Author: janjordan

Visiting Aging Parents? Here’s What Adult Children Need To Discuss

reverse mortgage colorado fort collins loveland greeleyWith the holidays ahead of us, it’s not uncommon for adult children to reach out to me to discuss a reverse mortgage as an option to help their aging parents.  They often spend a little more time with family and may realize things are changing with their parents and in their home.  Here are my tips to helping your parents or older loved ones…

1.) Talk with them

Don’t hide your concerns or exclude them from the conversation, no matter how uncomfortable it is.  Ask them to sit with you and discuss your concerns.  Discuss their wants and needs.  Learn about their financial situation and retirement resources.  Having a honest face to face conversation is the first step to determining what is best for them.  

2.) Discuss living arrangements 

Find out what your parents want to do long term regarding their home.  Discuss what they ultimately want, and what would make them change their mind.  According to AARP, 90% of retirees want to age at home.  Do they have concerns with their home?  Do they need updates?  Is the home too big?  Too many stairs?  Do they want to move to a smaller home?  If medical care became a need, how will this be managed?

3.) Look into the various options such as insurance and reverse mortgage

When discussing how to finance potential scenarios, educating yourself about the various options such as long term care insurance and reverse mortgages will go a long way.  The two can even be used together by using some of the reverse mortgage funds to pay for long term care insurance, especially when there are medical concerns.  

4.) Come to an agreement about how much is expected out of adult children

Adult children may want to give the world to their parents, but is that really feasible?  And how do the parents feel about that?  Determining expectations all around, along with setting hard boundaries, will ease any resentment down the road.

5.) Seek out a professional

There are many resources for seniors – whether it’s community resources or elder attorneys.  When you’re unsure of the options or what is best, enlisting a professional can help to ease everyone’s mind. 

Reverse mortgages are available to homeowners 62 and over, including married couples, 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.  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, as well as the Cheyenne and Laramie communities of Wyoming.  Contact Jan and learn if reverse mortgage is right for you.

As Senior Housing Wealth Reaches New High, Is It Time To Consider A Reverse Mortgage?

Older homeowners continue to break home equity records as home values appreciate across the nation. In the first quarter of 2021 homeowners 62 and older saw their housing wealth grow by 3.4 percent or $305 billion from Q4 2020. 

That brought senior housing wealth to a record-breaking $9.23 trillion in the first quarter of the year, according to a quarterly index published by National Reverse Mortgage Lenders Association and RiskSpan.

Reverse mortgages have become a critical component to helping fund retirement alongside other tools such as 401(k)s, IRAs, savings, investments, and Social Security. 

Because the amount available for the borrower through a reverse mortgage is based on the current appraised value of the home, today’s senior housing wealth numbers indicate this is a great time to explore the reverse mortgage option. The FHA insured reverse mortgage means even if the housing market were to become volatile in the future, the borrower will never owe more than the appraised value of the home at any given time.

Homeowners 62 and over, with significant equity in their home, may be eligible for a reverse mortgage.  These loans are typically insured by the FHA and provide non-taxable income to the borrowers based on the available equity in the home.  The more equity and the older the borrower, the more funds available.  The funds can be accessed via a line of credit, monthly installments, a lump sum, and even can be wrapped into the purchase of a new home.  The borrower can always use the funds for whatever they deem fit.

The homeowner will live mortgage payment free for as long as they remain in the home, although they will have a few financial obligations related to the house such as homeowners insurance, property taxes, utilities, and HOA fees.  As long as the borrowers keeps current on these few obligations, they cannot be evicted from the home or made to repay the loan.  The loan comes due once the last borrower has left the home for 12 consecutive months or passes away.  At this time the loan will be due and payable with time allotted to allow for transitions.  

This is where the FHA insurance comes in.

In the case of a death, the home with pass onto the heirs.  At this time they have two options – 1) Pay off the loan and keep the home (often through life insurance or sale of another asset), or 2) Sell the home.

In the scenario of loan repayment the heirs will never have to repay any more than the home is appraised for.  They will only be required to pay 95% of the appraised home value or the full amount of the loan, whichever is less.  Any amount due on the loan above the appraised amount will be covered by the FHA insurance and no one will be held liable.

In the case of a home sale, the heirs will never be required to pay more on the loan than the home sells for as long as the sale price is at least 95% of the appraised value.  Any remaining balance will be covered by the FHA insurance.  On the other hand, if the home sells for more than the loan balance, the heirs will keep any remaining funds.   This is especially important as over the years the housing market shifts.

