Author: janjordan

How Reverse Mortgage Helped a 100 year old Man Age at Home

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reverse mortgage colorado fort collins loveland greeley

Awhile back I closed a reverse mortgage loan for a 100 year old gentleman.  This was my first time closing a loan for someone of his age.  He lives at home with 24 hour care at a cost of $10,000 a month.  When I was sitting at the closing table with the client and his lawyer, the lawyer mentioned that that he could move to an assisted living facility at half the cost ($5,000/month).

 

This gentleman’s quick sharp answer back to everyone? “NO…. I’m staying in my home.”

 

Deciding whether aging at home, moving in with family, or moving to an assisted living facility is right for you or your loved ones can be very complicated and emotional.  Since reverse mortgages can open up opportunity to turn home equity into liquid cash, without having to move or make a mortgage loan payment, seniors and their families are often using this opportunity to pay for care that would otherwise not be covered by basic Medicare, Medicaid or health insurance.

 

Studies have shown that the benefits of aging in place can be enormous for the right candidate.  Not only can a move be both emotionally and physically challenging on a senior, especially one with medical concerns, it’s known that the quality of life tends to increase when seniors maintain their independence and their community ties.

 

With reverse mortgages being available to homeowners 62 and over, I was honored to have been given the opportunity to help this 100 year old gentleman stay in his home – where he felt the happiest and most comfortable.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Do You Need A Colorado Elder Law Attorney?

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colorado reverse mortgage fort collins denver loveland greeley windsorElder law is a relatively unknown segment of law and is often overlooked when seeking legal solutions.  But for some seniors and their families an elder law attorney may be exactly what they need.  Elder law is very broad and includes things like estate planning, probate, guardianship, real estate, nursing home neglect and a dozen other areas of law that are nearly exclusive to the elderly. Typically one lawyer will not have expertise in every area, but will instead work with a network of attorneys who can supplement in specific areas when needed and vice versa.  Also, keep in mind just because an individual is elderly does not mean they need an elder law attorney.  Elder law is focused on legal problems specific to the elderly.  Concerns with other areas of law may best be handled by attorneys dedicated to those areas.

An elder law attorney should be educated and informed on reverse mortgage.  It is common for them to receive questions from clients, former clients, and their families about reverse mortgage when establishing estate plans or when they are considering a reverse mortgage for the first time.  Although reverse mortgages can be an excellent and safe tool for many homeowners, they are not for everyone and are most effective when used as part of a financial and estate plan.  It is highly encouraged to make sure any question receives an adequate answer when considering reverse mortgage – and often elder law attorneys are part of that equation.  This can also help with avoiding reverse mortgage scams.

Here are a few questions to ask when seeking out a an elder law attorney:

  • How long has the attorney been practicing?
  • What percentage of the attorney’s practice is devoted to elder law?
  • Does his or her practice emphasize a particular area of elder law? (for instance, guardianship or other specific work)
  • How much elder law training has the attorney had, and from what organizations?
  • Is the attorney a member of the National Academy of Elder Law Attorneys?
  • Will the attorney be able to work within your time limitations?

In addition to a legal network, an elder law attorney should be familiar with the “elder network”, a network of public and private community resources to assist seniors in various capacities.  This should include a reputable reverse mortgage lender.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Can I Get a Reverse Mortgage if I have a HELOC on the Home?

Posted on by janjordan
Colorado Reverse Mortgage
Colorado Reverse Mortgage

The 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 Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

What Happens to a Reverse Mortgage After the Owners Pass?

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

Why Do Only 3% of Seniors Use a Reverse Mortgage to Purchase a Home?

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Reverse Mortgage Loveland Fort Collins ColoradoWhy is it that only 2-3% of older Americans use the Reverse Mortgage for Purchase option to buy a home?  Recent studies show that even with the option available to them, they still seek traditional funding or opt to pay cash.  Why is that?  Well, surveys have shown there are three main reasons:

 

1.) No one told them they could use a reverse mortgage as a purchasing tool.  Unfortunately this happens far too often.  Real estate agents and lenders are either not aware of this option or are not educated enough to suggest it.  If you’re a senior considering purchasing a home, be sure to ask about using a reverse mortgage.  If you aren’t given proper information, contact a reverse mortgage expert such as myself.

