October 2016 - Colorado Reverse Mortgage Specialist

Month: October 2016

Does My Home Qualify For A Reverse Mortgage?

Posted on October 21, 2016December 19, 2016 by janjordan

Reverse Mortgages are a specialized loan available to seniors 62 and over. This creative resource is used by a wide demographic – from those looking to supplement a fixed income, to the more affluent in need of protection for retirement assets, and even those wanting to purchase a home in retirement. But there are some requirements when it comes to the actual home…

Which types of homes are included?

According the HUD’s Federal Housing Administration, the home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. Some condominiums and manufactured homes that are approved by HUD also meet FHA requirements.

In the case of a Reverse Mortgage for Purchase, borrowers can use a reverse mortgage to purchase a single family home or 2-4 unit home with completed construction that has received a certificate of occupancy.

Are there reasons my home may not qualify?

A home with very little equity may not qualify, although homes with existing mortgages may.

In addition, homes must be maintained with general upkeep and be current on property taxes and other expenses relevant to the home.

A second home or vacation home may not qualify. The borrower must be living (or plan to live) in the home.

Bottom line

The funds from a reverse mortgage can be accessed via a lump sum, line of credit, monthly installments, or to purchase a home. If you have questions let your specialist guide you in the many scenarios that are possible and the two of you can think creatively about your needs and desires.

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

Why a Reverse Mortgage is a Good Financial Strategy

Posted on October 14, 2016December 28, 2016 by janjordan

Reverse mortgages are available to seniors 62 and over who either have their home paid off or have substantial equity. Certain criteria applies to the home in order to meet HUD’s rules, and although anyone on the loan must be 62 and over, they are available to married couples the same as individuals. The funds available from these FHA insured loans are available in various ways including monthly installments, a lump sum, a line of credit, and as a purchase option. Even with all these funding choices, reverse mortgages are not right for everyone but they are a perfect match for many.

When is Reverse Mortgage a good financial strategy?

Think of reverse mortgage as a financial tool that turns home equity into cash WITHOUT incurring a loan payment, unlike a traditional mortgage or home equity loan. No repayment is due as long as the borrower is living in the home. This also goes for married couples, in which case no repayment would be due until the last borrower permanently leaves the home. The borrower will still be responsible for some things related to the home, such as property taxes and homeowners insurance.

Reverse mortgages are increasing in popularity as more retirement and financial planners are recommending their use as a potential tool. Typically retirement planners have used a three legged stool as an example for their clients – saving, social security, and pensions make up this visual structure. But with changes in the economy and uncertain futures, pensions are disappearing. In this scenario, those who are “house rich, but cash poor” may find using home equity to balance out the stool is a saving grace. In addition, for those secure in all three areas, adding home equity can be used as a safety net or to delay, thus enhance, certain areas.

The reverse mortgage industry underwent some changes last year as legislation was passed making these loans a safer option for both borrowers and lenders. As a result, the reputation that once surrounded the industry has drastically improved and their use is being studied by some of the most prominent retirement experts.

Reverse Mortgage For Purchase – Everything You Need to Know

Posted on October 7, 2016October 13, 2016 by janjordan

Reverse Mortgages, once typically thought to only help struggling seniors, have undergone enormous changes recently and are being used to help even affluent retirees achieve their retirement dreams and home buyers purchase new homes.

The Reverse Mortgage for Purchase program is quickly gaining in popularity. This program allows seniors to purchase a home using a reverse mortgage and live mortgage payment free. To qualify for this program, borrower(s) simply need to be age 62 or older, be purchasing a home to become their primary residence, and have their “required investment”. There are no income or credit requirements and just like with any other type of home loan, the borrower will still be the homeowner and will always retain the title. In addition, similar to a homeowner who owns their home free and clear, there will not be a monthly mortgage payment but the borrower will still be required to pay property taxes, homeowner’s insurance, HOA fees, and basic upkeep and utility payments.

The borrower can use this loan to purchase single family homes, town homes, and FHA approved condos. Unfortunately, these loans cannot be used to purchase homes under construction and the home must have a “Certificate of Occupancy” issued prior to starting the application process.

As mentioned above, the borrower will need to have their “required investment” or down payment. This amount is determined by a calculation set by HUD based on: the lesser of the sale price or appraised value, the age of the youngest of the borrowers, and the current expected interest rate. There are many examples available of these numbers to help real estate professionals and borrowers determine the price bracket they should search based on the required investment they have available.

Unlike a traditional mortgage where the loan reaches a “maturity date”, reverse mortgages have a “maturity event”. This is the event which causes the loan to become due and payable. These “events” include: the last remaining borrower passes away, the homeowner sells the home, the last remaining borrower leaves the home for 12 consecutive months, or the homeowner defaults on property taxes or insurance.

Prior to being approved for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires each borrow to participate in a counseling session with an approved agency. These not-for-profit agencies are funded by the federal government and work closely with both the FHA and lenders to ensure a smooth process. The goal of this session is not to steer a potential borrower in one direction or another, but to make sure they clearly understand all aspects of a reverse mortgage.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.