature (You won’t owe more than the home is worth when the loan is repaid) Income Qualifications Can be used to buy a home?

YES ‡ NO ‡

YES ‡ NO ‡

NO YES

YES

YES

NO

More Lenient YES

More Lenient YES

Stricter NO

1 Not tax advice. Consult a tax professional. ‡ As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance. *Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details. † Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details. || This material has not been reviewed, approved, or issued by HUD, FHA, or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency . # For the Equity Elite (EE) loan option with a growth rate on a line of credit, there is a specific growth rate, such as 1.5% per annum (compounded monthly) applied to certain unused amounts, and a growth rate period, such as 7 years after the loan closes, as stated in the loan documents provided at closing. Also, the line of credit cannot exceed: (1) 75% percent of the original Principal Limit, plus (2) the growth of the available Principal Limit due to the growth rate. ¶ With this pricing option, borrower receives a lender credit covering nearly all closing costs. There is a non-refundable independent counseling fee of approximately $125 on average, which the borrower pays directly to the counseling agency. Terms and conditions apply. Not available in all states. § This down payment range assumes closing costs will be financed into the loan. The information being displayed is for illustrative purposes only. Actual cash required may vary and is based on age of youngest borrower, interest rate, home value, and other factors. Please contact Reverse Mortgage Funding LLC (RMF) for details about credit costs and terms.

4 | Reinventing Retirement Funding

Using Equity Elite ® Proceeds from an Equity Elite ® reverse mortgage can be used in a variety of ways to help you improve your cash flow and gain more financial control. Here are some examples: n  Refinance existing mortgage debt to dramatically reduce your monthly payments n   Consolidate debts such as high-interest credit cards, auto loans, etc. to lower your monthly bills

n Buy a new home that better fits your needs n  Pay for medical expenses & long-term care

As with any mortgage, you will have to meet your loan obligations: Keeping current with property taxes, insurance, and maintenance. Repaying the loan

Usually homeowners (or their heirs) choose to repay the loan balance—which includes any fees that have been added and accrued interest—through the sale of the home. You can also choose to repay the loan with other assets, or by refinancing through a traditional mortgage. As with any mortgage—forward or reverse —you must meet your borrower obligations throughout the life of the loan, including keeping current with property taxes, insurance, and maintenance of the property. In addition, the property must be your primary residence throughout duration of the loan. If any of these obligations are not met, the loan will become due and payable. Equity Elite ® for Home Purchase Many people don’t realize that you can also buy a house or condo with a reverse mortgage by combining a one-time investment of your own funds with Equity Elite ® loan proceeds to complete the transaction. The cash required typically ranges from only 55% to 75% of the purchase price, depending on your age. ¶ Unlike a HECM, seller concessions of up to 6% are allowed for closing costs on the new property.

Equity Elite ® ZERO has the benefits of our Equity Elite ® reverse mortgage but offers a lender credit to be applied towards most closing costs, and may have lower interest rates. §

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To learn more, call your local RMF loan specialist | 5

Example: Meet Anne and Peter, age 70. Anne and Peter’s largest asset is their $5 million home. However, they still owe $500,000 on their existing mortgage, plus another $60,000 in credit card and auto loan debt. In addition, Peter recently suffered an illness and now needs to use a wheelchair. To stay in their home, they need to make $70,000 worth of modifications such as installing a ramp, a stairlift, and new bathrooms. They don’t want to drain their savings and are worried they won’t qualify for a traditional mortgage. Their daughter, Vanessa, encourages them to meet with their financial advisor to learn more about their options. Their financial advisor presents them with the following options: Option 1:

With a standard 15-year jumbo mortgage , 1 Anne and Peter would be able to refinance their first mortgage and take out $130,000 to consolidate other debt at a lower rate, as well as make the necessary additions to the house. However, they would be required to make a monthly principal and interest payment of $5,387 and they are unlikely to qualify for the loan because neither one of them is working . Option 2: Using an Equity Elite ® fixed-rate, lump-sum loan, 2 Anne and Peter can refinance the $500,000mortgage on their home and consolidate the $60,000 debt into the same loan, at a lower interest rate than their previous mortgage. They can also receive $1,716,773 in loan proceeds at closing, which they can use to pay for the home modifications and then have additional funds for any other situation that may arise. Plus, it is generally easier to qualify for an Equity Elite ® loan, which has more lenient income qualifications than a traditional mortgage because it’s designed with the needs of retirees in mind. Most importantly, they do not have monthly principal and interest payments—which greatly improves their cash flow .* The Solution: Their financial advisor arranges for them to meet with an RMF reverse mortgage specialist. They decide to take out an Equity Elite ® reverse mortgage, because they like having the flexibility to no longer make monthly mortgage payments,* as well as the flexibility and peace of mind of having additional funds available if they need them. *As with any mortgage, they must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.

1 For illustrative purposes only. Estimates shown are based on a New Jersey property and a 15-Year Jumbo Refi—with 0 Points at a 3.375 % fixed rate (3.763%APR). Rates fromBankrate.com as of 7/30/2019. 2 For illustrative purposes only. Estimates shown are based on a New Jersey property and the Equity Elite ® product with a fixed rate of 6.925% (7.087%APR), as of 7/29/19. Recent interest rates offered by ReverseMortgage Funding range from5.747% to 7.974% annual percentage rate for fixed-rate loans. Closing costs may include an origination fee, third-party closing costs ranging from$2,131.98 to $35,014.17 depending on purchase price. Please contact ReverseMortgage Funding LLC (RMF) for details about credit costs and terms. 3 According to GNMA >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8

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