Reverse Mortgages & Life Insurance: Protect Your Home, Secure Your Legacy

0:00 This program is designed to provide general information Attention individuals, families, and caregivers. It's Medicare Hour and more with Peter right here on K4HD Radio. This is the podcast for all types of insurance solutions while specializing in Medicare.

0:45 Because we Medicare. Here's your host, Peter R. Joseph. Good morning, good morning, good morning. That's great to see you all this bright and early morning. Hope you guys are listening in. We appreciate our sponsors. We appreciate our audience. Just a quick few things. We are live on K4HD radio or K4HD. com. You can also see us on YouTube. Our Facebook page, Joseph Insurance Broker LLC, as well as my personal page, which is public, Peter Joseph. And then the last place is YouTube. Our channel is at Medicare Minute with Peter. So hope to see you guys on one of those venues soon. You can obviously comment on those, and we will respond back. You can also text us real-time questions, and we will respond back in real time, 909-217-2630. We've had some in the past, and so we'd love to hear any feedback or questions that you might have during our show. We've got a great show this morning. Peter Patel is returning. He had talked to us a couple of weeks ago about wills and trusts. He's going to dive into a little bit more about reverse mortgages and why life insurance is essential.

2:07 So we'll be hearing from him in about 15, 20 minutes. So excited to have him back. And we are going to explore a little bit since Medicare open enrollment is just around the corner. October 15th. Yes, it's like a month away, but we can actually talk to you about the benefits for Medicare starting October 1st, which is just around the corner. So we've got some interesting tidbits for you guys that you should be aware of as we approach that date. Just want to share a A little bit about what I did over the weekend. I actually went to a, and most of you probably don't even know who this band is, the Bleachers. Jack Antonoff is the lead singer. He produces actually for a lot of artists like Taylor Swift. But he has his own band called The Bleachers. We saw him at the Troubadour in West Hollywood. It was rocking and amazing. I might show a clip later on. We'll see if we've got time or not. But he was amazing. It was a great venue. Most rock bands don't play small venues like that, and it was just a blast. I mean, you had 300 people packed into a very small space.

3:24 If you don't know the Troubadour band, It is one of those gig places that bands start out at. So that was very cool. Yes, football has started. Yes, my engineer is a big 49ers fan, and he reminded me of the beating that we. Had this last year. Thursday, but hopefully the Rams will get their acts together. Uh, I just think it was stupid of them to show up 28 hours before game time. I mean, I don't know what they were thinking. They definitely looked to sleep out there. Um, most of the game. And then I don't know what's going on with Miles Garrett, the big pickup that we had. And now he has to get surgery. Uh, hopefully that injury was disclosed before the trade, but if it wasn't, um, I don't know what's going to happen there. Uh, Maybe it gets rescinded.

4:11 I don't know. And the other shocker too, you know, basketball season's around the corner and I can't believe that Toronto took Kawhi Leonard after all that baggage and all the Clippers got punished for the trade still went through. And so Kawhi's with Toronto. Good luck to that since the DOJ has started investigation into him. So who knows how long they're going to have him as a player. But anyways, I just thought that whole thing was interesting and, And I'd love to chat with you guys more about that on the side. So please reach out. I'd love to hear your thoughts on that. Anyways, we're going to circle back to wills and trusts. I've got a great commercial for you guys.

4:54 We had talked about this. A few weeks ago with Peter Patel about why it's important for us to have a will and trust. A lot of times the reason we don't want one or have one in place is because it's so expensive. If you go through an attorney, you're looking about $ 2, 500 to $ 3, 000 and people just don't have that money. So we do offer it ourselves, our agency. We offer it for a whopping $ 700. That's it. Yep. And it's a great program. Attorneys have reviewed it. It's legit and walks you through every step of the way. So if you're interested in that, please do reach out. But I want to show you this video of why it's important, what wills and trusts are.

5:38 50% of Americans don't even have a will. This is not something that should fall on deaf ears. I know there's going to be many of you listening today. They're like, I got to get this done. What do I need to know? So we're going to break it down. Matt, let's go hard. Will versus trust. I'll be Matt. You'll be PC. Tell us about the will. You give me that. The will is the PC here, but the boring PC. The will says who gets your stuff when you die. It at least does that. So that's one feature of the will. I can keep going if you'd like. Yeah, you name a few. Here's the other thing that I like about the will is you can designate who is the guardian of your children after you pass away. Really critical for any of you that have minor children to say, who is going to take care of them when I pass away?

