Author: janjordan

Reverse Mortgages Helping the Elderly Age at Home

reverse mortgage loveland fort collins greeley longmont westminster coloradoAs traditional forms of elder care continue to be overshadowed by numerous other options, reverse mortgage is often helping senior individuals stay in their homes while they age.  Since reverse mortgages can open up opportunity to turn home equity into liquid cash, without having to move or make a mortgage loan payment, seniors and their families are using this opportunity to pay for care that would otherwise not be covered by basic Medicare or Medicaid.

Traditionally, “long term” elder care takes place in a nursing home or assisted living facility.  Medicare or Medicaid will often cover these expenses. but there is little public assistance for “in-home care”, although it varies from state to state.  As economic woes lend to retirement fears, reverse mortgage is more commonly being utilized for what it can do best, provide security for those most in need and offer a longer-term lifeline without disrupting the lives of the recipients.

Studies have shown that the benefits of aging in place can be enormous for the right candidate.  Not only can a move be both emotionally and physically challenging on a senior, especially one with medical concerns, it’s known that the quality of life tends to increase when seniors maintain their independence and their community ties.  Benefits include:

  • Comfort.  We all know the saying “There’s no place like home”, but this is often especially true when a senior has lived in a home for years or has lost a spouse.  Uprooting from such familiarity can have drastic affects.
  • Community Ties.  More often seniors are developing strong community ties well into their retirement years.  Family and friends are wonderful for grounding an aging loved one.
  • Independence. Remaining independent keeps seniors healthier than ever realized before.  It also allows them to continue doing many of the things they have always done and enjoyed.
  • Mentality. Our home life strongly impacts how we feel mentally. If a senior stays home to age they are likely to feel much better and happier than one that has been put into a nursing home or assisted care facility.

A reverse mortgage can help seniors 62 and over tap into their home equity regardless of income or credit.  For more detailed information on how a reverse mortgage works, click 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.

Assisted Living or Reverse Mortgage: Pros and Cons

reverse mortgage colorado fort collins loveland greeleyIn our society, the elderly and nursing homes go hand in hand.  But when speaking with elderly people, one of their biggest fears is being placed into a nursing home.  Who can blame them?  According to National Center on Elder abuse, one study interviewing 2,000 nursing home residents reported that 44% said they had been abused and 95% said they had been neglected or seen another resident neglected.  When considering the psyche of an older senior, nursing homes or convalescent homes mean “end of life”.   Often times adult children don’t know a better solution as the needs of the parents increase, the home is no longer suited for their parent, and/or they do not have the funds or the time for in home care.   Reverse mortgages have been helping seniors in need for years.  But now as retirement planners are realizing the benefit the can offer long term, they are now being used more proactively.

Reverse mortgage is a great method to finance in-home care to avoid nursing homes, pay for medical care, and even fund home modifications.  For seniors who are looking to situate long term and prepare to live their golden years in their own home, a move to a new residence closer to family or more suited for senior life may be in order.  The reverse mortgage for purchase is perfect option for these situations.  Reverse mortgage for purchase allows the purchase of a different residence using a reverse mortgage while still employing the perks of a traditional reverse mortgage – living mortgage payment free.  In addition, reverse mortgages do not affect social security, pensions, or medicare.

Both reverse mortgage for purchase and traditional reverse mortgage are available to seniors 62 and over.  The home must be the primary residence and it must be a HUD approved property type.

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 yo

Watching Out For Identity Theft

According to the 1998 Identity Theft and Assumption Deterrence Act identity theft is when someone “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law.”

The three most common types of identity theft are:

  • Financial identity theft (using another’s identity to obtain credit, goods and services)
  • Identity cloning (using another’s information to assume his or her identity in daily life)
  • Medical identity theft (using another’s identity to obtain medical care or drugs)

How does Identity Theft happen?

In today’s technology driven society, protecting your identity is more important than ever.  But don’t assume identity theft only happens online.  It can happen anywhere, anytime.  Someone could be watching over your shoulder as you fill out a form at your doctor’s office.  Another individual could be rummaging through your trash, hoping to find a tossed out credit card offer.  Your email program’s spam filter may not be blocking those emails from Phishing websites.  There are many ways to fall victim to identity theft, arming yourself with facts and prevention is key to protection.

