Category: Reverse Mortgage Info

How To Use Home Equity In Retirement

reverse mortgage loveland fort collins greeley longmont westminster coloradoDid you know home equity can be used to reduce the overall risk of your retirement plan? Your house is a great asset that for many years has been overlooked in financial planning for seniors. This is making a sharp turn lately as retirement experts are beginning to understand how tapping into home equity via a reverse mortgage should never be underestimated.

Let’s take a look at where most seniors sit currently when it comes to retirement…

• Only 22 percent of workers are very confident they will have enough money in retirement.

• 45 percent of Americans have saved exactly nothing—zero.

• The expected lifespan of women is 20 years past the age of retirement, and two years longer than men.

• The average retiree can expect to spend $220,000 in out of pocket health care costs during retirement.

• Medicare pays for an average of 62% of a seniors health care costs, leaving 38% to come out of pocket.

• 36% of up and coming retirees will rely on Social Security as their sole income.

A reverse mortgage can help in many different ways – and the how the funds are spent is entirely up to the borrower. Whether it’s a monthly payout or a line of credit, when combined with other retirement planning tools, reverse mortgage can allow retirees financial security during the years they worked so hard to enjoy.

Reverse mortgages are available to senior homeowners 62 and over – even married couples. They will live mortgage payment free, always retain the title to the home, and because these loans are FHA insured non-recourse, no one – including heirs – will find themselves saddled with the debt after the owner passes. There are also various solutions for adult children or other family members who may want to keep the home in the family.

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.

Use A Reverse Mortgage To Eliminate A Traditional Mortgage

reverse mortgage loveland fort collins greeley longmont westminster coloradoIt’s not uncommon that I get questions about why a senior may want to use a reverse mortgage to pay off an existing conventional mortgage loan.  This scenario would vary from person to person, but in the long run, if the equity in the home can eliminate a mortgage payment without acquiring another loan payment, it’s often a win-win. 

A reverse mortgage is essentially a home equity loan in which the borrower is not required to make payments. The homeowner must be at least 62 years old and meet certain income and credit guidelines.  Although a reverse mortgage does accrue interest, it does not have to be repaid until the last borrower passes away or leaves the home permanently. Almost all of these loans are FHA insured.  There are certain things like property taxes and HOA fees that the homeowner will still be responsible for. 

Here is a scenario:

Barbara is a 75-year-old widow with a house worth $495,000. She still owes $125,000 on her conventional mortgage, with no other mortgage debt such as a HELOC.

Based on her age and the home’s value, she can get a reverse mortgage that would not only pay off her mortgage but give her extra funds as well that could be accessed via a line-of-credit.

She could live mortgage payment free for the remainder of her time in the home.  

A common question with reverse mortgages is who technically owns the home?  The borrower does.  They will retain the title and can make modifications or upgrades to the home.  

In addition, this is a great option for eliminating a HELOC (home equity lines of credit).

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.

Are Reverse Mortgages An Under Utilized Resource?

Two or three decades ago, the idea that an elderly couple or individual could live comfortably in their home far beyond retirement was practically unheard of.  Preparing for aging meant retirement homes, assisted living, or moving in with adult children.  Now today people are living longer and healthier lives than ever, but on the flip-side, they are retiring with less.  The Pew Research Center has found that the percent of adults who said that they “will not have enough money to live comfortably” in retirement rose from 32% to 53% in ten years. Among adults in the 55 to 64 age bracket, the percent who are “not too” or “not at all” confident that they will have enough to live on in retirement rose from 26% in to 39%.  These are alarming statistics.

Many seniors can improve their retirement outlook by considering a reverse mortgage, but very few use it as a retirement tool.  Homeowners, 62 and over, qualify for these FHA insured loans.  When creating a retirement portfolio, looking into home equity and a possible reverse mortgage can often mean the difference between getting by and living well.

So why is this option not utilized more often?  It is usually for one of two reasons: senior homeowners are either unaware or uneducated on the option, or negative public perception has steered them away.  Media coverage may report a negative story, but will fail to include the facts as to why these situations happened in the first place and how they can be prevented.  The majority of reverse mortgages are favorable experiences, although this is not considered newsworthy.  Some financial advisers or retirement planners are ambivalent to reverse mortgages, not adequately educating their client on this possibility.  It’s important to stay educated while watching out for scams.  And working with a reputable lender is critical when going through the reverse mortgage process or obtaining information to share with others.

