Tag: social security

Reverse Mortgage in Colorado – Points to Know

Reverse Mortgage Colorado Fort Collins Loveland Greeley

 

The Reverse Mortgage, created to aid the realization of retirees dreams, will be in your face if you have approached, or are approaching, the eligible age of 62. As with the all special offers across Colorado, marketing can promote it in such a way as to allure you – or to terrify you.

 

There are a number of points to know when you begin to learn about reverse mortgage. These are simple facts and not marketing strategies.

 

First of all, married couples can both be on the reverse mortgage loan if they are both over the age of 62. This means when one dies, the other can continue living in the home under the same agreement. No changes happen just because both are not alive, giving the one remaining a true security as they navigate through the transition of losing their life partner.

 

Second, at this time the loan is not dependant on credit score or income.  There are simple eligibility requirements: the borrower must be 62 or older, the residence must be their primary residence, and the home must meet HUD guidelines.

 

Third, there are NO monthly mortgage payments. So long as the borrower(s) remain in the home as their primary residence, their only financial responsibilities are the homeowner’s insurance, HOA payments, property taxes and basic upkeep/utilities.

 

Fourth, funds from a reverse mortgage will not affect Social Security, Medicare or pensions because they are considered “tax free” income.

 

And the title of your home stays in your name, there is not a transfer of ownership just because you drew upon the equity of your personal asset.

 

Last, you could even use a reverse mortgage to buy a new home via the Reverse Mortgage for Purchase program.  This a great option for those who wish to be close to family, in a desired location or have a place that fits your new lifestyle.

These are dependable facts to help you sift through all the marketing and information that will come your way.

 

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.

Will A Reverse Mortgage Affect Social Security, Medicare & Pension?

reverse mortgage colorado fort collins loveland windsor

 

A very common concern among seniors and adult children when considering a reverse mortgage is how it will affect social security, medicare, and even certain pensions.  For many seniors, these benefits are a large part of their income. Fortunately, because the funds from a reverse mortgage are NOT considered taxable income, a borrower’s benefits will not be affected when taking out a reverse mortgage.

 

On the other hand, borrowers who have Medicaid, TANF, Food Stamps or SSI may see those benefits affected by this additional income.   Because these programs are government sponsored programs with strict approval guidelines based on all sources of income, even non-taxable income, there is a possibility the additional cash flow will need reported.  Other supplemental and assistance programs would need to be addressed on a case by case basis.  Working with a reputable reverse mortgage lender and required third party counseling will ensure all your questions are answered thoroughly and honestly.

 

Reverse mortgages are available to homeowners 62 and older, regardless of income or credit.  The proceeds can be received as a lump sum, as monthly installments, or a reverse line of credit and can be used for any purpose the borrower sees fit.  This FHA insured loan allows the borrower(s) to live mortgage payment free.

 
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.  

 

Can A Reverse Mortgage in Greeley, CO Provide Guaranteed Cash Flow For Life?

Reverse Mortgage Helping Seniors in Fort Collins Colorado Loveland GreeleyDid you know the average retiree in Greeley, Colorado lives off $1,230 per month from Social Security and a small nest egg?  Often times that nest egg only lasts for a portion of the retirement years while their retirement may actually last for two to three decades.  This is why 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 with no income and credit requirements. This FHA insured loan offers funds through a lump sum or monthly installments without a monthly mortgage or loan payment. 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 Cheyenne and Laramie, Wyoming.   Click here to contact Jan and learn if reverse mortgage is right for you.

Reverse Mortgage and the ‘Standby’ Strategy

reverse mortgage loveland fort collins longmont greeley colorado

 

In a recent Bloomberg article, the author laid out the case for using reverse mortgage as a responsible option for long-term financial planning.  Assistant professor of financial planning at Texas Tech University, John Salter, and two of his colleagues put the scenario to the test.

 

Here is what they found:

 

Salter and two colleagues set out to determine if there was a place for reverse mortgages in responsible long-term financial plans. They started by looking at the prospect for a 62-year-old relying on a $500,000 investment portfolio to fund retirement. To reach a 90 percent probability that the money will last 30 years, the retiree could take out just under 3.25 percent of the portfolio’s value annually. (The portfolio is 60 percent stocks, 40 percent bonds.)

The outlook brightened after the planners used what they dub a ‘standby reverse mortgage’ strategy, based on a home valued at $250,000. In a falling market, the reverse was tapped, rather than the portfolio. The retiree repays the money when the market recovers. That supports a 5 percent withdrawal rate, with a 90 percent probability of the money lasting 30 years, Salter says.

Reverses can also be used to create monthly income. Gerald Wagner, CEO of Ibis Software, which does reverse mortgage analysis, crunched some scenarios to test that out. He started with a base assumption of $450,000 in home equity and an $800,000 investment portfolio with a 60/40 allocation. In general, adding the reverse to the mix supported a sustainable withdrawal rate between 5 percent and 6 percent.

Also in reverse mortgages’ favor is tax treatment. The money pulled out is tax-free income and doesn’t count when computing taxes on Social Security income. And a reverse line of credit can help delay taking Social Security until age 70, when retirees get the largest payout.

 

 

In order to qualify for a reverse mortgage, the individual must own their home, be at least 62 years old, and have some equity in the home. There are no income, credit, or medical requirements. In general, the older the borrower (or the youngest borrower in the case of couples) and the more valuable the home, the more money available. Other factors also come into play, such as: the appraised home value, interest rates, and the amount of equity in the home.

 

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.