6:21 Okay, we'll just rip on the will for a minute. A will can also be holographic. I mean, at the very least, I would recommend all of you sit down this weekend and handwrite out a will, which means holographic. You can't. You know, do it on word processor, print it out. You've got to handwrite it out, get a couple of witnesses, but at least say who gets what, who gets what, who's going to raise my kids. Yeah. What else? Yeah. And even the holographic, I'll say in 46 States, as long as it's in your handwriting and signed by you, you don't even need witnesses, but in the other States you do. Um, here's where the will starts breaking down though. There's not much left. If you want to have a lot of other features and bells and whistles, you're going to need to roll over to the trust. I, after you say who gets what, um, There's not a lot of great features. Here's the problem, though, that most people don't like about the will and why they do a trust instead. You're going to probate with that will. Just because I have a will that's signed that says who gets my stuff doesn't mean we get to go carry that out and do it. You still have to take the will to the judge and get the judge's stamp of approval to say, I approve this will, and they'll issue these things called letters of testamentary that allows the executor.

7:28 Of the will to then distribute the assets. It's public. It's not great. And that probate process is not only going to cost you money, but it's also going to take more time, and it's very inflexible. I like that. One last thing, and I think this is a good transition. Even if you do get a trust, you have to have a will. Yes. A will is kind of the bookend of a trust because we want to designate who the guardians might be, who that executor might be, and then that. Opens the door to the trust. I'm going to riff a little on the trust. I love it. In the back time. The trust, what's nice about the trust, it not only says who gets what, It says when and how. So now we can put on screens, conditions, provisions, and we can really screw up our kid's life after we die as well during our lives.

8:15 Why stop all the fun? So obviously we're trying to protect our kids, right? And that's the purpose of the trust. We want to, of course, designate who gets what so they're not left guessing for those of you who don't even have a freaking estate plan or even a will. But we also want to say at what point do they get it? If you pass on and you have an 18-year-old child, they can inherit your assets. That's kind of scary. And so we want to say, what conditions do they get on? What if they have a drug or alcohol addiction? Do they need to deal with that before they get any inheritance for the trust? What if they are 20 years old? Do you want them getting a third of your estate if you have three kids? No, absolutely. And I know many of you are either single and no kids. And the trust gives you a lot of creative options. You can create your own charity within the provisions of a trust and.

9:04 Say, here's where I want my assets to go. I want my trustee to create a charity that does the following, or I want them to find a charity that does this, or I'd like to leave my money to some nieces and nephews. I want to do this. I want to do that. This is your chance to write your book of where all this legacy goes, like all this hard work and money goes, and the trust allows you that flexibility. Now, back to the probate. I've got to have lawyers involved with the trust, right? And it's going to cost a ton. Yeah, just at the front end, just for a little bit to get the plan and the trust done. But the nice thing is, is once you pass on, that trust lives on. The trustee of the trust, we'll talk about here in a second, gets to carry on. You don't need to go to a judge. You don't need a stamp of approval. The trust carries on and all the conditions and restrictions you put in there are what's going to protect your assets and your loved ones so that this legacy that we're trying to create, it's business owners, entrepreneurs and people trying to build and grow wealth. We want to have a legacy. And if you don't plan for it, and not only the who, but the how and under what conditions, you leave a disaster in instead of a legacy. So all this how is really important, but I'll say one other thing that I love about the trust.

10:17 Oh, okay. Keep going. I just want to. Be a Mac too. I got one too. All right. Maybe an iPod. Jeez. I mean, come on. You go for it. It's private. Oh, I was going to say that. Yeah, I'm going to take that now. Yeah, the trust is correct. Isn't this fun? You never thought it would be this fun listening to Trusts and Wills. What's cool about a trust is you get to give it an innocuous name. I'm going to call it the Green Tree Trust, the Blue Sky Trust. And on a lot of the property you hold, it could even be brokerage accounts, crypto, or other things, not just real estate. You're not going to have your name out there, and when you die, your will is not public.

10:57 Robin Williams, who passed away a few years ago, all he had was a will, and it's been in court. Everybody got to see his assets and how many assets he got, and who did he leave it to and not leave it to, and what kid was disinherited. Do you want that after you pass away? I don't think so. Maybe some of you. The nosy neighbors and all your other family members and some of your haters. I don't know. The ex-spouse, whatever. Do you really want them all digging into that? No, you don't. So let's get in a trust that stays outside of court. And also I think it's less contestable because of that because in the probate process, there's like a contest period where someone could come in and be like, oh, they promised me this. But a trust is out of court.

