February 2018 - Colorado Reverse Mortgage Specialist

Month: February 2018

Everything You Need To Know About A Reverse Mortgage For Purchase

Posted on February 23, 2018March 9, 2018 by janjordan

We’re all familiar with the two most common options to purchase a home – take out a mortgage loan or pay cash. But for seniors 62 and over, there’s another option – the Reverse Mortgage for Purchase program (aka HECM for Purchase).

Looking for a home in Fort Collins, Loveland or Longmont, Colorado but finding it’s a bit out of your price range? Because the borrower is responsible for only the down payment on the home and will have NO mortgage payments, a Reverse Mortgage for Purchase can help with this too.

What is needed to qualify for a Reverse Mortgage for Purchase loan?

you must be age 62 or older (each borrower on title must meet this criteria, although others residing in home do not)
the home you are purchasing must be your new primary residence
must meet the FHA’s new reverse mortgage credit and income guidelines
you must have your “required investment” (down payment) from a HUD allowable source. The funds cannot be borrowed. The required investment can come from the sale of a currently owned home or asset, a gift or inheritance, or money you have had for at least 90 days.

Who owns the home that I am purchasing?

As the borrower and homeowner, you will always retain the title to the home, just like any other type of home loan.

What will my personal ongoing obligations be after purchasing a home?

It’s very similar to if you owned your home free and clear – you will NOT have a monthly mortgage payment. But as the homeowner, you will be responsible for paying property taxes, home owner’s insurance, HOA fees when applicable, and basic upkeep including home maintenance and utility payments.

When will the loan become due and payable?

With a Reverse Mortgage for Purchase the loan does not reach “maturity” until:

the last remaining borrower passes away
the homeowner sells the home
the last remaining borrower leaves the home for 12 consecutive months due to illness
the homeowner defaults on property taxes or insurance

Will I need to sell my current home residence to qualify?

Simply put, no. As long as the loan on your current residence is not an FHA loan and your required investment comes from a HUD allowable source, you can keep your current residence – but the new home will need to be your primary residence. Your lender will ensure you are financially stable enough to support the ongoing obligations on all properties you own. If you decide to keep your current residence as an investment, rental, or vacation property – or you are awaiting the sale of home, it is rarely a problem.

What types of properties can I purchase?

Single family homes, town homes, and FHA approved condos are all eligible properties. The home being purchased will need to be the buyer’s primary residence.

Can I use the loan to build a new home?

Previously these loans could not be used as construction loans and homes needed a Certificate of Occupancy before the loan application could be started. This changed this past October, and now homes in construction are eligible. Read here to learn specifically about obtaining a Reverse Mortgage for Purchase on new construction.

How is the “Required Investment” amount determined?

The “required investment” or down payment is determined by a calculation set by HUD based on:

The lesser of the sale price or appraised value
The age of the youngest of the borrowers
The current expected interest rate

What may disqualify me from a Reverse Mortgage for Purchase loan?

Foreclosures within the past 3 years.
Unresolved bankruptcy
Unpaid Federal obligations – i.e. federal taxes, defaults on prior government backed loans (such as student loans or government backed mortgages)
Income too low to support multiple properties
Unpaid judgments or tax liens

What is the HUD required “Reverse Mortgage Counseling”?

Prior to being approved for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires each borrow to participate in a counseling session with an approved agency. These third party, not-for-profit agencies are funded by the federal government and work closely with both the FHA and lenders to ensure a smooth process. The goal of this session is not to steer a potential borrower in one direction or another, but to make sure they clearly understand all aspects of a reverse mortgage.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming. Contact Jan and learn if reverse mortgage is right for you.

Will My Home Qualify for a Reverse Mortgage

Posted on February 16, 2018March 9, 2018 by janjordan

Reverse Mortgages are a specialized loan available to seniors 62 and over. This creative resource is used by a wide demographic – from those looking to supplement a fixed income, to the more affluent in need of protection for retirement assets, and even those wanting to purchase a home in retirement. But there are some requirements when it comes to the actual home…

Which types of homes are included?

According the HUD’s Federal Housing Administration, the home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. Some condominiums and manufactured homes that are approved by HUD also meet FHA requirements.

In the case of a Reverse Mortgage for Purchase, borrowers can use a reverse mortgage to purchase a single family home or 2-4 unit home with completed construction that has received a certificate of occupancy.

Are there reasons my home may not qualify?

A home with very little equity may not qualify, although homes with existing mortgages may.

In addition, homes must be maintained with general upkeep and be current on property taxes and other expenses relevant to the home.

A second home or vacation home may not qualify. The borrower must be living (or plan to live) in the home.

Bottom line

The funds from a reverse mortgage can be accessed via a lump sum, line of credit, monthly installments, or to purchase a home. If you have questions let your specialist guide you in the many scenarios that are possible and the two of you can think creatively about 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. Click here to contact Jan and learn if reverse mortgage is right for you.

How A Reverse Mortgage Can Help You Retire In Comfort

Posted on February 9, 2018 by janjordan

For 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.

What Responsibilities Will A Reverse Mortgage Borrower Have?

Posted on February 2, 2018February 9, 2018 by janjordan

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.