Tag: retirement

Reverse Mortgage Can Help Coloradans Retire in Comfort

reverse mortgage loveland fort collins greeley longmont westminster coloradoFor many who remember the reverse mortgage scares of the yester-years, the terms ‘comfort’ and ‘reverse mortgage’ seem like an unlikely duo.  But they shouldn’t  be.

Since the FHA and HUD changed a few regulations stabilizing reverse mortgages in 2015, they have quickly been garnering new attention.  Whether looking to boost monthly income, protect retirement, or even purchase a new home, reverse mortgage is proving to be a versatile and creative tool.

Here are three ways a reverse mortgage can help make retirement more comfortable:

1.) Supplement retirement income.  With a whopping 36% of baby boomers planning to live on nothing but Social Security for retirement, utilizing a reverse mortgage to supplement retirement funds with non-taxable income from the equity of an individual’s home is a great option.  The funds can be accessed via monthly payments or a line of credit, and because the loan doesn’t come due until the borrower passes away or permanently leaves the home, they can live their retirement years both financially comfortable and in the comfort of their own home.

2.) Protect and enhance retirement portfolio.  For those who have a well prepared plan for their retirement, using a reverse mortgage line of credit to supplement their nest egg can offer great flexibility and even enhance wealth.  Some simply want to use the funds to delay Social Security until they can receive the largest amount.  Others may have investments they are looking to protect or allow to mature.  Retirement and financial planners are now discussing how a reverse mortgage can be used as part of a long term retirement plan.

3.) Purchase a retirement home.  It’s still a little known fact that a reverse mortgage can be used to purchase a new home – but it can, and it’s a great fit for so many retirees.  Whether looking to moving in to a senior community, move closer to family, or move to a dream home, using a Reverse Mortgage for Purchase should not be overlooked.  This amazing program makes the once impossible possible when it comes to home buying.

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 and help creatively 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.  Contact Jan and learn if reverse mortgage is right for you.

Here’s Why The Reverse Mortgage Line Of Credit Is So Popular

The HECM Reverse Mortgage Line of Credit is still relatively new, and to this day many within the financial and retirement industries haven’t fully grasped how it works.  Well, they need to get on board because consumers are interested – and they should be.  Here’s why..

First, what is a line of credit?  Simply put, a line of credit are funds available to you through a financial institution that you can access as needed, or not at all if the need doesn’t arise.  Interest is not acquired if the funds are not used.  This makes line of credit options excellent safety nets, especially for the purpose of creative retirement strategy.

When looking at a HECM Reverse Mortgage Line of Credit, the two are obviously intertwined, meaning the qualification requirements for any reverse mortgage still apply.  These are: age 62 and over, using your primary residence for the loan, this home must meet HUD’s guidelines and needs to be either paid off or have substantial equity, and the borrower must have the financial capability to continue to pay homeowners insurance, property taxes, and the like. Because there are various options to receive the payout from a reverse mortgage, the line of credit is only one of them.

When you have a reverse mortgage line of credit, you have money that is available to you — but you only accrue interest on the money you withdraw.  This means the reverse mortgage line of credit can act as an excellent back up source of funds or can be used for retirement fun, whether it be vacation, spoiling grandchildren, or knowing you have the funds available when you’re ready to take on new ventures.

There are other benefits though.  This line of credit is pretty astounding beyond just being a safety net.

Growth: Not only are you not paying interest, but your untouched reverse mortgage line of credit can grow in value. Money in a reverse mortgage line of credit grows at the same rate as the interest rate on the loan PLUS 1.25% monthly.  So, if the interest rate on your reverse mortgage is 2.50%, then your line of credit will grow at 3.75% (2.50% + 1.25%).

Unique: This growth is unique to reverse mortgage lines of credit — a HELOC for example does not grow.

Hedge Against Falling House Prices: The growth in a reverse mortgage line of credit is guaranteed — without withdrawals, your line of credit is guaranteed to grow.  This means you lock in the current value of your home without taking out an interest acruing loan.

Pretty great, isn’t it?

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Firestone, Fort Lupton, 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.

Can Reverse Mortgage Help You Achieve Your Retirement Vision?

reverse mortgage colorado fort collins loveland greeley longmont cheyenneIn 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.

 

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 in Retirement : Now or Last Resort?

Reverse Mortgage Colorado Financial Planning

 

Research suggests that many baby boomer and beyond retirees will not be in a financial position to avoid using home equity as part of their retirement strategy, meaning they will be increasingly turning to reverse mortgage. Senior homeowners are more commonly seeking advice from their retirement planners on whether to consider a reverse mortgage now proactively, or later as a last resort. So, what is the right answer?

 

A recent study compared the efficacy of two simple strategies: (1) establish a reverse mortgage line of credit at age 62, under current lending and interest rate environments – but do not use the line of credit until the retirement investment portfolio is exhausted.  Or option (2) wait until the investment portfolio is exhausted, if ever, and establish a reverse mortgage line of credit then, and subsequently begin to use the proceeds to support income needs until that line of credit is exhausted.

 

Conclusion: The results showed an estimated 30-year survival advantage for early establishment. This holds true under various future interest rate and home appreciation scenarios for real withdrawal rates between 4 percent and 6 percent. However, postponing the establishment of an HECM line of credit should be considered when the adviser and/or client has good reason to believe that home occupancy after loan origination is likely to be short.  In a recent blog article, I discussed how a reverse mortgage line of credit increases each month, and the feature is more valuable the longer the borrower wants to stay in their home.  Read it here.

 

Get the full report on this study from Journal of Financial Planning here.

 

Seniors 62 and over are eligible for a reverse mortgage regardless of income or credit.  Use of home equity as part of a retirement planning strategy is becoming more and more realistic as baby boomers face an uncertain economy.  Contact me for more information.

 

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.