11:39 It's a lot more private. It's a little more chill. Yeah. Now, let's just talk about price for a moment. We talked about the will being simple and easy. I mean, heck, you can even do a holographic will on your own. So that's very, very affordable. But it's a myth. The trust has to be really, really expensive. You might see places out there charging $ 5, 000 or $ 10, 000. And they kind of base their price based on what your wealth is. But you don't have to be rich to have a trust. In fact, many, many people need it just with having some life insurance and a home and some family or not. And so the price point could be around $ 3, 000. We have a special every year to bring that down, usually throw up to $ 500 off. And we want to make sure it's easy, simple, and affordable.

12:20 And once you get that estate plan done, keep in mind, it's done. You don't have to do an annual fee. You only need to go back to it when you want to make a change. And this is a revocable trust. Don't do these irrevocable trusts you see on TikTok. Those are BS. You need a revocable trust. That's what I have. That's what Mark has. That's what we're doing for 99% of our clients. And we can change it whenever we want because life happens. You might need to disinherit a kid. You might have a kid that gets divorced. You might get divorced yourself. You might get remarried. Your financial situation might change and you might not be willing to give so much to charity that you were before. Who knows? But the nice thing about these trusts is it can be changed in an easy amendment. That can be very inexpensive and cost you only a few hundred bucks to just change little provisions here as you need.

13:02 Well, thanks so much. I hope you loved this quick little summary on the difference between a will and a trust. Please see down below a link to our website where we have lawyers to help clients all over the country. Very personal. We're just a little boutique firm, and we've been doing this for years, and we love helping people build their legacy. Yeah, and just remember, if you don't have an estate plan, you're planning for disaster. That is your plan. For those of you who don't have a freaking estate plan in place, you haven't gone through this process, we're here to help you take care of it. All right, so.... Just a little bit of a tidbit, again, on wills and trusts to give you guys an idea of the differences between them. Obviously, we're doing this to avoid probate, right?

13:51 Because that can get pretty expensive. We want to make sure we lay out who gets our assets. And again, they saw from that commercial that they're charging. $ 3, 000, $ 2, 500. They say they get $ 500 off. which is very expensive. And so again, you can do it through our agency. If you're listening in today, you can do it for $ 700. So just let me know that deal ends by the end of today. So reach out to us and let us know if you need some help putting a will or trust in place. All right. So our guest, Peter Patel, is in the house. Let's welcome him in.

14:32 Hey guys good morning hey peter how are you my friend. Uh mirror to mirror peter to peter good morning. Yes yes it's good to see you again we had an amazing medicare 101 this last week i appreciate your all your help and you did a great presentation on wills and trusts i'm sure you got some bites too of people interested in that absolutely absolutely yeah All right, so Peter is returning again. If you don't know, Peter Patel is a financial advisor. He does Wells and Trust. He's also a realtor. He's a one-stop shop. This guy does a lot for our community. He's amazing, and I'm really glad you're back. I know you sent me a couple of PDFs, so I don't know where you want to start.

15:17 Yeah, so first of all, I appreciate the introduction very much. Not only that, I appreciate our friendship more than anything. And you know what community should always be first, uh, anything we do in life, we have a wealth of knowledge, but in order to share that knowledge, I think is the most important thing that, you know, God is good to all of us and therefore we should help everyone as we can. Um, and yes, my background, yes, I do own a real estate company. I own a mortgage company, financial advising, et cetera. So somewhat of a one-stop shop when it comes to finances, and some of the biggest decisions that you're going to make in life.

15:59 That's great. So today's topic, I sent you two slide presentations. One, I'm going to talk about reverse mortgages, something to do within the mortgage industry, and something that one should consider at any age, whether you're currently in the senior age or coming towards the senior age, or something to think of in the future, should that be the need as well. And then the second topic I'll touch on real briefly is the need for insurance, the need for life insurance. Okay. That's great. And those are the things we've been sharing on our show week in and week out. So let me, I'm going to bring up your reverse mortgage slide here. Great, great.

