janjordan, Author at Colorado Reverse Mortgage Specialist - Jan Jordan

Author: janjordan

Why Reverse Mortgages Are Under Utilized

Posted on December 13, 2021 by janjordan

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.

Increased Reverse Mortgage Lending Limits For 2022

Posted on December 7, 2021December 8, 2021 by janjordan

reverse mortgage loveland fort collins greeley longmont westminster colorado The Federal Housing Administration (FHA) has announced that the lending limit for FHA insured HECM Reverse Mortgages will be increasing for the sixth year in a row.

Beginning on January 1, 2022, the lending limit for FHA government-insured reverse mortgages will be $970,800, marking an increase of nearly $150,000 from the lending limit HUD set for 2021.

History of HECM Reverse Mortgage Lending Limits

2022 | $970,800
2021 | $822,375
2020 | $765,600
2019 | $726,525
2018 | $679,650
2017 | $636,150
2009-2016 | $625,500

What These New Limits Mean for Borrowers

If you’re a prospective reverse mortgage borrower who has a home valued at or around the new 2022 lending limit, the new MCA will allow you to borrow demonstrably more money in a reverse mortgage transaction.

Remember, the amount of money you can borrow is directly influenced by current interest rates, your home value, and your age at the time that the loan is originated; younger borrowers qualify for generally lower proceeds when compared with older borrowers.

That means that these new limits can certainly make a major difference in the ability for borrowers to earn more money in loan proceeds.

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. The funds can be received via line of credit, monthly payments, lump sum, or as a reverse mortgage for purchase for those looking to purchase a new residence. The funds can be used however the borrower deems fit – additional income, medical expenses, vacations, home repairs or modifications, gifts, etc.

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.

4 Tips To Finding The Best Reverse Mortgage Lender in Colorado

Posted on November 23, 2021December 8, 2021 by janjordan

For many seniors, a reverse mortgage is a feasible option to living within a budget, without the constraints and worry of excessive financial distress. 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. Funds from a reverse mortgage can be accessed in various ways including a line of credit, monthly installments, a lump sum, and they can even be used to purchase a new home. In general, the older the borrower (or the youngest borrower in the case of married 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. Once a basic understanding of how a reverse mortgage works, the next step is finding a lender.

Where to find a lender?

Reverse mortgages are marketed in every possible way. Television, radio, mailers, internet, etc. Although not all of these methods ensure trouble, some of them can be scams. When seeking a reverse mortgage lender, it’s important to speak with people you trust. Ask around at your bank or financial institution. Speak with a financial or retirement adviser. Talk with neighbors or friends who have utilized a reverse mortgage. Seek information from the local Chamber of Commerce or Better Business Bureau. Utilize other resources that may be available in your community.

What to look for in a reverse mortgage lender?

Working with a reputable reverse mortgage lender is critical. The reverse mortgage industry is riddled with scams and flashy sales. It can be risky to get involved with a lender who does not offer all the details or who is just looking to make a “quick sell”. A reputable lender will have strong connections in the community, working closely with a network of professional organizations.

Accreditations and ratings?

Seek out a lender that is a member of the National Reverse Mortgage Lenders Association (NRMLA). Members of the NRMLA must conform to a strict code of lending ethic. Look for a lender that is affiliated with the Better Business Bureau (BBB), where you can also learn of any complaints against the company.

Follow your gut.

When it comes down to it, always follow your gut. Just because a lender may meet all this criteria doesn’t mean they will be right for you. If you do not feel comfortable or feel your questions are not being adequately answered, there is nothing wrong with seeking out a different lender.

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.

Changes to Social Security in 2022 for Coloradans

Posted on November 9, 2021November 17, 2021 by janjordan

As society and the economy continues to shift in the wake of the pandemic, seniors in Colorado and beyond continue to be one of the most impacted demographics between health and finances. Good news is the Social Security Administration is keeping up. Next year, those receiving Social Security will see the largest cost of living increase in 40 years. There are various changes to social security that will be affecting seniors in 2022.

Most notably these are:

• The Social Security cost-of-living adjustment (COLA) will be 5.9%. This is the largest Social Security COLA in nearly 40 years. Your current and future Social Security benefits may be increased each year, partially depending on inflation numbers.

• For Americans who are still a few years away from entering retirement, those born in 1960 or later, the full retirement age for Social Security has increased to 67. Seniors will still be able to start taking Social Security retirement benefits at age 62, but with reduced monthly payments.

• For workers near the top of the Social Security income scale, $147,000 or more for 2022, your maximum Social Security payout will likely increase slightly in 2022. No individual at full retirement age can take home more than $3,345 per month, regardless of their pre-retirement income. This number can be increased by delaying Social Security until the age of 70.

• The amount that is hit with taxes will depend on household income levels. Just 50% of your benefits will be taxed if your income is between $25,000 and $34,000 as an individual. That goes up to $32,000 to $44,000 for a married couple. As you get more Social Security income, more of your benefits will be taxed.

Reverse mortgages can help to use social security strategically. For example, there are perks to delaying taking benefits. Social Security stands 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. 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.

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

Posted on October 28, 2021November 9, 2021 by janjordan

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.

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.

Reverse Mortgages As A Financial Strategy In Retirement

Posted on October 21, 2021November 9, 2021 by janjordan

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?

Think 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 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.

Married? Yes, You Can Still Get A Reverse Mortgage

Posted on October 14, 2021November 9, 2021 by janjordan

It’s not uncommon to hear heartbreaking stories of reverse mortgages that left a spouse in dire straits after the other spouse passed away.

