Category: Quick Facts

Here’s How To Know If Your Home Qualifies For A Reverse Mortgage

Jan Jordan Blog : Reverse Mortgage Loveland Fort Collins Greeley Longmont ColoradoReverse 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.

Tips for Selling an Inherited Property

reverse mortgage loveland fort collins greeley longmont westminster coloradoSelling an inherited home can be one of the most difficult situations for both realtor and seller. It can be an overwhelming experience, filled with emotion and lots of questions.

While talking about it is hard, it is smart to be prepared. This includes having conversations as a family to determine who will be included in the will to inherit the home, where the deed to the home is kept and where other paperwork is located.

It’s important to remember that each situation is unique, but regardless of the individual situation there are certain ways you can plan.

Here are four tips to help prepare to sell an inherited home:

Work with a Strong Team of Professionals

This is not a task you want to take on alone, and in addition, you want to work with people who are skilled in this area.  This will include a real estate agent, estate lawyer and potentially a tax specialist.

A real estate agent can offer crucial, local market information that is helpful if the heir does not live nearby.

Lawyers and tax specialists can help with important information such as how it will affect the estate and the tax implications the heir may face due to the sale.

Get Organized and Do a Walk Through

Going from room to room and looking at everything from the condition of the floors to how fresh the paint looks can help determine what may need to be done to the home to help it sell quickly.

If the inherited property is older, a home inspection is important before making any decisions as there may be certain systems that need renovations.

Equally important is to gather all of the necessary paperwork such as the deed to the home as well as researching whether there are any mortgages on the inherited property that need to be paid.

Even if the original mortgage was paid off, a reverse mortgage may have been negotiated to help cover expenses. Also look into local property taxes and when they were last paid.

Get the Home Appraised and Price it Correctly

A real estate agent can also provide counsel on an appropriate listing price to match market value. If the heir happens to live out of town, a real estate agent can offer direction to competent inspectors to complete the appraisal, as well as other professionals to assist in the home selling process.

Consider Staging and Cosmetic Improvements

It’s not uncommon for the interior of an inherited property to be outdated.  Staging and making cosmetic improvements can really make a difference in these situations. 

If you’re not sure staging is necessary, ask your real estate agent.  They have a good pulse on similar homes on the market, when you may not. They may also suggest making home design improvements such as repainting rooms and/or landscaping.

Other points to consider are landscaping and the exterior of the home.  Even if the inside is top-notch, don’t make getting them through the front door a challenge.

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

A Look At Data and Housing Desires of Retirees

reverse mortgage loveland fort collins greeley longmont westminster coloradoIf you find yourself yearning for a retirement of comfort in your own home in a community you love, you are definitely not alone.  Here are some pretty telling facts and statistics surrounding the desires of older adults in the U.S..

According to research by the American Association of Retired Persons (AARP):

  • Nearly 90 percent of seniors want to stay in their own homes as they age.
  • Even if they begin to need day-to-day assistance or ongoing health care during retirement, 82% would prefer to stay in their homes.
  • Most pre-retirees expect they will be able to live independently during retirement; only 14% expect they will need day-to-day assistance or ongoing health care at any point during their retirement.
  • Thinking about parents’ getting older is on the minds of 88% of adult children.
  •  75% of adult children and 69 % of parents think about the parents’ ability to live independently as they get older
  •  AARP identified housing features that seniors find are especially important in the later years: 

    – Safety features such as non-slip floor surfaces (80 percent)

    – Bathroom aides such as grab bars (79 percent)

    – A personal alert system that allows people to call for help in emergencies (79 percent)

    – Entrance without steps (77 percent)

    – Wider doorways (65 percent)

    – Lever-handled doorknobs (54 percent)

    – Higher electrical outlets (46 percent)

    – Lower electrical switches (38 percent)

From the National Assocation of Home Builders:

  • 75% of remodelers report an increase in inquiries related to aging in place.
  • The NAHB predicts that aging in place remodeling market to be $20-$25 billion.  That’s about 10 percent of the $214 billion home improvement industry.

According to the MetLife Mature Marketing Institute:

  • 91% of pre-retirees age 50 to 65 responded that they want to live in their own homes in retirement.  Of that group, 49% want to stay in their current homes, and 38% want to move to new homes

Whether it’s the desire to simply stay put through retirement, or to make modifications to the home, or even to purchase a new home, a reverse mortgage is a flexible tool to help finance any of these.  