16:41 How much time do we have today, Peter? So we have about 30 minutes. Okay. More than enough. Thank you. All right. So give me a sec. It's just uploading right now. Absolutely. There we go. Wonderful. Wonderful. All right. So good morning, ladies and gentlemen. Thank you so much for joining us this morning. And thank you, Peter Joseph, as well, for not only everything he does for the community and the wealth of knowledge he brings to the table, but to have this wonderful medium, to share these valuable informations that are very critical to many people's lives. And if this topic or anything that is discussed today is maybe not in your realm, please share this information, please share our information and maybe we can help somebody else in the future as well. Again, this is purely for information purposes that we are not here to sell any products, any solutions in any manner whatsoever.

17:46 That is your decision to look around. I honestly say that always, always, always look for different options everywhere. Get quotations from different options, and then you can make a wise decision accordingly. All right? All right. Yes. So today's topic is reverse mogis. So what we want to do is you want to consider that in retirement, reverse mogis are primarily for when you are in retirement. And therefore the considerations to look into is longevity, your lifestyle, and the liquidity portion of things. So in the next slide, you can see that for longevity, we have to make sure that we have enough money to meet our basic living needs. It's absolutely essential. Now we all know that rate of inflation Calculation of 4%. There's actually something called the rule of 4%. Very, very important in financial analysis and understandings for the future of how we calculate that.

18:55 Then there's the lifestyle section. Will I have enough money to maintain my standard of living? Now, we have worked very, very hard over the years to maintain a certain standard of living. And hopefully we cannot diminish that in any way, right? The best thing is to increase that lifestyle. Right, Peter? Yeah, no, exactly. Yeah, absolutely. So I think that's extremely important. And then liquidity. Would I have access to tax-advantaged money when I need it? And that's obviously a very, very big topic that, Peter, you yourself deal with a lot of Medicare individuals and also in the life and health insurance space. And so retirement planning is one of the most essential elements of our journey through life. Sustainability is always going to be there.

19:50 We need sustainability and so on. So the topic of reverse mortgages, how do they work? Uses of benefits. And you can see here that that beautiful picture of the house is what we have really attained over the years. And the goal is to use those protections and live in that beautiful house and, um, you know, benefit from everything towards that you've done. So, uh, in our next slide, you can see that the benefits for a reverse mortgage, uh, a few there's low risk. It's actually government insured and it's called, it's a non-recourse, uh, loan as well. What non-recourse means is that there is, um, No obligation at the end of the term for this reverse mortgage. And there's no penalties in other situations that are involved in there.

20:46 Funds are non-taxed. Consult a tax specialist. I do advise you that because everybody's tax bracket is different. But these funds are typically non-taxed as well. And you can use these funds for however you choose. I'm going to delve into a little bit more about the schematics of the actual processes of the reverse mortgage and the actual loan structure as well, right? Okay. The big one, there's no prepayment penalty. So should you wish to sell the home, should you wish to refinance in a different element or do any other transaction in this, the loan has no prepayment penalty. Very, very important. Now, I do want to stress here as well that this is obviously a government-backed loan And they truly care for the seniors and make sure that they're protected in many facets when they do these large purchases. And if you think about it, it's a large purchase, right? Yeah. What is the biggest debt, Peter, and audience, what is the biggest debt we have in life?

21:50 Mortgage. Mortgage. If you have a house, obviously, God willing, it is the mortgage. And you'll find... that the second largest debt that we typically have, apart from loans, is a car payment, right? Yep. Car payments, obviously we have credit card debt, but even those minimum payments are less than a car payment, depending on what type of luxury you like to drive, right? Right, right. Mr. Peter Joseph in his Mercedes kind of thing. Right. So, yeah, it's dependent upon that. But, yes, so it's very important to understand that with the largest, let's say, debt that we have in life or largest liability that we have in life, that we have a true understanding of that. So any of you guys have any questions regarding that, obviously you can do that. And then, you know, the most common uses, as Peter has shown here on the slide, is to eliminate a monthly mortgage payment. Now, this is the most important feature of a reverse mortgage, that you do not need to make any, any payments on that mortgage. You also could have a mortgage and a line of credit or just a line of credit on the property as well. And you can actually use this reverse mortgage to actually purchase a home as well. Now, when I say eliminate the monthly mortgage, it's true. You

23:21 do not pay any... of the mortgage fee, the actual principal and interest payment, but you do have to take care of the taxes, the property taxes, and the home insurance. And that is one of the criteria of a reverse mortgage. Does it matter where you're at in your mortgage payments when. You do a reverse mortgage? None whatsoever. What do you mean by where you're at? Well, like, you know, let's say you've got a 30-year loan and you do this towards retirement and you've got about. I don't know, seven years left on the mortgage. So.

