Month: January 2014

How to Alleviate HELOC Payment Shock with Reverse Mortgage

Reverse Mortgage Colorado Financial Planning
At the peak of the housing boom thousands of Loveland and Fort Collins homeowners tapped into their biggest asset – their home – and took out a home equity line of credit or a HELOC.  Many of these loans are set to amortize after 10 years, meaning these borrowers are about to see some serious payment shock as their loans readjust and their payments now include interest and principal.  The Office of Comptroller of the Currency estimates that 60% of all HELOC balances will start amortizing between 2014 and 2017, and resetting to higher payments could cause a jump in delinquencies.  In addition, analysts at Moody’s Investor Services are warning banks of impending losses, worrying this situation may prove problematic, just as payment adjustments during the 2008 housing crisis did.


For retirees already living on a fixed income, borrowers may scramble to make these adjustments fit into their budgets.  But homeowners 62 and over have another option – reverse mortgage.  With a reverse mortgage seniors have the ability to not only alleviate any impending HELOC payment shock but also live mortgage payment free throughout retirement – all with minimal income and credit requirements.  Once a homeowner has obtained a reverse mortgage, they are able to receive their funds in a one-time lump sum or as monthly payments made directly to them.


This scenario is also something to consider for homeowners currently considering a HELOC to make home repairs or improvements.  Considering the difference between a home equity loan and a reverse mortgage is important when developing a long term plan.  Learn more about HELOC vs Reverse Mortgage here.
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.


Reverse Mortgage for the Married Couple

reverse mortgage colorado loveland fort collins longmont greeley


It’s a common question among those considering a reverse mortgage, especially in the Loveland and Fort Collins area – “I’m married.  What about my spouse?”  If you and your spouse are considering obtaining a reverse mortgage, it’s important to understand the long term effect it could have on either spouse and feel confident any and all appropriate protections are in place.


What Married Couples Need to Know:

  • When applying for a reverse mortgage, whether for traditional loan or to purchase a new home, the amount of money you can receive is calculated according to the age of the youngest borrower. The older the borrower, the more money is available from the lender.
  • Since reverse mortgages are available to homeowners aged 62 and over (with minimal income or credit requirements) if  both spouses are over the age of 62, both homeowners can be on a reverse mortgage loan.  If both spouses are on the loan, the loan continues after either passes away. If only one spouse is on the reverse mortgage loan when the borrower passes, the loan is due and the home will transfer to the estate. At this time the heirs will have the option to pay off the existing loan, sell the home, or obtain a conventional loan. Occasionally this is not a concern if the amount of life insurance is anticipated to be enough to pay off the loan after the borrower dies or another plan has been put in place.
  • Another scenario to consider is if a borrower obtains a reverse mortgage and then remarries. If this was to happen after the age of 62 or even older, it wouldn’t be unheard of for the married couple to live in the home for 20 or more years before the borrower passes. At this time the new spouse would not be protected under the existing reverse mortgage loan and the loan would be due. You could consider looking into refinancing the reverse mortgage and adding the new spouse to the loan after marriage.
  • And yet one more thing to note is the possibility one spouse needs to move out of the home into an assisted living facility due to health concerns. If this happens, as long as the spouse remaining in the home is on the loan, they can continue under their current reverse mortgage.

Bottom line: If you are married and are considering obtaining a reverse mortgage, it is extremely important to work with a trusted and experienced reverse mortgage specialist who can easily answer all of your questions and address any concerns you may have. Making sure both spouses are protected should be a lender’s top priority.


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.

A Retirement Crisis by the Numbers

colorado reverse mortgage fort collins denver loveland greeley windsorNumbers are being released showing that the impending retirement crisis may be worse than originally thought.


Half of Americans have less than $10,000 in savings.  Nearly half of the oldest Baby Boomer generation have insufficient resources to pay for basic retirement living expenses and healthcare costs.


The Center for Retirement Research at Boston College estimates that our “retirement income deficit” is $6.6 trillion. That number represents the gap between pension and retirement savings that American households have today and what they should have to maintain their standard of living in retirement.


Over 6 million American seniors are living in poverty.  This number is expected to grow by 33% by the year 2020.

Continue reading “A Retirement Crisis by the Numbers”