Month: April 2016

What is a Reverse Mortgage Maturity Event?

Reverse Mortgage Colorado Fort Collins Loveland GreeleyWhen a conventional mortgage is taken there is always a maturity date. This date designates, if the borrower never defaults, the last payment (including all interest and principal) bringing closure to the loan.


With a reverse mortgage there is a maturity event, that is, a designated event in the borrower’s life which makes the loan then due. Reverse mortgage loans do not require monthly payments which can be quite an advantage for a senior entering into a new phase of life – whether their looking to supplement their income, protect retirement assets and investments, or buy a new home. FHA insured reverse mortgages are offered to those 62 and older based on certain guidelines, such as the home the loan is on must be a primary residence and it must meet HUD’s required guidelines.


Maturity event will be a term the borrower will encounter  several times during the application process and required third party counseling.  It’s very important piece for both the borrower and loved ones to understand.


Here are some examples of maturity events:


• The borrower, (or last borrower if married) passes away.
• The property for which the reverse mortgage is taken is no longer in the borrower’s primary residence.
• The property is sold out of the borrower’s name
• The borrower moves out of the primary residence for more than twelve consecutive months, such as moving in with family or assisted living for care.
• The borrower defaults on property taxes, homeowners insurance, or other obligations to the home.


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

Can a Reverse Mortgage Benefit a Widow?

colorado reverse mortgage fort collins denver loveland greeley windsorWhen a spouse passes, it’s a very difficult time for the widow and the family.  In addition to the emotional toll, it’s not uncommon to face a sudden and often unexpected financial toll.  After a spouse passes, it is more common than not that there will be a reduction or elimination of the deceased spouses pension or social security benefits. This can create a serious strain on the widow to continue to make mortgage payments, property taxes, homeowners insurance, home repairs, in addition to other daily expenses.


If you are a widow financially struggling without your spouse, a reverse mortgage can be of benefit.  Senior homeowners age 62 and over may qualify for a reverse mortgage.  A reverse mortgage does not have to be repaid as long as the homeowner continues to live in the home.  This can make it possible for a widow to remain in the home without the financial strains that may be present otherwise.


If you are a married couple considering a reverse mortgage, you can find some helpful tips here.  You can also learn more about what happens to your home after both spouses pass away here.


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


Responsibility as a Reverse Mortgage Holder

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

Your Reverse Mortgage Appraisal

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