24:05 Because the element here is that you want to, if you were in this scenario of seven years left, you obviously have a slower balance, correct? Right. But the situation here is that, okay, I've got a lower balance, but I don't have enough for the rest of my years. But I have a lot of equity. The thing is, if I have an equity position, that's great. My income's a bit limited. So therefore, the utilization of reverse mortgage would be that I can leverage that equity position to a certain degree. Let's, let's throw an example here. Let's say you need 200,000 in that equity position. You have 500,000 that's sitting there, right? So we can leverage 200,000 to begin your journey in these years to come. Correct.

24:51 And then that 300,000 can be a line of credit that just sits there whenever you need it. So you don't have to re reverse the mortgage. If you see one, you don't have to finance it. Right. So it has these wonderful benefits. And the line of credit is sitting there free. There's no charge to it. It's like a credit card. You use it, you know, you utilize it, correct? Right. But there's no payments involved whatsoever. So that's the beauty of it. Now, there are some other common uses as well of this. In the next slide, you'll see you can consolidate your debts, as I mentioned, and pay off debt. That's one of the uses you can do. supplement your monthly income, as I just mentioned briefly, retirement planning tool, remodeling, home repair or maintenance. obviously later on in life, we now have a comfortable home, but let's get the latest technology upgrades and then live our lives with a better surrounding.

25:51 As you know, the missus always wants a new. Kitchen, right? My friend. Right. Yeah. Most important thing. Oh my God. It's the number one item. Would you believe it's that remodeling of the kitchen? Um, and then obviously you've got the bathrooms and paint and so on. Um, I do, you know what, one thing in my, in my, um, you know, history of mortgage on, I get many people say, well, I need the money to make a pool, a swimming pool. Okay. No, it's not the best of decisions. If one looks at it, right. Uh, they're quite expensive. Now I'm not saying don't do it obviously. Um, but utilization of that, when you, you get a commodity that is, it's a luxury item, by the way, I'm also Lex license appraiser as an ex license appraiser, just share something real quick. When you have a house that has a pool, and doesn't have a pool, we have to adjust. Now, if you paid $ 80, 000 for a pool, right, guess how much me, and you could have had it last month, last year, it was installed, right? As an appraiser, I have to adjust the difference. So the house that didn't have a pool would get $ 20, 000 more added to the pool.

27:04 That's it. And you spent 80 grand, right? Right. People think there's value in it. It's a luxury item, unfortunately, right? So something you don't want to take out of a mortgage. That's what I'd say. Okay? You're drowning yourself. Hint, hint. Well, and then I'm sure any renovations you make, that's going to change. Your property taxes, right? Actually, no. No? Okay. I thought it doesn't get reassessed or anything like that? No, so when you do remodeling, home repair, none of that took place. The only thing is that, no, there isn't.

27:46 Even if you go to the county and you do some plumbing, electrical stuff, that's fine. Now, if you make an addition to the home, legally permitted, yes, that's a great question, my friend, that you are subject to it because now you have a bigger home, and therefore... taxation is based upon taxation based on the valuation of a home so the bigger the home the more the value. Right that makes sense and stuff like that. Right so yeah helping long-term and in-home care sometimes obviously we need that you're the expert in medicare and you know the what what is available in there but sometimes we may not have enough to sustain those things when we're disabled etc right you can create a crash reserve for emergencies so that's always there and uh funds for travel, recreation, purchase home. You can also downsize, right? Move closer to homes and stuff. So that's the most important thing. Now, what is a reverse mortgage? It is a home equity conversion mortgage. It is known as a HECM. We use the word HECM as an acronym for that, or in this case, a reverse mortgage. A unique loan that enables senior homeowners, 62 plus, very important age here, 62 plus, to access the equity in their homes without having to sell the home, give up title, or make monthly mortgage payments. Now, you must occupy this home and it's only for primary

29:17 residences as well. And again, as I mentioned, you've got to maintain your property taxes. If you live in a community which has HOA, you have to maintain the HOA fees as well. Okay. So, we have to maintain, obviously, maintenance is the most important thing there. So, eligibility, as I mentioned, 62 plus primary residence, financial assistance, assessment, willingness and capacity. Now, what we look at here is that in a reverse mortgage, income really isn't a factor. But they will ask to see what is the basis of the income. Is it a pension? Is it dividends? Is it Social Security? And so on. And we obviously the government and this program wants to make sure that you can also sustain yourself, that you're not taking out money to sustain yourself, right?

