Retirement Archives - Page 2 of 11 - Colorado Reverse Mortgage Specialist

Category: Retirement

Senior Home Equity Falls – What It Means For Reverse Mortgages

Posted on April 27, 2023May 9, 2023 by janjordan

For the first time in 12 years, senior home equity has fallen, according to the Reverse Mortgage Lenders Association (NRMLA). The decline in home equity has resulted in the collective senior housing wealth sliding from a peak of $12.42 trillion in 2022 Q3 to $12.39 trillion in Q4. According to NRMLA, the dip in equity resulted from a $30 billion increase in senior mortgage debt, while home values remained flat due to the cooling housing market.

A reverse mortgage can be a smart financial decision for seniors, even when senior home equity is declining. The amount of funds someone can receive from a reverse mortgage is based on the value of their home among other factors, so a decrease in home equity can potentially impact the amount of money that can be borrowed. However, even in times of declining home equity, a reverse mortgage can still be a valuable source of income for seniors.

One important reason why it’s important to consider a reverse mortgage now, even as senior home equity is declining, is that home values were previously at their peak. This means that many seniors may still have significant equity in their homes, even if the value has declined somewhat. By taking out a reverse mortgage, seniors can access that equity and use it to supplement their retirement income, cover expenses, or make improvements to their home.

Furthermore, a reverse mortgage can provide a valuable source of financial security, even if the value of the home has declined, because these loans are FHA insured. This means a borrower will never owe more than the balance of the loan OR the current value of the home, whichever is less. Seniors who have a lot of equity tied up in their homes may feel anxious about the impact of declining home values on their financial security. A reverse mortgage can provide a reliable source of income that’s not dependent on the value of the home, which can provide peace of mind and reduce financial stress.

Finally, it’s important to remember that a reverse mortgage is just one option for seniors who want to access their home equity. Depending on individual circumstances, other financial products or strategies may be more appropriate. It’s important to carefully consider all available options and consult with a reputable reverse mortgage lender before making a decision.

In conclusion, while declining senior home equity can impact the amount that can be borrowed with a reverse mortgage, it’s still a valuable financial tool for seniors 62 and over. By providing access to home equity, even in times of declining home values, reverse mortgages can provide a reliable source of income and financial security. But it’s important to consider a reverse mortgage now, while home values are still relatively high, to take advantage of this valuable asset.

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.

Retirement Worries And How A Reverse Mortgage Can Help

Posted on April 6, 2023 by janjordan

Many older Americans are concerned about having enough money to retire comfortably. In fact, a recent survey found working Americans age 45 and older expect they will need about $1.1 million in savings in order to retire, but only 21% of people in that age group expect to have even $1 million. That’s down slightly from the 24% in 2022 who said they expected to save that much. The survey also found that 59% of those workers expect to have less than $500,000 saved for retirement, including 34% who said they will have less than $250,000.

The traditional approach to retirement planning has been to accumulate a significant nest egg through saving and investing. However, for some people, this may not be enough. This is where a reverse mortgage can help.

A reverse mortgage is a type of loan that allows homeowners to convert home equity into cash without having to sell their home or make monthly mortgage payments. Instead, the comes due when the borrower sells the home or passes away. Reverse mortgages can be an attractive option for retirees who want to access the equity in their homes to supplement their retirement income.

For many retirees, their home is their largest asset. According to the National Reverse Mortgage Lenders Association, homeowners age 62 and older had $11.81 trillion in home equity in the third quarter of 2022. A reverse mortgage can provide a way for homeowners to tap into that equity and use it to fund their retirement.

One way to use a reverse mortgage is to establish a line of credit. This allows homeowners to access funds as needed, without having to take out a lump sum loan. The line of credit can be used to pay for expenses such as healthcare costs, home repairs, or travel. Unused funds in the line of credit will continue to grow over time, providing an additional source of income in retirement.

Another way to use a reverse mortgage is to take out a lump sum loan. This can be useful for retirees who need a large sum of money upfront to pay off debts or make a major purchase. The lump sum can also be used to supplement retirement income or pay for long-term care.

A reverse mortgage is a FHA backed loan available to seniors 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.

Using Home Equity In Retirement

Posted on March 10, 2023March 8, 2023 by janjordan

Did 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 Your Traditional Mortgage

Posted on February 24, 2023March 8, 2023 by janjordan

It’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.

Reverse Mortgage Line of Credit: What You Need To Know

Posted on January 6, 2023January 19, 2023 by janjordan

The 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.