How do I protect myself from Identity Theft?

  • Be aware of your surroundings.  When filling out forms that include private information, take a seat away from others when possible. Never throw out forms or paperwork that may have your personal information on them, always take these home with you and dispose of them properly.
  • Don’t toss out credit card offers or other junk mail that pertains to obtaining credit.  In addition, any other private information you have – bills, car registration, insurance documents, bank statements – should always be disposed of properly and NEVER put out with your household trash.  These items should be shredded or burned.  In addition, limiting the amount of junk mail you receive by “opting out” of mail distribution lists can vastly decrease your risk.  Opt out by calling 1-888-5-OPTOUT.
  • Never follow links to bank accounts, credit accounts, PayPal accounts, etc from an email.  “Phishing” emails may appear as a completely legitimate email from your bank or credit card company, warning you of unauthorized transactions or other alarming information.  These emails will include links that take you to a website that looks identical to your bank’s – but it’s not.  Once you enter your information into this “Phishing” site, you have given some of your most valuable financial information to a con-artist.  ALWAYS access your bank and credit accounts by entering their web address into your web browser, NEVER through a link.  Reputable companies will not contact you via email about such important matters.
  • Don’t respond to emails offering money in exchange for “helping” an individual transfer money into the country.  These are always scams and have proven to be very dangerous.
  • Password protect your computer and your wireless internet. Use firewalls and virus protection software.
  • Never give personal information to telephone solicitors or door to door solicitors.  Do not give out personal information over the phone unless you placed the call yourself.
  • Lock your car.  Identity theft via “glove compartment” information is on the rise.  Keeping your car locked can ensure you are not an easy target.
  • Don’t carry your Social Security card in your wallet or purse.  Purge expired credit cards, insurance cards, and ID’s regularly.  Keep these items at home in a safe place.
  • If you do not have a locking mailbox, do not mail payments using your mailbox.  Always take the mail directly to the post office.

What do I do if think I’ve been targeted?

Contact the Federal Trade Commission at 1-877-IDTHEFT or www.ftc.gov

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 vs HELOC vs Downsizing

reverse mortgage loveland fort collins greeley longmont westminster coloradoHome equity accounts for approximately 70% of a senior’s assets, not including social security or pension.  Often times tapping into this equity becomes inevitable when facing health crisis or financial restrictions in retirement.  Using home equity should be part of a larger financial plan and there are a few ways it can be incorporated.

Reverse Mortgage

reverse mortgage is available to seniors 62 and older with married couples being eligible to both be on the loan if both meet the age requirement.  Homeowners who obtain these loans do not make monthly mortgage or loan payments but  instead receive the funds in a variety of available options, including monthly installment and a line of credit.   The loan does not have to be repaid until the last borrower passes away, at which time there are options available to heirs.  The amount of the loan depends on the amount of equity in the home and the age of the borrowers – the older the borrower, the more money they can receive.  This is an excellent option for both seniors with questionable retirement funds or the retiree who is looking to boost their portfolio.

Home Equity Loan

home equity loan (HELOC) also taps into equity by borrowing money against the home.  This type of loan will be processed as a conventional loan and monthly payments will need to be made to the lender.  Any health or future financial concerns should be thoroughly thought through prior to taking out a home equity loan.  Loading up the home with debt during retirement can be risky and could result in loss of the home if the borrowers are unable to make their monthly payments.

Downsize

Another option would be to downsize all together by selling the existing home and moving into a more modest situation.  Depending on the amount of equity in the home, a homeowner may be able to sell the home for enough money to comfortably be able to make rent or mortgage payments for 10 to 20  years.  Just as with a home equity loan, this option could be risky for a person with health concerns as the funds set aside for housing could be needed elsewhere.  For homeowners looking to downsize, a Reverse Mortgage for Purchase is also a very good option.  This will allow the borrower to move into the home they desire AND eliminate mortgage payments.

Before making any major decisions regarding how to effectively use the equity in your home, it is best to consult with a financial adviser and a reputable reverse mortgage lender.

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.