30:09 The second element, as I mentioned, is that you have to kind of show the ability that you can pay those property taxes and that homeowner's insurance or that you have sufficient savings somewhere else to do that. Now, you could have enough savings, retirement and so on and money coming in where you just want to now alleviate the mortgage payment only. And so that's a wonderful solution there for that. The responsibilities of a borrower, as you can see, is to live in the home as a primary residence, pay your taxes, et cetera. The benefits, age of the youngest borrower on title, appraised value of the home, current expected interest rates, and the product chosen. So we determine these different, different elements of this. Now, it is based on the youngest age of the borrower on title. If on title, you are only Peter Joseph, but it's a husband and wife application, then we have to look into it.

31:12 We may have to change the title to a joint title, et cetera. The appraised value of the home is very, very important, obviously. And then what we do is based on the age and the valuation, the amount of loan that you have, there are tables. and there's a calculation of what the different interest rates are available, and what's called the loan-to-value. And that's the most important element of reverse mortgages, the age and the value determines the loan-to-value. I.e., if you have $ 100, 000 of value in a home, they will determine that you can use 40%, 50%, 60%, of that value, which is your loan limit. So I use the simple example here, right?

32:01 40%, 40,000, 50% 50,000. So if your mortgage is 40,000 and they allow you 50,000, then you have right. 40%, 50%. Then you have $ 10, 000 in this simple example as leverage to take out on pay off your 40,000 mortgage, get a new mortgage for 50,000. not pay any more views whatsoever, but have 10,000 in your pocket. Add a zero, it adds the big number, right? Right. So simple explanation there. And receiving the benefits, any combination of a lump sum, monthly payment, 10-hour payments, or a line of credit. There are different ways that we can help the consumer how they want to receive this. Now, there are also some safeguards in reference to this. Borrowers are, in the next slide you'll see, the borrowers are protected by a wide range of safeguards. make HECM one of the safest options out there. And it is regulated by HUD, Department of Housing and Urban Development. And these include the non-recourse that I mentioned. The homeowner retains title to the home as long as the loan terms are satisfied. So many people think that, oh, I'm giving my home up to the government. So no, you have full control of the home whatsoever. The homeowner estate is entitled to remaining equity.

33:27 Third-party counseling is mandatory prior to application. So this one here is that you have to do mandatory third-party counseling when you want to do a reverse mortgage. Once the counseling is done, there is a seven-day waiting period before an actual application can take place. So the counseling is typically around $ 100 that you do have to pay as a consumer And then there's a certificate. And that certificate is then used by the mortgage company that you choose in order to take the application and further the process. Okay.

34:09 Equity line cannot be canceled, frozen, or reduced. So when you do get this loan and you take a first or line of credit, that modification there applies. And the line of credit grows regardless of the home value. So it increases because there's lots of equity based in them. In the example I gave you, 50%, there's still more equity there available. So it can increase accordingly with that. Now with reverse mortgages, Peter, there are many myths and there are also facts involved as well. So I just wanted to share that with your audience as well, because there is many connotations out there. It's a bad loan.

34:52 It's a bad loan, right? So one of the myths is that the lender is on title and owns the home. As I mentioned earlier, and you can see here, the lender's not on title, right? You have full control over it no matter what. The second myth is that the funds received from a reverse mortgage are taxed. It is a 100% non-taxable event. Okay? All right. So there's no income tax involved here whatsoever. It's your hard-earned equity that you have built on that. Myth number three, reverse mortgages are risky and the funds are not guaranteed if something happens to the lender. That is not true as well, as you can read here. It was in place in 1988. It's now one of the most safest and regulated mortgages available. And it's also insured by the Federal Housing Association as well. So it's one of the good things. Myth number four, borrower can end up owing more than the home is worth. This is a non-recourse loan.

35:53 The loan is not secured by assets other than the home. If the borrower was to owe more than the home is worth when the loan becomes due, an FHA managed insurance firm will cover the shortfall to the lender. Now, how beautiful is that? Wow. Yeah. Hopefully 2008 doesn't come back again. I don't think it's going to happen. One of the beautiful things about California, Peter, with my 30 years experience in mortgages and everything, is that we have a very good state when it comes to valuation equity building, right? It's our location has a great equity building worth as well.

