Tag: seniors

If I Get A Reverse Mortgage, What Happens When I Die?

Reverse Mortgage Colorado Fort Collins LovelandA 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.

One last note, as long as the communication lines remain open, the bank will typically allow up to one year to help with the transition.  This one year is allotted in three month increments.

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.

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.

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.

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.

Does My Home Qualify For A Reverse Mortgage?

reverse mortgage colorado fort collins lovelandReverse Mortgages are a specialized loan available to seniors 62 and over.  This creative resource is used by a wide demographic – from those looking to supplement a fixed income, to the more affluent in need of protection for retirement assets, and even those wanting to purchase a home in retirement.  But there are some requirements when it comes to the actual home…

Which types of homes are included? 

According the HUD’s Federal Housing Administration, the home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. Some condominiums and manufactured homes that are approved by HUD also meet FHA requirements.

In the case of a Reverse Mortgage for Purchase, borrowers can use a reverse mortgage to purchase a single family home or 2-4 unit home with completed construction that has received a certificate of occupancy.

Are there reasons my home may not qualify?

A home with very little equity may not qualify, although homes with existing mortgages may.

In addition, homes must be maintained with general upkeep and be current on property taxes and other expenses relevant to the home.

A second home or vacation home may not qualify.  The borrower must be living (or plan to live) in the home.

Bottom line

The funds from a reverse mortgage can be accessed via a lump sum, line of credit, monthly installments, or to purchase a home. If you have questions let your specialist guide you in the many scenarios that are possible and the two of you can think creatively about your needs and desires.

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.

Why a Reverse Mortgage is a Good Financial Strategy

Reverse mortgages are available to seniors 62 and over who either have their home paid off or have substantial equity.  Certain criteria applies to the home in order to meet HUD’s rules, and although anyone on the loan must be 62 and over, they are available to married couples the same as individuals.  The funds available from these FHA insured loans are available in various ways including monthly installments, a lump sum, a line of credit, and as a purchase option.  Even with all these funding choices, reverse mortgages are not right for everyone but they are a perfect match for many.

When is Reverse Mortgage a good financial strategy?

reverse mortgage loveland fort collins greeley longmont westminster coloradoThink of reverse mortgage as a financial tool that turns home equity into cash WITHOUT incurring a loan payment, unlike a traditional mortgage or home equity loan.  No repayment is due as long as the borrower is living in the home.  This also goes for married couples, in which case no repayment would be due until the last borrower permanently leaves the home.  The borrower will still be responsible for some things related to the home, such as property taxes and homeowners insurance.

Reverse mortgages are increasing in popularity as more retirement and financial planners are recommending their use as a potential tool.  Typically retirement planners have used a three legged stool as an example for their clients – saving, social security, and pensions make up this visual structure.  But with changes in the economy and uncertain futures, pensions are disappearing.  In this scenario, those who are “house rich, but cash poor” may find using home equity to balance out the stool is a saving grace.  In addition, for those secure in all three areas, adding home equity can be used as a safety net or to delay, thus enhance, certain areas.

The reverse mortgage industry underwent some changes last year as legislation was passed making these loans a safer option for both borrowers and lenders.  As a result, the reputation that once surrounded the industry has drastically improved and their use is being studied by some of the most prominent retirement experts.

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 For Purchase – Everything You Need to Know

reverse mortgage loveland greeley fort collins longmont boulder 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 Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Retire in Comfort – How a Reverse Mortgage Can Help

Colorado Reverse Mortgage

For 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 Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado.  Contact Jan and learn if reverse mortgage is right for you.

IMPORTANT: Watch Out for Scams and Identity Theft

reverse mortgage loveland fort collins greeley longmont westminster coloradoDid you know senior citizens are the #1 demographic to be hit with vicious scams aimed at stealing tens of thousands of dollars (and more)?  As someone who works with these same people every single day, it breaks my heart.  The kindness and trust they possess is something we should honor – NOT take advantage of.  But unfortunately there are those in the world who see these vulnerabilities as something to exploit – and they do.  Whether you are a consumer yourself, an adult child of an elderly parent, or a professional working with the senior population, please inform yourself and take the steps necessary to prevent access to priceless personal information.  You will never regret being extra diligent.

