June 2014 - Colorado Reverse Mortgage Specialist

Month: June 2014

Maturity Date versus Maturity Event in Reverse Mortgage Loan

Posted on June 27, 2014 by janjordan

For many who have had a conventional mortgage on their home, they are familiar with the “maturity date”. But with a reverse mortgage, there is no maturity date, only a “maturity event”. So, what’s the difference?

A maturity date indicates the date which the borrower will make the final payment on the loan, including principal and interest. These are used with conventional mortgages.

A maturity event represents a specific event that takes place in the borrower’s life that signifies the loan has come due. Because reverse mortgage borrowers do not make monthly mortgage payments. many seniors see this as an advantage.

Here are some examples of maturity events:

The property is no longer the borrower’s primary residence
The property is sold or transferred out of the borrowers name
The borrower (or last borrower on the loan) passes away
The borrower moves away from the home for more than 12 consecutive months (such as moving into an assisted living facility)
The borrower fall substantially behind on their property taxes, homeowners insurance, or HOA fees.

A reverse mortgage is available to seniors 62 and over, regardless of income or credit, and this FHA backed loans allow the borrowers to live mortgage payment free through their retirement years.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Longmont, Greeley, and Front Range areas of Colorado as well as Cheyenne and Laramie, Wyoming. Click here to contact Jan and learn if reverse mortgage is right for you.

Why Reverse Mortgage for Purchase is Different

Posted on June 17, 2014June 17, 2014 by janjordan

The Reverse Mortgage for Purchase program is an age-based mortgage insured by the FHA for folks aged 62 and older. Unlike a traditional mortgage, monthly payments are deferred and the loan balance increases over time. Because the loan is backed by the FHA, neither the borrower(s) nor their heirs are personally liable for the debt. There are also no credit or income requirements.

So what does all that really mean?

It’s actually very simple…let’s say you use a reverse mortgage to purchase your dream home and decide to move in 10 years. When you sell your home you will receive 100% of the net proceeds after paying off the loan balance at the time of the sale. This is exactly how a traditional mortgage works.

The primary benefit of using a reverse mortgage for purchase comes into play during your living years in the fact that you are not paying a monthly payment to the mortgage company, thereby increasing your monthly cash flow. The secondary benefit is for your heirs. What if at the time of your passing your loan balance is greater than the value of your home — what happens?

In a traditional mortgage scenario your heirs would be forced to sell the home at a loss and cover the difference. The terms of a HECM program mandates that neither you nor your heirs are personally liable to cover the difference if your home is sold for a loss. Simply put, it’s not your problem and no one is coming after your estate for a settlement.

Click here for more specific details on how the Reverse Mortgage for Purchase program works.

(Information courtesy of Security 1 Lending).

Can Reverse Mortgage Help You Achieve Your Retirement Vision?

Posted on June 10, 2014June 17, 2014 by janjordan

In an era where “retirement” has taken on whole new meaning and commonly lasts for two or three decades, more and more retirees are ready to live the latter part of their life to the fullest. They see this as a time to enjoy life after years of working and raising a family. But in order to achieve these goals retirees need a plan, but first they need a vision.

For those ready to realize their retirement dreams, start by asking some simple questions:

If your retirement could be anything you hoped for, what would it include? Would you buy a vacation home? Move closer to family and grandkids? Take a yearly cruise? Visit Europe? Volunteer with your most passionate charity? By articulating your desires, you can better prioritize your wants and needs, and consider these costs when developing a retirement plan.

Determine other expenditures that may hinder these goals. Healthcare, home modifications and improvements, debt, and other scenarios like this are the most common. These expenses can arise later in retirement, so preparing for them upfront is often an important consideration.

What are the expectations between yourself, your spouse (if you have one), and your family? It’s amazing how often what is assumed and what is reality vary greatly. So many retirees feel they need to hold on to their assets because they want to pass a home or a vast inheritance down to their children, yet their children would much rather see their parents live their two or three decade retirement to the fullest. Make sure the lines of communication are open and no one is afraid to ask tough questions. The answers may be surprising.

No matter what your retirement vision is, reverse mortgage can help you achieve it. For seniors 62 and over, regardless of income or credit, a reverse mortgage can provide funds to achieve goals, frees up those strapped by limited incomes, and even help purchase a new home.