Would You Have These Things In Order If Your Spouse Passed Away?

reverse mortgage loveland fort collins greeley longmont westminster coloradoRegardless of age, losing a spouse is difficult – and the impending “business” that comes along with it doesn’t make it any easier.  This is why we should all ask ourselves at some point, “Am I prepared if my spouse dies?”.  There are so many various aspects to being “prepared”, and although I can’t help with many of them, I can help with some simple suggestions to making sure you aren’t stuck with unexpected questions.

It’s not uncommon in marriages or partnered relationships for each spouse to take care of different bookkeeping tasks.  For example, it’s very common for the husband to manage retirements funds – pensions, IRA’s, etc.  While the wife may handle personal address books or paying bills.  Take a minute and think about this?  Not only what  you may not know, but what your spouse may not know.

Here are some suggestions to putting this information in order:

• Begin by making a list over a week or two, and ideally an entire month.  Make note of what “business” you do.  How many passwords did you need online?  How many account numbers on the phone?  What about PINs?  The results may surprise you.  In today’s high tech yet overly scammed world, everything is secured under lock and key.

•  Although it is best if both spouses can contribute to this exercise it is not a requirement.  Either way, spend some time brainstorming together.  We often will remember things when discussing them with someone else.

• It’s important to make a physical list of this information, whether typed or handwritten.  What you shouldn’t do though is save this information online.  Hackers will seek data that includes account numbers, logins, and passwords and this could lead to compromising your accounts and even identity theft.  Even if you think it’s secure, there really is little guarantee that is true.  Keeping this list with your most important documents – such as birth certificates, titles to homes and vehicles, etc – is going to be your safest bet, but make sure both spouses know where to find it.

What to include on your list:

Name and phone number of company, account numbers and any PINs associated.  If using online management of account, include website URLs of where to login, login name and password, and any auto pay information.  If there are specific people you work with at these companies, include their names.

If only one spouse is listed on the account, make an effort to add the other one.  I recently witnessed an elderly woman at the DMV who was unable to renew her driver’s license because all the mail that came to the home was in her husband’s name.  This is more common than many people realize – and often they don’t even know until they’re caught in jam.

• Home loan
• Home insurance
• Car loan
• Car insurance policies
• Health insurance policies
• Life insurance policies
• Bank accounts
• Credit card accounts
• Pension, IRA, annuities, etc
• Utilities – electric, water, gas, phone, trash
• Facebook, LinkedIn, etc
• Contact information for family and friends
• Contact information of bankers, retirement or financial planners, loan officers
• Contact information for doctors, dentists, pharmacies, veterinarians, etc (and a little info about what each one is for)

These lists will vary from person to person, so make sure to add your own ideas.  Also be sure to update it when anything changes or is added – because hopefully you won’t need it for quite a few more years!

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.

5 Reverse Mortgage Myths That Need To Go Away

Reverse mortgages have made a serious comeback in the past several years.  After regulation changes were enacted in 2015, the reverse mortgage loan once considered a desperate lifeline is now being used as a retirement tool for even the wealthy.  The loans are still only available to seniors 62 and older (including married couples) with the amount of funds available increasing depending on age and appraised value of the home, but now those funds are often being accessed in ways not available before – such as a line of credit or to purchase a home.  This really is not your mother’s reverse mortgage, it’s something much more versatile than it was years ago.

Here are some lesser known facts about today’s reverse mortgage:

1.)  I’ve said it before and I’ll say it again – the borrower will always remain the homeowner as long as basic responsibilities such as property taxes are paid, homeowners insurance is kept current, and utilities and HOA fees are paid.  One of reverse mortgage’s scariest myths has always been that a bank will own the home.  This couldn’t be further from the truth.  Not only will the borrower remain the homeowner, they will also retain the title.

2.) There are NO mortgage or loan payments.  That’s correct.  Regardless of how the borrower decides to utilize the reverse mortgage funds, they will not pay a loan or mortgage payment while they remain in the home.

3.) With a Reverse Mortgage for Purchase, borrowers can wrap both the home purchase and the reverse mortgage into the same transaction allowing them to buy their dream home – AND the reverse mortgage will substantially supplement purchasing power allowing a home to be purchased that may have once been out of their price range.  When using a Reverse Mortgage for Purchase, the borrower is required to provide some down payment and the reverse mortgage funds will make up the rest of the purchase price.