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

 

Is Paying Off A Traditional Mortgage With A Reverse Mortgage A Good Idea?

reverse mortgage loveland fort collins greeley longmont westminster coloradoA recently released university report by the Michigan Retirement Research Center and funded by the Social Security Administration showed that 55% of those utilizing a reverse mortgage are using some of the proceeds to pay off a traditional mortgage.

So, when is this a good strategy?

1.) They’re living in a house they can’t afford

When many older adults reach retirement, they have to figure out out how to live on a fixed income and how to make their other retirement assets last for what is often decades.  Tapping into a reverse mortgage will both eliminate the weight of the mortgage payment, and often even allow extra funds to use throughout the remainder of their lives.

2.) They want to purchase a different home

It’s not uncommon for retirees to purchase a home in retirement.  But few know they can do this with a reverse mortgage instead of a conventional one. This allows buyers to either preserve assets and income, or purchase a home that would typically be out of their price range.  Click here to learn more about the Reverse Mortgage for Purchase program.

3.)  They don’t want to interrupt performing assets

For those with retirement investments that are doing well, drawing from these to make mortgage payments could be a bad move.  Using a reverse mortgage to eliminate mortgage payments can be a win-win in the long run.

Reverse mortgages use the equity in your home to allow access to cash through monthly payments, a lump sum, or a line of credit while living mortgage payment free.  The borrower and the home must meet certain qualifications, such as age (62 or older), and HUD’s  home eligibility requirements, and they must also continue to pay and maintain certain responsibilities such as property taxes and homeowners insurance.

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.

Reverse Mortgages Can Fund In-Home Senior Care

According to statistics, there’s a 70% chance seniors over 65 will need some sort of long term care such as in-home care, skilled nursing, or assisted living at some point during their lives.  Although there are various ways to pay for such care, like Medicare, Medicaid, or health insurance, these options often come with limits and additional costs.

For homeowners 62 and over reverse mortgage should be another option considered to fund long-term care.  These tax-free loans convert a portion of home equity into cash without incurring a loan payment.  Borrowers can access the funds via monthly installments, line of credit, a lump sum, and even to purchase a home.

The reverse mortgage line of credit is a great option when facing the future needs of long term care.  This option allows homeowners to secure this FHA insured loan at the current interest rate, then only use the funds when needed – and the line of credit grows as the borrower ages.

Unlike a traditional loan or a Home Equity Line of Credit (HELOC), there are no loan or mortgage payments as long as the borrower lives in the home.   The line of credit comes due either when the last borrower permanently moves out or passes away, in which case the heirs or the estate could pay the loan back either through sale of the home or other means. Depending on how much of the line of credit has been tapped, this could result in significant equity left to heirs. If you never used the line of credit, the equity would still be in place and would pass to heirs along with the home.

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.

Rising Interest Rates And Reverse Mortgages

reverse mortgage loveland fort collins greeley longmont westminster coloradoInterest rates have been at historic lows for years.  This has afforded thousands of Americans to the ability to secure home loans for their dream house.  It’s also worked in favor for those who have made the decision to tap in their home equity using a reverse mortgage.  But interest rates affect a conventional loan differently than a reverse mortgage.

HECM reverse mortgage are insured by the Federal Housing Administration (FHA), and are available to homeowners 62 and over.  These tax-free loans convert a portion of home equity into cash without incurring a loan payment.  Borrowers can access the funds via monthly installments, line of credit, a lump sum, and even to purchase a home. The Department of Housing and Urban Development (HUD), which regulates the reverse mortgage industry, sets a “floor” rate of about 5%.  As interest rates rise and fall above this floor rate, borrowers will receive less or more in proceeds.  In fact, even a small rise of 1% above the floor rate can decrease available funds by as much as 20%.

Fortunately, once a homeowner has tapped into a reverse mortgage they lock in the interest rate and proceeds will never decrease, no matter what the market does, and the funds available will increase over time when using the line of credit option.  In addition, even if the home decreases in value below the amount of their loan proceeds, they will never be responsible for more than the home is worth.

Bottom line: with interest rates on the rise, now is the time to act if you’re considering 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.  Click here to contact Jan and learn if reverse mortgage is right for you.

Selling A Home With A Reverse Mortgage? Here’s What You Need To Know

Typically when a senior takes out a reverse mortgage loan on a home, they intend to age there.  But on occasion and reverse mortgage loveland fort collins greeley longmont westminster coloradofor various reasons, the homeowners wants to or needs to sell the home before the loan comes due and payable.  So, what now?