36:36 So we're fortunate that we may not see this unless there's a real estate bubble bust, a big one. And it has to be pretty big. So I don't think that. Myth number five is that when a reverse mortgage becomes due, Either the lender takes or sells the home and the heirs lose everything. Your family uses everything. Nope. They still get the inheritance of the home. The balance obviously has to be paid off and it all remains absolutely fine as well. Number six is that if a borrower outlives their life expectancy, the lender will kick them out of their home. I don't think so. You won't hear Peter Joseph knocking on your door as part of the lender. A borrower cannot outlive the reverse mortgage. A borrower cannot be forced out of their homes as long as they pay, as I mentioned, their property taxes, home insurance, and maintain the property as their private residence. Now, one question here is maintain the property. You want to maintain the property. There's no inspections that take place and so on.

37:44 but there is a possibility that an inspection can take place. Can you just give me one second, please? Yeah, of course, of course, of course. I apologize. Thank you so much. No worries. You know how that is, home offices. Oh, yeah, of course, of course. Myth number seven, you can never get out of a reverse mortgage. No, a reverse mortgage has no minimum term, no premium penalty, as I had mentioned before. And myth number eight is that a reverse mortgage can impact my Social Security and Medicare benefits. This is your topic, Peter. Yes, it is. It does not affect us, right? So another beautiful element about the reverse mortgage. So those are the myths that are, you know, and some of the facts that are there.

38:43 Okay. Now, a reverse mortgage, as you can see here, since 2009, reverse mortgage can be utilized to purchase a primary home, assisting borrowers in downsizing, moving closer to family, or moving to a more desirable community. One of the things about this also is as we age is that, you know, we may have been living in a two-story home, family, children, and so on. But later on, those steps can be a little bit, you know, traumatic. So moving to a single-story home, moving to a smaller home, closer to family, you know, those are typically the most advantages of either downsizing, purchasing a new one, moving, et cetera, right? So compared to the cash and traditional financing, you can see here, it increases their purchasing power. You can reduce the out-of-pocket expenses as well. Obviously, cash flow can be increased as well.

39:42 And this is all in your hard-earned equity that you've built over time and keeping everything liquid accordingly. Um, the biggest one in a reverse mortgage, the ultimate one is the fact that you do not have a mortgage payment. Right. And I think that's most important for many, many people here as well. Um, and you know, that's kind of almost the end of my presentation here. Um, obviously, uh, how, how can I do this? So are you eligible? How much is available? Can you get a quote? What are the terms? can I use a reverse to purchase a home? So if you have any of these questions, uh, eligibility, how much is available? As I mentioned to you, I'm an ex licensed appraiser. So just by an address, I can give you an analysis of what your valuation of your home is. Um, cause I have a number of tools to look at for data. Um, obviously I'm not going to see your home, but based on data and obviously a condition of the home, we get a valuation. And, and so, um, I'm located here right in the same city as Peter Chino Hills. I'm sorry, Chino. And I do reverse mortgages in the state of California. So my license is in California only. Okay. And so I'm not in any other states in reference to that. But starting next week, I will have an opportunity to reach out to other states as well. I'm working on another derivative

41:13 for that. Okay, great. Yeah. Any questions, Peter, so far that we can maybe help the audience with? No, I think it's a wonderful tool. Would there be any reason a person would not do a reverse mortgage? Reason not. Well, one of the reasons I would say is that if you have enough income coming in, enough liquidity, then you don't want to consider mortgage. If you feel that what you have definitely coming in can sustain and carry on paying the mortgage. Right. I would also say that, um, most people have leveraged their mortgage again and again, which is a great thing because they also need to put out money for renovation, so on, or they've also helped their family and their children to get into a new home by giving them some money for down payment. But now they have that they've refinanced into a new 30 year loan, right? And they're at an age, so at the age of 62, 65, and you still have 20 odd years to go, 15 years to go. Remember, you're aging as well, and maybe that income will stop, or maybe you're still working, but then you get reduced hours due to disability or so on, or the company's downsizes and so on. So this is a great tool at that age of about 62 to.

42:41 Consider your options and consider your longevity in life to what you want to do. Yeah. I mean, I, well, yeah. Cause the thing I was thinking too, is cause we run into a lot of clients who have spouses who aren't 65 yet. And so what they run into with Medicare is that their spouse can't get on Medicare yet. And so they end up having to sign up for what's called Obamacare or Covered California and And those rates are very, very expensive if you are age 62 to 64. Wow, really? Yeah, I mean, it's through the roof. And so that's another huge expense that people are just not aware of that comes up. Wow, I didn't know that. Yeah, so I mean, this might be a scenario, too, that could help them for sure.