How A Reverse Mortgage Can Provide Financial Security

Posted on October 27, 2022November 12, 2022 by janjordan

The reverse mortgage of today is NOT your mother’s reverse mortgage. The once shamed program is now helping seniors from all different walks of life fill retirement gaps and provide protection and stability through their golden years. Financial advisers and retirement planners are beginning to incorporate a reverse mortgage into retirement portfolios at the beginning of retirement, rather than using them as an emergency life line once the “nest egg” has been exhausted.

Through the use of a strategic FHA insured reverse mortgage, retired homeowners are able to use the equity in their homes as an available line of credit for life – without being required to make a monthly mortgage or loan payment. That’s right – a reverse mortgage CAN provide Colorado’s seniors with guaranteed cash flow for life – as long as they continue to live in the home and keep their property taxes, homeowners insurance, and HOA fees up to date. The funds can be used for whatever the borrower deems fit – additional income, medical expenses, vacations, home repairs or modifications, gifts, etc.

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.

Is Your Financial Planner Talking To You About Reverse Mortgages?

Posted on October 13, 2022October 17, 2022 by janjordan

When financial planners counsel retirees on how to best leverage their retirement portfolio, social security, and other assets, considering a reverse mortgage was long not part of that conversation – but this is beginning to change.

As the myths of the industry are laid to rest, many professionals are beginning to better understand how reverse mortgage can be used as a financial planning tool for seniors who are on a strict budget or who want to live their golden years to the fullest. Reverse mortgages can often mean the difference between just living and living life to the fullest.

A few tips for financial planners:

Seek out and work with a reputable reverse mortgage specialist who has strong ties to the community, lends from an organization that is a member of the Better Business Bureau, and is associated with the National Reverse Mortgage Lenders Association.
Make sure you fully understand the information you may be offering your retiree client. With the amount of misinformation within the industry, if you are not 100% sure of an answer, call your trusted reverse mortgage specialist to ensure the information you are providing is accurate.
Communicate with adult children who may have concerns and make sure they fully understand the process from A to Z. Eliminating misinformation is key.
Remember, reverse mortgages are not one-size-fits-all. Be creative and comprehensive when considering adding a reverse mortgage to a long term retirement plan.

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 Line Of Credit Underutilized Retirement Tool

Posted on October 6, 2022October 17, 2022 by janjordan

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

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

Pretty great, isn’t it?

Interest Rates And Your Reverse Mortgage

Posted on September 29, 2022October 17, 2022 by janjordan

Interest 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.

The Changing Needs Of Housing For Older Adults

Posted on September 22, 2022October 17, 2022 by janjordan

If you find yourself yearning for a retirement of comfort in your own home in a community you love, you are definitely not alone. Here are some pretty telling facts and statistics surrounding the desires of older adults in the U.S..

According to research by the American Association of Retired Persons (AARP):

Nearly 90 percent of seniors want to stay in their own homes as they age.
Even if they begin to need day-to-day assistance or ongoing health care during retirement, 82% would prefer to stay in their homes.
Most pre-retirees expect they will be able to live independently during retirement; only 14% expect they will need day-to-day assistance or ongoing health care at any point during their retirement.
Thinking about parents’ getting older is on the minds of 88% of adult children.
75% of adult children and 69 % of parents think about the parents’ ability to live independently as they get older
AARP identified housing features that seniors find are especially important in the later years: – Safety features such as non-slip floor surfaces (80 percent)– Bathroom aides such as grab bars (79 percent)
– A personal alert system that allows people to call for help in emergencies (79 percent)

– Entrance without steps (77 percent)

– Wider doorways (65 percent)

– Lever-handled doorknobs (54 percent)

– Higher electrical outlets (46 percent)

– Lower electrical switches (38 percent)

From the National Assocation of Home Builders:

75% of remodelers report an increase in inquiries related to aging in place.
The NAHB predicts that aging in place remodeling market to be $20-$25 billion. That’s about 10 percent of the $214 billion home improvement industry.

According to the MetLife Mature Marketing Institute:

91% of pre-retirees age 50 to 65 responded that they want to live in their own homes in retirement. Of that group, 49% want to stay in their current homes, and 38% want to move to new homes

Whether it’s the desire to simply stay put through retirement, or to make modifications to the home, or even to purchase a new home, a reverse mortgage is a flexible tool to help finance any of these.

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.