How could this happen? Is it something that you need to worry about? If you and your spouse are considering obtaining a reverse mortgage, it’s important to understand the long term effect it could have on either spouse once the other passes away, and feel confident any appropriate protections are in place.

What Married Couples Need to Know

When applying for a reverse mortgage the amount of money you can receive is calculated according to the age of the youngest borrower. The older the borrower, the more money is available from the lender.

If both homeowners are over the age of 62, both homeowners can be on a reverse mortgage loan. If both spouses are on the loan, the loan continues if either passes away and will continue until both borrowers have passed.

Another scenario to consider is if a borrower obtains a reverse mortgage and then remarries. If this was to happen, it wouldn’t be unheard of for the married couple to live in the home for 20 or more years before the borrower passes. At this time the new spouse would not be protected under the existing reverse mortgage loan. If you have reverse mortgage and you remarry, you could consider looking into refinancing the reverse mortgage and adding the new spouse to the loan.

And yet one more thing to note is the possibility one spouse needs to move out of the home into an assisted living facility due to health concerns. If this happens, as long as the spouse that remains in the home is on the loan, they can continue under their current reverse mortgage.

Bottom line: If you are married and are considering obtaining a reverse mortgage, it is extremely important to work with a trusted and experienced reverse mortgage specialist who can easily answer all of your questions and address any concerns you may have. Making sure both spouses are protected should be a lender’s top priority.

Visiting Aging Parents? Here’s What Adult Children Need To Discuss

Posted on October 7, 2021October 14, 2021 by janjordan

With the holidays ahead of us, it’s not uncommon for adult children to reach out to me to discuss a reverse mortgage as an option to help their aging parents. They often spend a little more time with family and may realize things are changing with their parents and in their home. Here are my tips to helping your parents or older loved ones…

1.) Talk with them

Don’t hide your concerns or exclude them from the conversation, no matter how uncomfortable it is. Ask them to sit with you and discuss your concerns. Discuss their wants and needs. Learn about their financial situation and retirement resources. Having a honest face to face conversation is the first step to determining what is best for them.

2.) Discuss living arrangements

Find out what your parents want to do long term regarding their home. Discuss what they ultimately want, and what would make them change their mind. According to AARP, 90% of retirees want to age at home. Do they have concerns with their home? Do they need updates? Is the home too big? Too many stairs? Do they want to move to a smaller home? If medical care became a need, how will this be managed?

3.) Look into the various options such as insurance and reverse mortgage

When discussing how to finance potential scenarios, educating yourself about the various options such as long term care insurance and reverse mortgages will go a long way. The two can even be used together by using some of the reverse mortgage funds to pay for long term care insurance, especially when there are medical concerns.

4.) Come to an agreement about how much is expected out of adult children

Adult children may want to give the world to their parents, but is that really feasible? And how do the parents feel about that? Determining expectations all around, along with setting hard boundaries, will ease any resentment down the road.

5.) Seek out a professional

There are many resources for seniors – whether it’s community resources or elder attorneys. When you’re unsure of the options or what is best, enlisting a professional can help to ease everyone’s mind.

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.

As Senior Housing Wealth Reaches New High, Is It Time To Consider A Reverse Mortgage?

Posted on September 23, 2021September 28, 2021 by janjordan

Older homeowners continue to break home equity records as home values appreciate across the nation. In the first quarter of 2021 homeowners 62 and older saw their housing wealth grow by 3.4 percent or $305 billion from Q4 2020.

That brought senior housing wealth to a record-breaking $9.23 trillion in the first quarter of the year, according to a quarterly index published by National Reverse Mortgage Lenders Association and RiskSpan.

Reverse mortgages have become a critical component to helping fund retirement alongside other tools such as 401(k)s, IRAs, savings, investments, and Social Security.

Because the amount available for the borrower through a reverse mortgage is based on the current appraised value of the home, today’s senior housing wealth numbers indicate this is a great time to explore the reverse mortgage option. The FHA insured reverse mortgage means even if the housing market were to become volatile in the future, the borrower will never owe more than the appraised value of the home at any given time.

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.

Is Paying Off A Traditional Mortgage With A Reverse Mortgage A Good Idea?

Posted on September 16, 2021September 17, 2021 by janjordan

A recently released university report by the Michigan Retirement Research Center and funded by the Social Security Administration showed that 55% of those utilizing a reverse mortgage are using some of the proceeds to pay off a traditional mortgage.

So, when is this a good strategy?

1.) They’re living in a house they can’t afford

When many older adults reach retirement, they have to figure out out how to live on a fixed income and how to make their other retirement assets last for what is often decades. Tapping into a reverse mortgage will both eliminate the weight of the mortgage payment, and often even allow extra funds to use throughout the remainder of their lives.

2.) They want to purchase a different home

It’s not uncommon for retirees to purchase a home in retirement. But few know they can do this with a reverse mortgage instead of a conventional one. This allows buyers to either preserve assets and income, or purchase a home that would typically be out of their price range. Click here to learn more about the Reverse Mortgage for Purchase program.

3.) They don’t want to interrupt performing assets

For those with retirement investments that are doing well, drawing from these to make mortgage payments could be a bad move. Using a reverse mortgage to eliminate mortgage payments can be a win-win in the long run.

Reverse mortgages use the equity in your home to allow access to cash through monthly payments, a lump sum, or a line of credit while living mortgage payment free. The borrower and the home must meet certain qualifications, such as age (62 or older), and HUD’s home eligibility requirements, and they must also continue to pay and maintain certain responsibilities such as property taxes and homeowners insurance.