Tag: berthoud

Is A Reverse Mortgage For Purchase Right For You?

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.

Applying For A Reverse Mortgage? Here’s What To Expect

reverse mortgage loveland fort collins greeley longmont westminster coloradoIf you’ve reached the point you are ready to apply for a reverse mortgage, you have likely done a fair amount of research (and if you haven’t, feel free to read through the informational articles here on my blog).  So what comes next? Here’s a quick run down of what to expect…

Age qualifications.  You’re probably aware the borrower needs to be age 62 or older to qualify, but in the case of married couples who both want to be on the loan, both borrowers will need to be 62 or older.  In addition, the loan amount will be calculated of the age of the youngest borrower, with the older the borrower, the more funds available.

Does your home qualify?  Not every residence qualifies for a reverse mortgage but many do.  The home must be HUD and FHA approved.  These include: single family or a 2-4 unit homes with one unit occupied by the borrower, as well as some condominiums and manufactured homes.  If you’re looking to purchase a home with a Reverse Mortgage for Purchase, any new construction must have a certificate of occupancy.  Once it’s determined your home qualifies, an appraisal will be done to determine it’s value.

Financial Assessment.  In some recent changes made by HUD to ensure the continued progress of the reverse mortgage industry, a financial assessment became part of the application process.  This is set up to make sure borrowers are financially stable enough to continue to pay property taxes, homeowner’s insurance, and other related costs to the home, although once a reverse mortgage is obtained on the home, there are NO mortgage or loan payments.  Although the financial assessment is similar to that with a traditional mortgage, if borrowers don’t meet the traditional criteria, there are still options through a Fully-Funded Life Expectancy Set-Aside, which is an amount drawn under the HECM that is reserved for payment of property taxes and insurance by the lender; or a Partialy-Funded Life Expectancy Set-Aside which works the same as the Fully-Funded option except a smaller reserve is drawn when borrowers meet credit requirements but not income requirements. The amount of both of these reserves is determined by the age of the borrower and the value of the home. 

During these first steps, it’s incredibly important to work with a trusted and reputable reverse mortgage advisor and lender.  You should never feel pressured or feel your concerns and/or questions aren’t being addressed.  Also watch out for scams that some homeowners can easily fall prey to. 

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.

What Do Retirees REALLY Want In Regard To Housing?

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.

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.

Can I Get A Reverse Mortgage If I Have HELOC?

reverse mortgage loveland fort collins greeleyThe short answer is – absolutely.  And as a matter a fact, reverse mortgages are great options to eliminate HELOC payments.

A HELOC is the acronym for Home Equity Line of Credit, and thousands in the Fort Collins and Loveland cities have taken advantage of it. When the housing boom was in full swing a number of years ago, the values of personal homes gave their owners a strong resource to draw upon in the form of a loan.  Unfortunately many of these loans amortized, leaving the borrowers with higher than  predicted payments.

Seniors 62 or older with a HELOC loan may be able to utilize a reverse mortgage to relieve the financial burden.  The HECM, or Reverse Mortgage, provides the borrower with non-taxable income that will not affect social security or Medicare, and can be used for whatever the borrower sees fit. The funds from the loan can also be received in various options. Seeking the advice of a reputable reverse mortgage lender can help you make these decisions.  During the application process, the HELOC will be discussed and a options of paying it off will be laid out.

If you do not presently have a HELOC but are considering one, put reverse mortgage on the table for a consideration as well. There will be advantages to both options giving you a sense of freedom to have choices.

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.

Home Equity Among Seniors Rises

reverse mortgage loveland fort collins greeley longmont westminster coloradoIn the first quarter of 2017, home equity held by homeowners 62 and over rose 2.6% to $6.3 trillion, according to data from the National Reverse Mortgage Lenders Association.  

This $200 billion increase of housing wealth is attributed to rising home values across the nation, and especially in Colorado where some of the largest spikes were indexed.  It is important to note, however, that this was slightly offset by a 0.6% increase in senior held mortgage debt, which is equal to $9 billion.  