4.) Married couples can both be on the loan regardless of how the funds are utilized.  Another all too common myth is that in the case of a married couple, if one spouse passes away the other spouse will be evicted.  When working with a reputable reverse mortgage lender this should never happen.  As long as both spouses are 62 or over, they can both be on the loan allowing either borrower to stay in the home until the last spouses passes away or permanently leaves the home.

5.) Heirs are not “saddled” with the debt of a reverse mortgage.  After the borrower(s) pass away, there are several options as to what the heirs can do with the home.  And in today’s hot housing market, the home may gain equity that can be available to the heirs.  Most all reverse mortgages are FHA insured meaning the loan will never exceed the amount of the home sale – even if more is owed, and it also means it will only ever require the amount of the loan even if the home is worth much more when it comes due.

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Dacono, Fort Lupton, Windsor, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado.  Contact Jan and learn if reverse mortgage is right for you.

Yes, You Can Use A Reverse Mortgage To Purchase A Home or Condo

reverse mortgage loveland fort collins greeley longmont westminster coloradoReverse Mortgages, once typically thought to only help struggling seniors, have undergone enormous changes recently and are being used to help even affluent retirees achieve their retirement dreams and home buyers purchase new homes.

The Reverse Mortgage for Purchase program is quickly gaining in popularity. This program allows seniors to purchase a home using a reverse mortgage and live mortgage payment free. To qualify for this program, borrower(s) simply need to be age 62 or older, be purchasing a home to become their primary residence, and have their “required investment”. There are no income or credit requirements and just like with any other type of home loan, the borrower will still be the homeowner and will always retain the title. In addition, similar to a homeowner who owns their home free and clear, there will not be a monthly mortgage payment but the borrower will still be required to pay property taxes, homeowner’s insurance, HOA fees, and basic upkeep and utility payments.

The borrower can use this loan to purchase single family homes, town homes, and FHA approved condos. Unfortunately, these loans cannot be used to purchase homes under construction and the home must have a “Certificate of Occupancy” issued prior to starting the application process.

As mentioned above, the borrower will need to have their “required investment” or down payment. This amount 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, and the current expected interest rate. There are many examples available of these numbers to help real estate professionals and borrowers determine the price bracket they should search based on the required investment they have available.

Unlike a traditional mortgage where the loan reaches a “maturity date”, reverse mortgages have a “maturity event”. This is the event which causes the loan to become due and payable. These “events” include: the last remaining borrower passes away, the homeowner sells the home, the last remaining borrower leaves the home for 12 consecutive months, or the homeowner defaults on property taxes or insurance.

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 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 Boulder, Longmont, Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.  Click here to contact Jan and learn if reverse mortgage is right for you. 

Should You Be Considering A Reverse Mortgage To Buy A Home?

reverse mortgage loveland fort collins greeley longmont westminster coloradoWe’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 in 2017, 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 Erie, Dacono, 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.

Why The Reverse Mortgage Line Of Credit Is So Unique

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 Erie, Firestone, Fort Lupton, 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 Counseling: What To Expect

Reverse Mortgage Loveland Fort Collins Denver Boulder Longmont Greeley ColoradoPrior 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 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.

Here is what you can expect at your counseling session:

The potential borrower will need to schedule an appointment directly with a counseling agency. The lender does not initiate or take part in the session, but can provide you with resources to seek out a counselor. The session will take place in person or over the phone – although the FHA recommends a face-to-face meeting whenever possible.

Prior to your appointment, the counseling agency will provide you with a packet of information to allow you to prepare for the session. During the session the counselor will discuss your immediate and long-term financial needs, your reasons for seeking out a reverse mortgage, address any questions or concerns you may have, and clearly educate you on the process as well as the pros and cons of a reverse mortgage. Again, they are not there to “sell” you on the product, but to educate instead.

Once you have completed the counseling session, you will be provided with a “Certificate of Completion”. This certificate verifies to your lender that you have completed the counseling session and that you understand the essentials of a reverse mortgage. Your counselor will also follow up with you to ensure you have no further needs, questions, or concerns.

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 to learn if reverse mortgage is right for you.