Reverse mortgages are available to homeowners 62 and over, including married couples, with many protections in place to ensure borrowers are adequately educated before using this option, such as required third-party counseling.  Reverse mortgages are gaining in popularity among retirees from all walks of life.  A reverse mortgage for purchase option is available for those looking to purchase a new residence.

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

How Does a Reverse Mortgage Affect My Taxes?

reverse mortgage loveland colorado fort collins longmont greeley boulderThere are many differences between a reverse mortgage and a traditional mortgage – and taxes are a big one.  Here’s a run down of what to expect come tax time if you have a reverse mortgage.

The Tax Liability Issue

Because any funds you receive from a reverse mortgage are essentially an advance on your home equity – equity you already own and have paid for, the IRS does not consider money received from a reverse mortgage as income, they consider it an advance, therefore it is not taxed as income.  This is the case regardless of how you receive the funds – whether monthly installments, a line of credit, or a lump sum, you will never pay income tax on this.

What About Deductions on Interest?

Here’s one situation where there is a stark difference between a traditional mortgage and a reverse mortgage.  With a traditional mortgage interest and fees paid are tax deductible every year they are paid.  This is still the case with a reverse mortgage, except in the scenario of a reverse mortgage the interest is not paid until the loan comes due, therefore it cannot be claimed as a deduction until this point.  The loan comes due if the borrowers sells the home, passes away, or permanently leaves the home.

Property Taxes

With a traditional mortgage, property taxes are often taken care of by an escrow service.  With a reverse mortgage the homeowner is 100% responsible for making sure these property taxes are kept up to date.  If there are financial concerns about the ongoing cost of property taxes, discuss this with your reverse mortgage specialist.  In the new financial assessment there are options to help set aside a portion of the funds to cover ongoing expenses such as property taxes and homeowner’s insurance.

Reverse mortgages are available to homeowners 62 and over, including married couples, with many protections in place to ensure borrowers are adequately educated before using this option, such as required third-party counseling.  Reverse mortgages are gaining in popularity among retirees from all walks of life.  A reverse mortgage for purchase option is available for those looking to purchase a new residence.

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

Understanding The Reverse Mortgage Maturity Event

reverse mortgage loveland fort collins greeley longmont westminster coloradoFor 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, and this FHA backed loans allow the borrowers to live mortgage  payment free.  The funds are available in various different ways, including a line of credit, monthly installments, a lump sum, and even to purchase a home.

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.

Reverse Mortgage Appraisal – The Facts

Reverse Mortgage for Purchase Loveland Fort Collins Greeley Longmont Westminster Colorado Cheyenne Laramie WyomingGetting assessments on just about anything can seem laborious or tedious, who wants to have something close to them looked at with a magnifying glass? But appraisals for reverse mortgage loans can be very helpful for you because they lay down where you are in equity. In fact they are required. The process is very simple.

First, after talking with a reputable reverse mortgage specialist, you will submit your application. The lender will be the one to contact an appraiser who will in turn contact you to set up a time for them to look at your home.

The procedure is standard and involves three steps, the inspection, the research, and the report.

Inspection:

The appraiser will walk through your home with you, he or she might take photographs. It will document features that add value to your home. If the appraiser takes a picture of something in need of repair it lets you know that it matters and gives you a chance to fix it.

Research:

Once the walk through is done, the appraiser’s work continues as they research factors that influence the value they place on your home. Home sales in your area are one area of research. Others include multiple listing services, tax assessor’s records and public records come into play. Anything that will help to give the present value will be taken into account.

The Official Report:

This is the synthesis of the appraiser’s home visit and all the research. The report is used with your loan request. If photographs were taken, they will be included as well.

The appraiser gives this report to the lender who will give you a copy and an updated reverse mortgage figures taking into account the new information.

There are simple things you can do before the appraiser gets to your home to help your loan request. Coming in the next article.

Reverse mortgage is an individualized, specialized loan for those 62 and older that allows seniors to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. If you are planning ahead let your specialist guide you in the many scenarios that are possible. 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.

The Reverse Mortgage Appraisal – Preparation

reverse mortgage loveland fort collins greeleyAfter you fill out the application for a reverse mortgage, with the help of a trusted and reputable reverse mortgage specialist, an appraisal of your home needs to be conducted.