So, what are the takeaways from these figures?  

First, now is a fantastic time for older individuals and married couples to look into a reverse mortgage while home values are up and interest rates are down.  One of the factors that determines the amount of funds available through a reverse mortgage is the appraised value of the home – the higher the appraised value, the more funds available.  On the flip side, because these loans are FHA insured, if a reverse mortgage is tapped into while home values are high, there is never a concern that more will be owed when it comes time to repay than what the home is worth at that time.  This is a comforting guarantee if the housing market were to decline in the future.   

Second, the $9 billion increase in senior housing debt signals that older homeowners are not entering retirement mortgage-free at an increasing rate, and/or they are comfortable taking on mortgage debt in retirement.  In either scenario, a reverse mortgage should be considered as it may be a viable option.  Reverse mortgages can be used to eliminate current mortgages – allowing the homeowners to live mortgage payment free.  They can also be used to purchase a new home.  This is something that all senior buyers should be made aware of while in the real estate market, as they can enjoy their new living situation AND live mortgage payment free. 

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. Adult children can help their parents plan ahead by working with a reputable reverse mortgage specialist.

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.

Understanding Different Reverse Mortgage Professionals

reverse mortgage loveland fort collins greeley longmont westminster coloradoWhen you start navigating the waters of reverse mortgages, you will undoubtedly come across MANY different companies and individuals ready and willing to help.  Flashy ads, website calculators, famous spokesmen, and more.  But who are all these people?  And what is the difference between them?  How do you know what is the best fit for YOU?

Here’s some information I think anyone considering a reverse mortgage needs to know about the various professionals who work in the industry:

Banks and Credit Unions – Most local banks and credit unions do not offer reverse mortgage loans, although sometimes the larger ones will.  Unfortunately seeking a loan through them can often mean little or no face-to-face time, and it’s not uncommon for these banks to leave the industry down the road.  At one time Wells Fargo and Bank of America were in the business, but they quit, leaving their borrowers with loans that few employees can understand and little help if reverse mortgage customers need it. 

Brokers – A reverse mortgage broker is a third party individual that is licensed by the state but doesn’t work directly with a lender, instead they essentially shop the marketplace.  When working with a broker, borrowers will pay higher fees because they will have to cover the costs of the broker.  In addition, because all transactions run through a third party, things can easily get slowed down or even stalled completely.

Direct Lender Specialists – This is the category I fall into.  Working directly with a lender that specializes in FHA insured HECM reverse mortgages, such as Retirement Funding Solutions, direct lender specialists are able to offer local, personal, face-to-face time with clients, and eliminate the need for costly third-party fees.  We are able to do all this while ensuring the smoothest, most efficient transaction possible because they are handling the loan and not farming it out to another company.

Reverse mortgages are available to individuals and married couples age 62 and older.  These FHA insured loans allow homeowners to live mortgage and loan payment free until they pass away, permanently leave the home (meaning 12 consecutive months), or they default on financial responsibilities associated with the home, such as property taxes or homeowner’s insurance.  The funds are available via monthly installments, a line of credit, a lump sum, or even to purchase a 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.

Today Show : Part 3 – Helping Parents Make Legal, Medical, and Financial Decisions

Recently, financial expert, Jean Chatzky, did a three part series on the Today Show called “Taking Care of Mom & Dad”.  Each of these segments specifically touched on real questions adult children have regarding what to expect as their parents age.

The video featured here is Part 3 – Helping Parents Make Legal, Medical, and Financial Decisions. 

Take a few minutes to watch this well done, informative short video.  Find Part 2 here, and Part 1 here.

 

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.

Today Show : Part 2 – Is A Reverse Mortgage Right For Your Aging Parents?

Recently, financial expert, Jean Chatzky, did a three part series on the Today Show called “Taking Care of Mom & Dad”.  Each of these segments specifically touched on real questions adult children have regarding what to expect as their parents age.