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

Holidays May Leave Adult Children With Lingering Concerns

reverse mortgage loveland fort collins greeley longmont westminster coloradoWith the holidays now behind us, many families are reflecting on their experiences.  Adult children enjoyed spending time with their aging parents or relatives, grand children and great-grand children were squeezed and showered with adoration.  For some spending time with family is an encouraging sign of many happy years to come…but for others, it can be a time that raises concern about health or finances, and questions about how aging  parents will continue to cope.  Will this person need additional care?  Do they need a more adequate home closer to family or suitable for aging in place?  How does long term retirement look?

Concerns such as this are very common around the holidays.  To better guide you in the right direction and ultimately direct the family in the right direction, here are some questions to ask yourself:

• Are they able to get around by him or herself? Are there stairs in the home?

• Is this person able to take medications without assistance? Is there a health concern that would require more regular supervision, such as Alzheimer’s or Parkinson’s?

• Is your parent able to manage mortgage payments, home-owners insurance payments, and property taxes. Is the home outdated and in need of frequent repairs – such as a furnace, roofing, electricity?

• Where is this home located? Is it in close proximity to relatives, hospitals, etc? Or is it secluded and away from town?

• Is this person lonely? Has he or she suffered the loss of a spouse? Does he or she have a solid social group or close friends?

Based on your answers to these questions, aging at home may be an option for years to come – and reverse mortgage can be a solution to many problems even for married couples. Reverse mortgages allow homeowners age 62 and older to access equity in their home, without acquiring a loan or mortgage payment, and the funds can be accessed via a line of credit, monthly installments, a lump sum, and even as a new home purchase. The homeowner will always retain the title and remains in the home. All reverse mortgages are government insured with an FHA backed loan and no repayment is due until the last borrower passes away or permanently leaves the home. At that time there are several options that include keeping the home in the family. If selling the current residence and moving into a new home is a more reasonable route, Reverse Mortgage for Purchase may be an option.

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.

FHA Backed Reverse Mortgages Offer Protection For Heirs

Jan Jordan Blog : Reverse Mortgage Loveland Fort Collins Greeley Longmont ColoradoIf you’ve taken the time to learn even a little bit about a reverse mortgage, it’s likely you’ve heard the term “FHA insured” at least a couple of times.  But what exactly does it mean?

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.

How A Reverse Mortgage And Social Security Can Work Together

Reverse Mortgage for Purchase Loveland Fort Collins Greeley Longmont Westminster Colorado Cheyenne Laramie WyomingWhen planning for retirement, there will no doubt be a discussion about when a retiree should start taking their Social Security benefits.

There are perks to delaying, for example Social Security benefits stand to increase as much as 7-8% per year if you don’t apply until age 70.  But many seniors need this income.  With the ability to apply for a reverse mortgage at the age of 62, and current low interest rates, retirees stand to actually make gains by using a reverse mortgage to supplement while delaying benefits.

When approved for a reverse mortgage, the borrower can choose from a variety of ways to access the funds.  It could be a monthly installment, a lump sum, or even a line of credit that in itself stands to grow over time.

This is a creative way to use the hard earned equity in your home to your benefit.  A well educated financial advisor would easily be able to help you decide if this is a good option.  Reverse mortgages are available to seniors 62 and over, including married couples, with an approved type of home.  The borrower will always retain the title to the home and reverse mortgages are insured by the FHA.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Lupton, Erie,  Lafayette, 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.

Worried Your Heirs Will Be Responsible For Your Reverse Mortgage? Here’s What You Need To Know

A common question and concern surrounding reverse mortgage is what will happen to the home after the homeowners pass away?  Will the bank take possession?  Will it be allowed as inheritance?  Will it be possible to keep the home in the family?  Will the family of he deceased be held liable?  These are very valid concerns – so I’d like to offer some clear and concise guidance.