This can be a nervous moment to have a stranger come into the home you have enjoyed for many years for the purpose of evaluating it. Since you may not know what to expect you might even wonder if they are going to ask questions you cannot answer, or notice the cleanliness of the refrigerator.

There are many steps you can take before the appraiser comes to your home. IF you take a little time the value will increase and the appraiser will only have to make one visit instead of numerous ones because you had work to do.

Here is a list of the types of questions to honestly ask yourself and if your answer to any of them is yes, fix it before they arrive.

• Do you have exposed electrical wires? Or faulty electrical?

• Are there staircases or decks without rails or in poor condition?

• How is your paint looking? Inside AND outside.

• Do you have any water leaks?

• What is the status of your roof, are there any leaks or damage?

The better shape your home is in when the appraiser comes, the better the listed value will be and the more money will be in your pocket from your reverse mortgage loan.

Maybe you are looking for a loan for the sake of repairs, as a senior this kind of help is possible for you just ask your lender for more information so the focus of the loan is included.

Reverse mortgage is an individualized, specialized loan for those 62 and older that allows seniors to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. If you are planning ahead let your specialist guide you creatively to suit 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.

What is a HUD Eligible Home for Reverse Mortgages?

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.

Home Equity Among Seniors Rises

reverse mortgage loveland fort collins greeley longmont westminster coloradoIn the first quarter of 2017, home equity held by homeowners 62 and over rose 2.6% to $6.3 trillion, according to data from the National Reverse Mortgage Lenders Association.  

This $200 billion increase of housing wealth is attributed to rising home values across the nation, and especially in Colorado where some of the largest spikes were indexed.  It is important to note, however, that this was slightly offset by a 0.6% increase in senior held mortgage debt, which is equal to $9 billion.  

So, what are the takeaways from these figures?  

First, now is a fantastic time for older individuals and married couples to look into a reverse mortgage while home values are up and interest rates are down.  One of the factors that determines the amount of funds available through a reverse mortgage is the appraised value of the home – the higher the appraised value, the more funds available.  On the flip side, because these loans are FHA insured, if a reverse mortgage is tapped into while home values are high, there is never a concern that more will be owed when it comes time to repay than what the home is worth at that time.  This is a comforting guarantee if the housing market were to decline in the future.   

Second, the $9 billion increase in senior housing debt signals that older homeowners are not entering retirement mortgage-free at an increasing rate, and/or they are comfortable taking on mortgage debt in retirement.  In either scenario, a reverse mortgage should be considered as it may be a viable option.  Reverse mortgages can be used to eliminate current mortgages – allowing the homeowners to live mortgage payment free.  They can also be used to purchase a new home.  This is something that all senior buyers should be made aware of while in the real estate market, as they can enjoy their new living situation AND live mortgage payment free. 

Reverse mortgage is an individualized, specialized loan for those 62 and older that allows seniors to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. Adult children can help their parents plan ahead by working with a reputable reverse mortgage specialist.

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.

What To Know About Reverse Mortgages And Taxes

reverse mortgage loveland colorado fort collins longmont greeley boulderThere are many differences between a reverse mortgage and a traditional mortgage – and taxes are a big one.  Here’s a run down of what to expect come tax time if you have a reverse mortgage.

The Tax Liability Issue

Because any funds you receive from a reverse mortgage are essentially an advance on your home equity – equity you already own and have paid for, the IRS does not consider money received from a reverse mortgage as income, they consider it an advance, therefore it is not taxed as income.  This is the case regardless of how you receive the funds – whether monthly installments, a line of credit, or a lump sum, you will never pay income tax on this.

What About Deductions on Interest?

Here’s one situation where there is a stark difference between a traditional mortgage and a reverse mortgage.  With a traditional mortgage interest and fees paid are tax deductible every year they are paid.  This is still the case with a reverse mortgage, except in the scenario of a reverse mortgage the interest is not paid until the loan comes due, therefore it cannot be claimed as a deduction until this point.  The loan comes due if the borrowers sells the home, passes away, or permanently leaves the home.

Property Taxes

With a traditional mortgage, property taxes are often taken care of by an escrow service.  With a reverse mortgage the homeowner is 100% responsible for making sure these property taxes are kept up to date.  If there are financial concerns about the ongoing cost of property taxes, discuss this with your reverse mortgage specialist.  In the new financial assessment there are options to help set aside a portion of the funds to cover ongoing expenses such as property taxes and homeowner’s insurance.

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