Month: March 2014

Taxes and your Reverse Mortgage

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Spring has sprung in Northern Colorado again!  That’s the good news.  The bad news is this also means it’s tax time.  It’s common during this time of year for me to receive a few questions regarding taxes and reverse mortgage – from both those considering a reverse mortgage, and those who already have a reverse mortgage.

 

Here are the two most common:

 

Are the funds from my reverse mortgage considered taxable income? 

 

No.  Because the funds received from a reverse mortgage are technically an advance on a loan, any payments or lump sums received are not taxable income, meaning they do not need to be reported on a tax return as such.  They also typically do not affect Social Security or Medicare payments.

 

Is the interest from my loan deductible? 

 

No.  Because reverse mortgage holders do not make monthly mortgage payments and typically the interest is not paid until the loan is paid in full, the interest from a reverse mortgage loan is not deductible on a tax return.  This is also the case with a reverse mortgage for purchase loan.

 

FHA insured reverse mortgages are available to homeowners 62 and older with no credit or income requirements.  These loans allow the borrower to live mortgage payment free and receive their loan payment in one lump sum or in monthly installments.  All borrowers are required to participate in third party counseling to ensure all their questions are adequately answered before making a decision.  Reverse mortgages are also available 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.  Click here to contact Jan and learn if reverse mortgage is right for you.

3 Things to Do with a Reverse Mortgage in Colorado

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One of the best parts of a reverse mortgage is the borrower(s) can do anything they’d like with the funds – while also living mortgage payment free.  In Colorado, seniors are more active than ever, whether it be traveling, home improvements, or visiting with family and grandchildren often.  As several Colorado cities always make the list of the best cities to retire (including Fort Collins & Loveland in this survey and Firestone, Parker & Louisville in this one) there couldn’t be a better time or place to enjoy life.

 

Here are 3 fulfilling options seniors are using their reverse mortgage funds for:

 

Take that trip they always dreamed of – After years of working hard, saving for retirement, and raising a family, some reverse mortgage borrowers are using a portion of their funds to take the bucket list vacation they’ve always dreamed of.  This option becomes less probable as they age and makes for a fantastic celebration by the more active seniors.

 

Visit with loved ones – Whether it’s a sister who hasn’t visited in 10 years, or children and grandchildren, or long lost friends, using reverse mortgage funds to visit with loved ones is a very common today.  Travel can be expensive and it holds us back far too often from the visits that mean the most to us, especially as we age.

 

Make home repairs or upgrades – After a life of caring for others, senior homeowners often find parts of their home may have been neglected.  When using a reverse mortgage to tap into home equity without a subsequent loan payment borrowers often make those repairs or upgrades they have been longing for.  Whether it’s a sunroom addition or a kitchen remodel, or just dutiful repairs, this is never a bad option.

 

Reverse mortgages are available to homeowners 62 and over with no income and credit requirements.  This FHA insured loan offers funds through a lump sum or monthly installments and eliminates monthly mortgage payments.  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.  And 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.  Click here to contact Jan and learn if reverse mortgage is right for you.