Although this is an important factor, it’s not nearly as daunting as it sounds.  Here’s where to start:

Step 1.) Locate your reverse mortgage loan documents and find any pertinent information regarding the sale of the home.  It will vary from lender to lender.  Most (but not all) reverse mortgage loans are FHA insured.  This means even if you owe more on the loan than the home is worth, you will never owe more than the home sells for.

Consult with a real estate or elder law attorney if you have questions or concerns.

Step 2.)  Contact the reverse mortgage lender to get a payoff quote.  This combined with a home appraisal will give you a good idea of what the sale will look like and what amount of funds you could potentially walk away with.

Step 3.)  Find a real estate agent.  When seeking out an agent, be sure to provide your reverse mortgage loan information up front and look for someone who has experience with such a sale.

Step 4.)  Prepare the home for sale.  From here, everything is similar to any home sale.  You want to prep the home, keep it clean for showings, update anything you may need, etc.

Step 5.)  Sell the home, pay off the reverse mortgage loan (consult with a real estate or elder law attorney if you have questions when paying off the loan), then reap the rewards.  Congrats!
Reverse mortgages are available to seniors 62 and over all over Colorado.  To learn more, contact a reputable reverse mortgage lender.

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.

Watch Out For Reverse Mortgage Scams

You may hear about email scams, telephone scams, door-to-door soliciting scams – but what about reverse mortgage scams? Unfortunately just as we have scams in every segment of society and at every opportunity, reverse mortgages and seniors are not immune to such activity.

In the past decade, reverse mortgages also known as Home Equity Conversion Mortgages (HCEM), have increased more than 1,300 percent! This certainly offers an astounding opportunity for fraud perpetrators.

What do reverse mortgage scams look like?

Victims may be offered a free home, an investment opportunity, or foreclosure and refinance assistance. Senior citizens are often unsuspecting targets for scammers, as they are not familiar with the multitude of unscrupulous and dishonest “programs” that exist. Scammers reach their victims often through churches, investment seminars, television, radio, billboard, and mailer advertisements.

When considering a reverse mortgage product, it is very important to research the company. Most reverse mortgages are insured by the Federal Housing Authority (FHA). Seek out companies that are a member of the Better Business Bureau and associated with the National Reverse Mortgage Lenders Association.

Tips for Avoiding Reverse Mortgage Scams:

• Do not respond to unsolicited advertisements.
• Be suspicious of anyone claiming that you can own a home with no down payment.
• Do not sign anything that you do not fully understand.
• Do not accept payment from individuals for a home you did not purchase.
• Seek out your own reverse mortgage counselor.

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.

Colorado’s FIVE Most Common Reverse Mortgage Myths Debunked

reverse mortgage loveland fort collins greeley longmont westminster coloradoThe Reverse Mortgage, created to aid the realization of retirees dreams, will be in your mailbox and on your TV if you have approached, or are approaching, the eligible age of 62. As with the all special offers across Colorado, marketing can promote it in such a way as to allure you – or to terrify you.

There are a number of points to know when you begin to learn about reverse mortgage. These are simple facts and not marketing strategies.

1.) First of all, married couples can both be on the reverse mortgage loan if they are both over the age of 62. This means when one passes, the other can continue living in the home under the same agreement. No changes take place just because both are no longer in the home.  This gives the remaining spouse a true security as they navigate through the transition of losing their life partner.  The same would apply if one spouse was to leave the home permanently and move into an assisted living facility.  As long as both partners are on the loan,  and one still remains in the home, nothing changes.

2.)  Second, there are NO monthly mortgage payments. So long as the borrower(s) remain in the home as their primary residence, their only financial responsibilities are the homeowner’s insurance, HOA payments, property taxes and basic upkeep/utilities.  This is the case whether a traditional reverse mortgage is acquired, or a reverse mortgage to purchase a home.  No mortgage payments, ever.

3.) Third, funds from a reverse mortgage will not affect Social Security, Medicare or pensions because they are considered “tax free” income.  They also are not declared on tax returns as income.

4.) Fourth, you retain the title to your home and it stays in your name.  There is not a transfer of ownership just because you drew upon the equity of your personal asset.

5.) Lastly, you can access the funds in various ways including monthly payment, a line of credit, a lump sum, or as a purchase.  And the funds can be used however you see fit.  Borrowers can even use a reverse mortgage to buy a new home via the Reverse Mortgage for Purchase program allowing the home purchase and the reverse mortgage loan transaction to take place at the same time.  This a great option for those who wish to be close to family, in a desired location or have a place that fits your new lifestyle, or even move to your retirement dream home.