When the last homeowner passes, whether we’re talking about you or a loved one, the home will transfer into the estate or a specific person according  to the wishes expressed in the homeowner’s will.  At this time there are three main options:

1.  Pay off the remainder of the loan

Depending on the amount of equity that still exists in the home, the financial situation of the family, and just the overall ability of those involved, this may or may not be a feasible option.  It’s not uncommon for a portion of life insurance to be used in this manner.  Because these loans are FHA insured, if the loan is repaid, it will never be more than the home is worth – even if the housing market is in a deep low spot.

2. Obtain a conventional loan.

Many mortgage brokers are familiar with the reverse mortgage process and the right broker will be able to help those in need identify the best route in obtaining a conventional loan and keeping the home.

3. Sell the home

The final option is to sell the home.  When there is not a desire to keep the home, the heirs can sell the home.  When the home is sold, the loan will be repaid and any remaining equity from the sale will go to the heirs.

If there are no heirs or the heirs are not interested in the home, no one will be held liable.

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.

Is A Retirement Crisis Looming?

Numbers are being released showing that the impending retirement crisis may be worse than originally thought.

Half of Americans have less than $10,000 in savings.  Nearly half of the oldest Baby Boomer generation have insufficient resources to pay for basic retirement living expenses and healthcare costs.

The Center for Retirement Research at Boston College estimates that our “retirement income deficit” is $6.6 trillion. That number represents the gap between pension and retirement savings that American households have today and what they should have to maintain their standard of living in retirement.

Over 6 million American seniors are living in poverty.  This number is expected to grow by 33% in coming years.

These stats are concerning not only for the retirees, but also their families. A reverse mortgage can help by becoming an important piece of retirement planning. Seniors 62 years and older now have the ability to fund their retirement using the equity in their homes, alleviating mortgage payments, and receiving either a line of credit, monthly installments, or occasionally a lump sum.  These funds are not taxable as income, and will continue for as long as the borrower remains in the residence. 

For many, this option makes a world of difference, allowing for the sought after prosperous retirement years instead of barely scraping by on a budget. And the reverse mortgage funds can be used for any purpose the borrower chooses, and is often used to help with every day expenses or long term medical costs.

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Lafayette, Fort Lupton, Dacono, 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 To Vet A Reverse Mortgage Lender

reverse mortgage loveland fort collins greeley longmont westminster coloradoUsing a reputable reverse mortgage lender is crucial for anyone considering a reverse mortgage, as it can greatly affect the borrower’s financial well-being and peace of mind. A reverse mortgage is a serious financial product and working with a reputable lender can help ensure that the borrower fully understands the terms and risks involved.

Here are some reasons why it’s important to use a reputable reverse mortgage lender:

  1. Avoiding scams: Unfortunately, there are many scams and unscrupulous lenders in the reverse mortgage industry. Working with a reputable lender can help protect the borrower from fraud and predatory lending practices.
  2. Clear and transparent terms: A reputable lender will provide clear and transparent information about the terms and costs of the reverse mortgage. This includes the interest rate, fees, and repayment terms, as well as the borrower’s obligations and responsibilities.
  3. Education and guidance: A reputable lender will provide education and guidance to the borrower, helping them understand the pros and cons of a reverse mortgage and how it fits into their overall financial plan. This can include counseling and education from an independent third-party counselor.
  4. Compliance with regulations: A reputable lender will comply with all applicable regulations and laws related to reverse mortgages. This includes following guidelines from the Department of Housing and Urban Development (HUD) and other regulatory agencies.
  5. Customer service: A reputable lender will provide excellent customer service, answering questions and concerns promptly and professionally. This can help the borrower feel more comfortable and confident throughout the process.

In short, working with a reputable reverse mortgage lender can help ensure that the borrower is making an informed decision and is protected from fraud and predatory lending practices. It can also provide peace of mind and a better overall experience throughout the process. When considering a reverse mortgage, it’s important to do your research and choose a reputable lender with a track record of excellent service and transparency.

Reverse mortgages are available to individuals and married couples aged 62 and over. 

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

Could A Reverse Mortgage Be The Key To Retire In Comfort?

reverse mortgage loveland fort collins greeley longmont westminster coloradoFor 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 Erie, Boulder, Lafayette, Fort Collins, Loveland, Greeley, Longmont and other Front Range areas of Colorado.  Contact Jan and learn if reverse mortgage is right for you.