Month: December 2012

Your Reverse Mortgage Appraisal


If you are a senior 62 or older considering a reverse mortgage, a home appraisal by an FHA approved appraiser is required for every loan.  Once your reverse mortgage lender has received your application, the lender will contact an FHA appraiser.  The appraiser will then contact you to schedule a time that works for them to visit your home.


Here is what to expect from a reverse mortgage home appraisal:


The Inspection:
During the inspection, the appraiser will walk through your home with you.  It is not uncommon for the appraiser to take photographs of your home, primarily if there are specific features that may add to the value of the home or may be in need of repair.


The Research:
The appraiser will then begin to research various factors that will come into play, such as comparable home sales in your area.  The appraiser will review public records, multiple listing services, tax assessor’s records, and any other resources available to determine factors that will influence the value of your home.


The Appraisal Report:
After analyzing your home along with comparable home sales in your area, the appraiser will deliver the appraisal to be used with your loan request.  The report will contain all the information about your home, the comparable home sales that the appraiser used, and any photographs of your home.


Once the appraisal is completed your reverse mortgage lender will provide you with a copy of your report and update your reverse mortgage figures based on the appraised value.


There are some simple things that you or your loved ones can do BEFORE the appraiser arrives that can affect your value and prevent repeated visits by the appraiser.


For example, look for and repair the following if possible:


Do you have any chipping or peeling paint inside or outside the home?
Do you have any exposed electrical wires?
Do you have any current or past water leaks that have not been treated?
Do you have any decks or staircases without hand rails?
Does your roof have any issues with leaking or dose it show excessive wear?


If home repairs are required for a reverse mortgage, they can sometimes be completed after closing on the loan, using the proceeds from the reverse mortgage, thus eliminating the outgoing cost for seniors.  Ask your reverse mortgage lender for more information about this option.


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



Responsibility as a Reverse Mortgage Holder

Colorado Reverse Mortgage


Reverse Mortgages have helped millions of seniors live more plentiful lives as they age.  Homeowners and their spouses over the age of 62 are eligible for Home Equity Conversion Mortgages (HECM) regardless of income and credit.  But although they will not have a monthly mortgage payment to pay, they are still responsible for some financial obligations regarding the home.  These include:

Property Taxes:


Just as with a conventional home loan, a reverse mortgage homeowner is always responsible for paying their property taxes.  Your particular county or city may have a program that allows you to defer a portion of your property tax.  Homeowners can contact their county human services office for more information.


Homeowners Insurance:


Just as with any conventional home loan, reverse mortgage holders are required to purchase and maintain homeowners insurance.  This yearly expense is something that should be discussed with your lender and a reverse mortgage counselor to ensure the homeowner understands their options and a plan is put in place to keep insurance current.


Home Maintenance: 


The homeowner or their family will be responsible for continuing to maintain and upkeep the home.  Because a reverse mortgage uses the equity available in the home to make it’s monthly mortgage payments, if major repairs are needed the homeowners will not be eligible for a home equity loan or similar.  It’s important to keep this in mind, especially when homeowners elect to receive their reverse mortgage funds in one lump sum.  Again, discussing this with your lender can help ensure you have planned to have funds available should a major home repair be needed.


Ultimately, understanding and planning for these expenses is key to being prepared in the years to come.  Working with and asking questions of a reputable reverse mortgage lender, as well as a reverse mortgage counselor, can help alleviate any concerns a homeowner may have.


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




5 Ways to Spot a Reverse Mortgage Scam


Reverse Mortgage Scams

Watching out for a reverse mortgage scam should be on the top of the list for anyone considering such a loan, but it’s especially concerning to adult children who are looking out for their aging parents.  There are some fairly simple guidelines to abide by in order to steer clear of such fraud.


1. Unethical Marketing Practices
This is one of the of the sure tell signs something could be fishy.  Reverse mortgage lenders are held to a standard of marketing by the Consumer Financial Protection Bureau (CFPB) that other mortgage lenders are not.  Watch out for reverse mortgage lenders who solicit through means such as television, door-to-door, churches or other community centers, direct mailers, or other extensive advertisements.


2. Asking for Money Up-Front


If you are beginning the process with a reverse mortgage lender it is not uncommon for them to ask for an appraisal deposit of around $300, but if they are requiring an amount much in excess of this prior to your required reverse mortgage counseling and the official closing of the loan, this is definitely a scam.  With a reverse mortgage very little money is required to get started.


3. Foreclosure Assistance


Although reverse mortgages can be a solution to foreclosure in some situations, reputable lenders will not solicit to homeowners in distress.  Foreclosure scams have run rampant as the housing market has been rocky, but senior homeowners are often easy targets to such scams.


4. High Pressure Sales


When working with a reverse mortgage lender, it’s important that you feel comfortable and confident in your decisions.  If you feel you are being pressured or that your questions are not being addressed, it may be time to question whether or not you want to continue working with this lender.


5. Lacking Credibility


A credible lender will have a network of professional associates, such as the Better Business Bureau, the National Reverse Mortgage Lenders Association, and the FDIC.  If a lender is lacking these networks, it should be cause for question and concern.


Although there are certainly disturbing scams that exist in the reverse mortgage industry, there are also many reputable lenders who are there to work through the process with you, answer all of your questions, and make sure you are making the right decisions for you and your family.


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