The video featured here is Part 2 – How to Handle the Cost of Aging Parents: Is a Reverse Mortgage Right For You?

Take a few minutes to watch this well done, informative short video.  Find Part 1 here, and Part 3 here

 

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.

Should You Refinance Your Reverse Mortgage Loan?

reverse mortgage loveland fort collins greeley longmont westminster coloradoReverse mortgages are for seniors 62 and older, including married couples, and were once considered a life line. Times have changed, and now reverse mortgages are regularly being incorporated into retirement planning.  But refinance a reverse mortgage?  It’s not something you hear about often, or maybe you don’t even realize it’s an option.  And why would someone want to do this?  Well, here are some fast facts:

Who might want to refinance: 

• In the case of a remarriage, possibly you want to add the new spouse (note: new borrowers added must be 62 or older).  
• Or in the case of divorce, you want to remove a spouse.  
• If the housing market has improved drastically, like we’re currently seeing all over northern Colorado, maybe you want to tap into the new equity.  
• Better interest rates?  Just like with a traditional mortgage, this matters.
• Interested in the Line of Credit option but took out the monthly installments?  Then refinance may be for you. 

What you need to know: 

• The process is similar to that of a traditional mortgage refinance, except you will still be able to live mortgage and loan payment free.
• You will need a new appraisal.
• Some older lenders have exited the reverse mortgage industry, such as Wells Fargo and Bank of America.  If you currently have your loan with one of these lenders, you’re not out of luck, you can still refinance through an existing lender.  
• You can shop around.  You are not stuck with your current lender.
• If your previous reverse mortgage was not FHA insured, you can switch to one that is.  The FHA insurance offers consumer protections, including the promise that you’ll never owe more than your home is worth at the time the loan comes due.
• You will need to take part in third party reverse mortgage counseling.
• If you received your reverse mortgage before 2015, be aware some of the requirements have changed.  Now income and credit does play a factor, although there are options if you fail to meet the new criteria. 
• If you’re not sure you want to stay in the home, refinancing may not be the best move.  Instead possibly consider selling the home to pay back the existing reverse mortgage, then look at a Reverse Mortgage for Purchase to downsize or move to a more suitable home.
• After the refinance, the borrower will still be responsible for property taxes, homeowner’s insurance, and other related costs to the home such as HOA fees, upkeep, and utilities.  

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

How to Help Your Parents with a Reverse Mortgage

reverse mortgage loveland fort collins greeley longmont westminster coloradoPerhaps your parents raised you in the home they are now still living in. As you see them begin to slow, or have to jump on a plane every time they wish to see you, thoughts of helping them to have an easier time come across your mind. After all they deserve at this time of their life to relax, do what they wish to do, and be able to manage their health and their finances with comfort.

Considering a reverse mortgage is one good option. It gives more wiggle room to work with when balancing the growing needs of health, home, and retirement.

As you discuss the future and it’s possibilities, there are a few questions to ask yourself and everyone else involved.

First, do you or other siblings have concerns about inheritance and/or equity?  Your parents probably care that all of you feel you have received from them as they pass. While this discussion is not always easy, it is undeniably beneficial. Talking will give clarity, which in turn provides direction. It also gives everyone a chance to be heard.

Second, do you have financial resources to help your parents?  Health needs as we age are difficult to determine, but it is important to build in a buffer for the unexpected.  The stress of aging is enough in and of itself, being able to take care of the costs should not have to be an additional worry for those that raised you.

Another good question that only your parents can answer is, ‘What are my parents’ wishes about staying in their home, especially if their medical needs grow?’ For some, they are ready to let go of the home of their youth and family, wanting to change and simplify their lifestyle. For some, being closer to you is the most important desire. And for some staying in their home as long as possible is the most important wish that could be fulfilled. Since the decision about reverse mortgage as a way to fulfill desires is a big one, looking toward the future and developing a plan will only benefit everyone – and ultimately make your parents happy.

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. Adult children can help their parents plan ahead by working with a reputable reverse mortgage specialist.

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.