 

Just recently, tens of thousands of dollars was sent to a scammer during a 100% legit real estate transaction because unbeknownst to the buyer, they found themselves the target of a “phishing” email scam, and by the time they realized it was a scam that looked identical to the “real deal”, it was too late and they’d wired money they can never get back.  This happened not once, but TWICE!

 

This is one of the most common types of scams these days and it’s called “phishing”.  This is where highly skilled con artists use various techniques to obtain information about a pending transaction (common in real estate) or other information they can use to obtain financial information.  Sometimes this information is found by hacking into non-secure servers, other times it’s found by following what someone is saying on Facebook or other online forums.  Regardless of how it’s obtained, both the senior consumer and the professional working with the senior consumer need to be advocates for their privacy.

 

Here are my tips to prevent becoming a victim of this type of fraud:

 

1.) NEVER provide personal information via email, always do this over the phone, or over a secure server on a website.  If someone requests it from you in an email, call them.  If you’re a professional working with consumers, never request this information be provided via email.  If you do, you are putting your clients at unnecessary risk.

 

2.) NEVER wire or transfer money according to instructions you receive in an email – even if you have corresponded with this person.  Fake email accounts look nearly identical to authentic ones and it can be very difficult to tell the difference.  This is VERY important; don’t take the risk.  ALWAYS speak with anyone who is asking you to wire money – preferably in person – and always use the phone number you already have for them, not a phone number sent in an email.

 

3.) NEVER follow a link that comes in an email to your bank account or other account that will have access to your private, personal financial information.  This includes banks, credit cards, loans, PayPal, IRS, etc.  This is one of the most common phishing scams.  When you receive a phishing email, it will seem you are being alerted to various scenarios – possibly a fraudulent transaction, an overdrawn account, or another “urgent” situation.  Everything looks legit; they will have your name and often more information.  Most of the time these emails are scams!  As soon as you go to the link provided, and enter your login and password, it’s been stolen.  To prevent this, ALWAYS login directly from your internet browser by typing in the website URL directly as you already know it and use it.  Don’t hesitate to call and ask the bank or other institution about the email (using the number you already have, again, don’t use information given to you in a potentially fraudulent email).  All financial institutions want these reported.  It’s how they are stopped.

 

4.) Whether a consumer or professional working with consumers, ALWAYS use secure hosting and servers with strong security.  Password protect your wireless networks.  Hackers are highly skilled – but you are your own first defense against them.

 

For more information about protecting yourself against identity theft, click here.  You can never be too careful or diligent in protecting your personal details and assets, or those of your clients.

 

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.

Breaking Down the Reverse Mortgage Home Appraisal

reverse mortgage loveland fort collins greeley longmont westminster coloradoGetting assessments on just about anything can seem laborious or tedious, who wants to have something close to them looked at with a magnifying glass? But appraisals for reverse mortgage loans are not only very helpful for everyone involved, they’re required by the lender.  Part of what determines the amount of funding available from a reverse mortgage is the appraised value of the home.  Luckily the process is very simple.

First, after talking with a reputable reverse mortgage specialist, you will submit your application. The specialist or lender will be the one to contact an appraiser who will in turn contact you to set up a time for them to look at your home.

The procedure is standard and involves three steps, the inspection, the research, and the report.

Inspection:

The appraiser will walk through your home with you, he or she might take photographs. It will document features that add value to your home. If the appraiser takes a picture of something in need of repair it lets you know that it matters and gives you a chance to fix it.

Research:

Once the walk through is done, the appraiser’s work continues as they research factors that influence the value they place on your home. Home sales in your area are one area of research. Others include multiple listing services, tax assessor’s records and public records come into play. Anything that will help to give the present value will be taken into account.

The Official Report:

This is the synthesis of the appraiser’s home visit and all the research. The report is used with your loan request. If photographs were taken, they will be included as well.

The appraiser gives this report to the lender who will give you a copy and an updated reverse mortgage figures taking into account the new information.

There are simple things you can do before the appraiser gets to your home to help your loan request. Read my article about preparing your home for an appraisal by clicking here.

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 in the many scenarios that are possible and the two of you can think creatively about your needs and desires.

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.