 

2.) Real estate agents do not have enough knowledge to adequately educate the potential buyer about this option.  If you as a potential buyer find yourself in this situation, ask who you could talk to to learn more or seek out an expert yourself.

 

3.) The third reason seniors opt for traditional financing is the down payment required to use a reverse mortgage.  The down payment amount varies based on the price of the home, the age of the borrower, and current interest rates.

 

In order to apply 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, you must have your “required investment” (down payment) from a HUD allowable source.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Are You Prepared to Take Care of Your Parents?

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Reverse Mortgage Colorado Fort Collins LovelandThe cost of eldercare is staggering.  And so is the toll it takes on an adult child.  Are you prepared for either?  Or both?

 

A recent MetLife study estimated that the total cost incurred by the caregiver alone (not including the costs directly related to care) is an average of $324,044.  The financially impact can be similar to having children, but without the planning.  So, how can one prepare for this?  Here are a few suggestions:
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1.) Talk with other siblings and relatives.  Have any of them considered this?  Do they have plans or ideas they haven’t shared?  Utilizing networks early on can help alleviate worry down the road.

 

2.) Talk with mom and dad.  Not always the easiest or most comfortable conversation to have, but a very important one nonetheless.  Find out what they want these upcoming years to look like, and what kind of long term care insurance, pensions, and home equity they may have.  Do they have a retirement planner that as factored any of this?

 

3.) Look into long term care options and weigh out the costs along with the pros and cons.  Although your parents are your parents, and you love them dearly, you may not be the best option as a caregiver among the many options available today.

 

4.) Consider a reverse mortgage.  The once frowned upon reverse mortgage program is now being utilized to brighten long term retirement scenarios.  This FHA insured loan not only eliminates mortgage payments but allows the borrower to access the equity in their home via monthly installments, a line of credit, or sometimes even a lump sum.  This is a great option for those wishing to age at home, as the loan does not come due until the last borrower passes away or leaves the home permanently.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

 

What Adult Children Need to Know about Reverse Mortgage

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reverse mortgage colorado fort collins loveland greeleyAs your parents age, their needs will inevitably change. And as they change, your need to consider options with them will increase. While these conversations may be the first of their kind, it will also be a chance to offer support. Reverse mortgage could be a viable option to meet everyone’s wishes, especially your parents.

 

Concerns will arise. Here is a brief answer to some of them.  For more in depth answers, feel free to contact me.

 

• If my parents and I decide to repay the reverse mortgage loan, what happens to the equity in the home?

 

There are two options at this point. The first is a decision by your parents to sell the home and use the money received to pay off the reverse mortgage. The second is to keep the home and choose another way to pay the balance due on the loan. In both options, the borrowers will keep the equity that remains in the home.

 

• Will the home inheritance Mom and Dad have prepared for me and/or my siblings be used up?

 

They will be tapping into equity but their home may also be appreciating. If this is the case the appreciation will keep some equity in the home for you to receive upon their passing. This conversation with them will be the most meaningful. Oftentimes parents assume their children want an inheritance and create stress in their lives just so they leave as much as they can. Unspoken assumptions on both sides can leave everyone in the dark.  The needs of your parents, and the ability to support themselves without draining anyone else’s finances may outweigh what is received when they are gone.

 

They may need to know how you really feel about inheritance and your thinking about what it means to you is just as important.

 

• If my parents take a reverse mortgage out on their home, will it affect their retirement benefits?

 

This type of loan does not affect the benefits of Medicare or Social Security or other pensions, and additionally, the income is non-taxable. If your parents have other forms of assistance such as federal, state or Medicaid programs, a reputable reverse mortgage lender can help navigate this.

 

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 creatively to suit your needs and desires.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

 

Credit Lines Magnify Every Month with a Reverse Mortgage

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Reverse Mortgage Colorado Financial PlanningWith the varieties of opinions about reverse mortgages out in the marketplace a question comes up, that is, ‘would a reverse mortgage be a fall back, last resort, or would it be a positive option for a financial plan?’ While the answer lies in the hands of the borrower, or owner, there are worthy considerations to take into account.