Reverse mortgage are available to seniors 62 and over all over Colorado.  To learn more, contact a reputable reverse mortgage lender.

Jan Jordan is a Reverse Mortgage Specialist serving the Windsor, Erie, Johnstown, 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 to learn if reverse mortgage is right for you.

Reverse Mortgage For Purchase or Cash Purchase? Here’s What You Need To Know

FHA Eases Condo Rules, Expanding Reverse Mortgage MarketIn this day and age, buying a home with cash is rare.  And not because of the reasons you may think – such as who has that much cash nowadays?  Well, that is part of the reason, but it’s a little more complicated than that.  Those who have a substantial amount of cash are finding there are no homes available in their price range and suddenly they don’t have enough cash to be a true “cash buyer”.  This diminishes their hopes of living mortgage payment free.  For example, if a retired couple sells their home or allots other funds amounting to $170,000 for a new home, they will suddenly be facing a new dilemma – finding a home to meet their needs, that doesn’t need repairs, and is in the community they wish to live.  With home prices dramatically increasing in the across Northern Colorado, this scenario is playing out ever more often.

This is where the Reverse Mortgage for Purchase program can provide a solution.  Not only will the program add funds to the buyer’s available cash making up the difference needed to purchase an appropriate home, it will also allow that buyer to live mortgage payment free.  In addition, putting all your cash into one asset can be a scary thought, especially later in life when the future is largely an unknown, and security is a necessity.  When adding a reverse mortgage into the equation, cash home buyers can consider keeping some of the cash or invest it elsewhere.

Here’s how it works:

For seniors 62 and over, home buyers are able to use a reverse mortgage to purchase a home.  The amount of the down payment required from the buyer will depend on the amount of the home they are purchasing.  But unlike a conventional loan, not only will the lender provide the funds to make up the difference between the home price and the down payment, the buyers will be able to live mortgage payment free for as long as they remain in the home.  This frees up income for other things – such as secure retirement living, medical expenses, in home care, vacations, or anything else they may desire.  A Reverse Mortgage for Purchase can be used to buy single family homes, town homes, and FHA approved condos.  New construction can be purchased, but it must have a Certificate of Occupancy before the loan application can be accepted. The home being purchased will need to be the buyer’s primary residence and the required down payment will need to come from a HUD approved source.  And just like a conventional mortgage, the buyer will always retain the title to the home.

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Dacono, Broomfield, 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.

Reverse Mortgage HECM Line of Credit : What You Need To Know

reverse mortgage loveland fort collins greeley longmont westminster coloradoThe HECM Reverse Mortgage Line of Credit is still relatively new, and to this day many within the financial and retirement industries haven’t fully grasped how it works.  Well, they need to get on board because consumers are interested – and they should be.  Here’s why..

First, what is a line of credit?  Simply put, a line of credit are funds available to you through a financial institution that you can access as needed, or not at all if the need doesn’t arise.  Interest is not acquired if the funds are not used.  This makes line of credit options excellent safety nets, especially for the purpose of creative retirement strategy.

When looking at a HECM Reverse Mortgage Line of Credit, the two are obviously intertwined, meaning the qualification requirements for any reverse mortgage still apply.  These are: age 62 and over, using your primary residence for the loan, this home must meet HUD’s guidelines and needs to be either paid off or have substantial equity, and the borrower must have the financial capability to continue to pay homeowners insurance, property taxes, and the like. Because there are various options to receive the payout from a reverse mortgage, the line of credit is only one of them.

When you have a reverse mortgage line of credit, you have money that is available to you — but you only accrue interest on the money you withdraw.  This means the reverse mortgage line of credit can act as an excellent back up source of funds or can be used for retirement fun, whether it be vacation, spoiling grandchildren, or knowing you have the funds available when you’re ready to take on new ventures.

There are other benefits though.  This line of credit is pretty astounding beyond just being a safety net.

Growth: Not only are you not paying interest, but your untouched reverse mortgage line of credit can grow in value. Money in a reverse mortgage line of credit grows at the same rate as the interest rate on the loan PLUS 1.25% monthly.  So, if the interest rate on your reverse mortgage is 2.50%, then your line of credit will grow at 3.75% (2.50% + 1.25%).

Unique: This growth is unique to reverse mortgage lines of credit — a HELOC for example does not grow.

Hedge Against Falling House Prices: The growth in a reverse mortgage line of credit is guaranteed — without withdrawals, your line of credit is guaranteed to grow.  This means you lock in the current value of your home without taking out an interest acruing loan.

Pretty great, isn’t it?

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.