43:31 Absolutely. And, you know, like I said, both you and I, We are community people, and consultations are absolutely free. We don't charge for these. Some companies do, or they give you a quick five, ten minutes and stuff, right? I will give you all the time that you need. I will analyze whatever you need to make the wise and smart decision. There's no pressure whatsoever in any of these elements. And the other thing is this, okay? Cost, right? There are no out-of-pocket costs for you. per se in general. Okay. You do have the cost of that certification, as I mentioned, maybe up to a hundred dollars. Okay. You may have the cost of paying for that appraisal. Typically nowadays it's gone up a little bit. So it's between six to $ 800.

44:23 And then you may have the cost of the credit report. It's gone pretty expensive right now. It's about $ 200 for a joint credit report. Right. So, Just to let everyone know, all the other fees of an escrow title, et cetera, are rolled into the loan and covered by the mortgage itself. Okay. Good to know. Yeah. Good stuff. All right, my friend. Well, we are close to time. So I know we had another topic in mind. Let's definitely push that off because you're always invited to our show. Appreciate you. And there's Peter's information. If you have any questions about reverse mortgages, please reach out to him. His email is there as well as his telephone number.

45:11 And I take text messages as well. So if you want to be private and you want to just text, it's absolutely fine. That's awesome. Well, Peter, my friend, thank you so much for joining us this morning. I appreciate you, my friend. Blessings. And I'm sure we'll talk again soon. Very soon. Yes. Thank you so much for this opportunity, Peter. And I look forward to next time. Anytime, my friend. Take care. Bye bye. All right. So I appreciate Peter so much. He's got a wealth of information. You know, he shared about wills and trusts, and now he has shared about reverse mortgages. I love what he had to share this morning. It's definitely a tool that you can use in your back pocket if you are looking for cash flow as you're getting closer to that retirement age. With Medicare open enrollment around the corner, the tidbits I wanted to share with you quickly are, I know we only have a couple of minutes here left.

46:11 The first thing is, you got to make sure you are reading your annual notice of change, they're called ENOCs. You're getting them in the mail as we speak. Do not throw those away. Read them. It talks about your benefits for next year. It will let you know if your plan is leaving the market. And if it is, I'm the person to talk to to get you to the right course of action and the right plan. So there are many plans leaving the market. We're supposed to have... Close to 700,000 people affected this year. So it is going to be substantial. We are going to have a crazy open enrollment this year again. A lot of disruption, but don't worry. You're in good hands with our agency, as well as a lot of my colleagues out there that have been on the show. Please reach out to one of us to make sure you're on the right path. Again, October 1st is the first day that we can start talking about the plans that are leaving the market and the benefits for next year.

47:10 So please get with us on that. The next thing is the most important thing. Your Part D plans, the premiums are probably going to go up for next year. So you want to shop that around. Your prescriptions are also going to increase in price most likely because the government has stopped the subsidies for Part D. So definitely get with an expert like myself to walk you through the different costs on that. Last thing before I leave you guys, I am going this Saturday to Not Scary Farm. I am taking 10 high schoolers, 10 teenagers, including my daughter. Hey, if you want to join me, I've got a ticket for you. I will buy your ticket. You can text me here, 909-217-2630. I am serious. We could hang out while these high schoolers are running rampant and not scary farm.

48:05 That's not your thing. I understand. Yes, I'm a little crazy to do this. I've had experience being a youth pastor in the past. So Trust me, this will be fun. I'm excited about it. I'm excited about hanging with my daughter and her friends. But hey, if you want to come with me, there's the number. You just text me and I will buy your ticket. But anyways, yeah, that is this Saturday from 7 p.m. To 2 a.m. So let me know. Again, I'm based out here in Chino. So if you live close by, hey, I'd love to have you come with me. On that note, we thank you so much for listening in. We thank you for all our sponsors, which you will see at the end of our show when we close out. We wouldn't be here today without those sponsors.

48:49 So thank you. Thank you to our audience for always listening to us and supporting us. We do this for you guys because we Medicare. Thanks for listening. Tune into Medicare Hour and more with Peter every Tuesday at 9 a.m. Pacific Time right here on K4HD Radio at K4HD. com for more real-life stories from experts who Medicare about you and protecting your health, your finances, and your future. see you next week