Reverse Mortgage in Retirement : Now or Last Resort?

Reverse Mortgage Colorado Financial Planning

 

Research suggests that many baby boomer and beyond retirees will not be in a financial position to avoid using home equity as part of their retirement strategy, meaning they will be increasingly turning to reverse mortgage. Senior homeowners are more commonly seeking advice from their retirement planners on whether to consider a reverse mortgage now proactively, or later as a last resort. So, what is the right answer?

 

A recent study compared the efficacy of two simple strategies: (1) establish a reverse mortgage line of credit at age 62, under current lending and interest rate environments – but do not use the line of credit until the retirement investment portfolio is exhausted.  Or option (2) wait until the investment portfolio is exhausted, if ever, and establish a reverse mortgage line of credit then, and subsequently begin to use the proceeds to support income needs until that line of credit is exhausted.

 

Conclusion: The results showed an estimated 30-year survival advantage for early establishment. This holds true under various future interest rate and home appreciation scenarios for real withdrawal rates between 4 percent and 6 percent. However, postponing the establishment of an HECM line of credit should be considered when the adviser and/or client has good reason to believe that home occupancy after loan origination is likely to be short.  In a recent blog article, I discussed how a reverse mortgage line of credit increases each month, and the feature is more valuable the longer the borrower wants to stay in their home.  Read it here.

 

Get the full report on this study from Journal of Financial Planning here.

 

Seniors 62 and over are eligible for a reverse mortgage regardless of income or credit.  Use of home equity as part of a retirement planning strategy is becoming more and more realistic as baby boomers face an uncertain economy.  Contact me for more information.

 

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.

Taxes and your Reverse Mortgage

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Spring has sprung in Northern Colorado again!  That’s the good news.  The bad news is this also means it’s tax time.  It’s common during this time of year for me to receive a few questions regarding taxes and reverse mortgage – from both those considering a reverse mortgage, and those who already have a reverse mortgage.

 

Here are the two most common:

 

Are the funds from my reverse mortgage considered taxable income? 

 

No.  Because the funds received from a reverse mortgage are technically an advance on a loan, any payments or lump sums received are not taxable income, meaning they do not need to be reported on a tax return as such.  They also typically do not affect Social Security or Medicare payments.

 

Is the interest from my loan deductible? 

 

No.  Because reverse mortgage holders do not make monthly mortgage payments and typically the interest is not paid until the loan is paid in full, the interest from a reverse mortgage loan is not deductible on a tax return.  This is also the case with a reverse mortgage for purchase loan.

 

FHA insured reverse mortgages are available to homeowners 62 and older with no credit or income requirements.  These loans allow the borrower to live mortgage payment free and receive their loan payment in one lump sum or in monthly installments.  All borrowers are required to participate in third party counseling to ensure all their questions are adequately answered before making a decision.  Reverse mortgages are also available 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.  Click here to contact Jan and learn if reverse mortgage is right for you.

A Retirement Crisis by the Numbers

colorado reverse mortgage fort collins denver loveland greeley windsorNumbers 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% by the year 2020.

Continue reading “A Retirement Crisis by the Numbers”

How Reverse Mortgage Works in Fort Collins, CO

reverse mortgage colorado loveland fort collinsThe beautiful areas of Fort Collins and Loveland, Colorado are home to many retirees and seniors.  Year after year, this area makes news as one of the best places in the nation to retire.  Elderly adults stay active, family loves to come visit, and with over 300 days of sunshine per year, it’s hard to ever want to leave!

 

Now, imagine living in your home mortgage free, or enjoying monthly proceeds for life, both scenarios benefiting from the years you’ve invested in your home. A reverse mortgage is a unique tool designed for seniors 62 and older regardless of income or credit. You enjoy access to part of the equity in your home and the freedom and comfort of the home you’ve known for so many years. It’s your home, now you can put it to work for you.

Continue reading “How Reverse Mortgage Works in Fort Collins, CO”

Jan Jordan 1310 KFKA Radio Saturday, June 29th

Jan Jordan Reverse Mortgage Loveland Fort Collins Greeley Colorado
Jan Jordan, Reverse Mortgage Specialist, will be on Northern Colorado’s 1310 KFKA radio Saturday, June 29th from 8am – 10am.  Jan will be discussing reverse mortgage on Jim Saulnier and Chris Stein’s weekly IRA and Retirement show.  You can listen live by tuning your radio to 1310AM or find the live stream online here.  If you miss Satuday’s show, it can be accessed later via podcast here (note: podcast won’t be available for approx 10 days).   1310 KFKA is a popular AM station in the Greeley, Loveland, Windsor, and Fort Collins areas.

 

Reverse mortgage is available to senior homeowners 62 and over, regardless of income or credit.  Many borrowers use their proceeds to supplement their monthly income, fund extraordinary medical expenses, or to live a more fulfilled life with family before passing away.

 

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.

Frequently Asked Questions – Part 3

reverse mortgage colorado fort collins loveland greeleyThis is the third in a three part series of frequently asked questions about Reverse Mortgage.  You can find Part 1 here and Part 2 here.  If you have questions that are not currently listed, please don’t hesitate to contact me directly.

 

Will I Lose My Government Assistance If I Get a Reverse Mortgage?

 

A reverse mortgage does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid or other public assistance, any reverse mortgage proceeds that you receive must be used immediately or they may affect your eligibility. Reverse mortgage funds that you retain would be considered an asset, just as other bank funds.

 

Continue reading “Frequently Asked Questions – Part 3”