 

Some, including financial planners, might label those choosing a reverse mortgage as poor planners, those that did not take the time or effort to look long at their future needs and desires and work that into a plan. This mentality is changing fast though, as retirement experts are determining reverse mortgages can not only supplement the needs of some senior, they can offer them the retirement they always dreamed of.

 

There are many reasons to consider a reverse mortgage in a forward moving plan, making the choice before it might be the only option available (though this is not bad either.) First of all, many coming into retirement are ready to downsize or move. Maybe they raised their children in a two story house in Illinois, and now do not need five bedrooms, or to weather the cold when their children and families are in clement areas such as Georgia or South Carolina. A reverse mortgage makes this possible.

 

The amount a reverse mortgage can be reaches a defined limit, taking into account the equity of the present home and the age of the borrower(s.) This limit can be used in multiple ways, it can go towards that downsized home, be a line of credit, can cover monthly payments for the rest of their lives, or can even be a lump sum the borrower receives immediately.

 

There are also other typical reverse mortgage scenarios.

 

For instance, as well as one might plan, life offers us unexpected events. A reverse mortgage is a respectable option when a family is in distress, many foreclosures have been avoided with the solid help of a reverse mortgage. And sometimes, when a family is not even in distress, they wish to take advantage of all their hard work, which is there in the form of the home they own, and have liquid resources instead of just equity that cannot be utilized. The ways a reverse mortgage can be brought into the questions of a plan are as unique as the personal life situations existing.

 

For seniors 62 and older, a reverse mortgage can objectively be considered as an alternative revenue option. This takes away the stigma sometimes attached to it as a choice that was the only option left, a fall back when it is really a move forward.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

What is a Reverse Mortgage Maturity Event?

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Reverse Mortgage Colorado Fort Collins Loveland GreeleyWhen a conventional mortgage is taken there is always a maturity date. This date designates, if the borrower never defaults, the last payment (including all interest and principal) bringing closure to the loan.

 

With a reverse mortgage there is a maturity event, that is, a designated event in the borrower’s life which makes the loan then due. Reverse mortgage loans do not require monthly payments which can be quite an advantage for a senior entering into a new phase of life – whether their looking to supplement their income, protect retirement assets and investments, or buy a new home. FHA insured reverse mortgages are offered to those 62 and older based on certain guidelines, such as the home the loan is on must be a primary residence and it must meet HUD’s required guidelines.

 

Maturity event will be a term the borrower will encounter  several times during the application process and required third party counseling.  It’s very important piece for both the borrower and loved ones to understand.

 

Here are some examples of maturity events:

 

• The borrower, (or last borrower if married) passes away.
• The property for which the reverse mortgage is taken is no longer in the borrower’s primary residence.
• The property is sold out of the borrower’s name
• The borrower moves out of the primary residence for more than twelve consecutive months, such as moving in with family or assisted living for care.
• The borrower defaults on property taxes, homeowners insurance, or other obligations to the home.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Can a Reverse Mortgage Benefit a Widow?

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colorado reverse mortgage fort collins denver loveland greeley windsorWhen a spouse passes, it’s a very difficult time for the widow and the family.  In addition to the emotional toll, it’s not uncommon to face a sudden and often unexpected financial toll.  After a spouse passes, it is more common than not that there will be a reduction or elimination of the deceased spouses pension or social security benefits. This can create a serious strain on the widow to continue to make mortgage payments, property taxes, homeowners insurance, home repairs, in addition to other daily expenses.

 

If you are a widow financially struggling without your spouse, a reverse mortgage can be of benefit.  Senior homeowners age 62 and over may qualify for a reverse mortgage.  A reverse mortgage does not have to be repaid as long as the homeowner continues to live in the home.  This can make it possible for a widow to remain in the home without the financial strains that may be present otherwise.

 

If you are a married couple considering a reverse mortgage, you can find some helpful tips here.  You can also learn more about what happens to your home after both spouses pass away here.

 

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.