Author: janjordan

A Crash Course on Reverse Mortgage for Purchase

reverse mortgage loveland fort collins greeley longmont westminster 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.

A Client’s Review of Reverse Mortgage for Purchase

reverse mortgage colorado fort collins loveland windsorThis first hand account of how the decision to go with a Reverse Mortgage for Purchase instead of paying cash for a home changed the course of life for these homeowners is really impressive.  I absolutely LOVE hearing stories like this!

 

Reverse Mortgage for Purchase (aka HECM for Purchase) is available to seniors 62 and over.  Borrowers are required to meet the same age guidelines as with a traditional reverse mortgage, but instead of using the equity from an already existing home they own, they contribute a down payment towards the cost of a new home and the reverse mortgage lender makes up the remainder of the cost – leaving the borrower with NO mortgage payment.  The amount of the down payment is calculated a couple different ways and changes based on the age of the homeowner and the value of the home (click here to learn more about down payments).

We bought our house with a reverse mortgage in 2010. We put down $115K, received as inheritance from my husband’s mother, which could have bought us a 2 BR 1 bath 900 sf on a tiny lot with no mortgage. Instead we have 5 acres, 1850 sf 3 BR 2 bath home, a barn for my 2 horses (which boarding would have been costing us $600 a month at least), 12 x 24 greenhouse, two storage buildings, a workshop, and a pool in an equestrian neighborhood that is peaceful and quiet with no barking dogs, roaring cars, or loud trashy neighbors.  The Reverse Mortgage for Purchase gave us the ability to purchase a much nicer home and still live mortgage payment free.

We pay property taxes, insurance, and upkeep. We do not “co-own” the house with the mortgage company as many believe is the case with a reverse mortgage. It is in our names and we can sell it if we decide to do so. The reverse mortgage is treated just like any other mortgage at the time of sale. It’s paid off at closing and the equity goes straight into our pockets. And we do have equity…in fact, since real estate has rebounded, particularly in our equestrian community, we have more equity than when we bought the house even after having the RM for four years.

We have nobody to leave the property to.  My husband’s children disappeared out of our lives years ago and I have no kids. We’ve left everything in the hands of our lawyer to be sold and the funds split between two animal charities. If we had offspring we wanted to leave anything to, they would have time to decide what to do with the house – either refinance it and pay off the mortgage, sell it and take any equity, or another option.

~ Happy with Horses

 

Here are few basics to the reverse mortgage for purchase program:

  • The purchaser must be age 62 or older (each borrower on title must meet this criteria, although others residing in home do not)
  • The home being purchased must be the new primary residence
  • The purchaser must have the “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 asset or money you have had for at least 90 days.
  • Eligible properties include: single family homes, town homes, and FHA approved condos.  A loan can not be applied for on a new construction home until it has a it’s “Certificate of Occupancy”.

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

Delay Social Security Benefits with a Reverse Mortgage

Reverse Mortgage for Purchase Loveland Fort Collins Greeley Longmont Westminster Colorado Cheyenne Laramie WyomingWhen planning for retirement, there will no doubt be a discussion about when a retiree should start taking their Social Security benefits.

 

There are perks to delaying, for example Social Security benefits stand 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.  A well educated financial advisor would easily be able to help you decide if this is a good option.  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.

 

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

 

Why Society Is Reversing Their Thinking On Reverse Mortgages

Since the reverse mortgage industry saw big changes in 2015, financial advisers, retirement planners, and reverse mortgage specialists are collaborating more than ever before.  In an effort to ensure these changes are are thoroughly understood and appropriate solutions are offered to clients, a strong relationship between professionals is vitally important.

 

Because of these newly developed relationships, it appears a wonderful shift is taking place.  Reverse mortgage, once stereotyped as a product for poverty stricken widows or the like, is now being realized as a product of opportunity.  More and more we’re seeing affluent and middle class retirees utilizing this option to provide financial stability and financial freedom throughout retirement.  The industry has only begun to scratch the surface of those who would benefit or will discover the possibilities when tying a reverse mortgage into their retirement plans.

 

This paradigm shift will likely increase knowledge across the board regarding both traditional reverse mortgage loans and the reverse mortgage for purchase program.  Both products are available for seniors 62 and over.

 

If you have any questions regarding the changes that have taken place surrounding the reverse mortgage industry in Colorado, please don’t hesitate to contact me.

 

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

Reverse Mortgage and Your Taxes

reverse mortgage loveland colorado fort collins longmont greeley boulderThere are many differences between a reverse mortgage and a traditional mortgage – and taxes are a big one.  Here’s a run down of what to expect come tax time if you have a reverse mortgage.

 

The Tax Liability Issue

 

Because any funds you receive from a reverse mortgage are essentially an advance on your home equity – equity you already own and have paid for, the IRS does not consider money received from a reverse mortgage income, they consider it an advance, therefore it is not taxed as income.  This is the case regardless of how you receive the funds – whether monthly installments, a line of credit, or a lump sum, you will never pay income tax on this.

 

What About Deductions on Interest?

 

Here’s one situation where there is a stark difference between a traditional mortgage and a reverse mortgage.  With a traditional mortgage interest and fees paid are tax deductible every year they are paid.  This is still the case with a reverse mortgage, except in the scenario of a reverse mortgage the interest is not paid until the loan comes due, therefore it cannot be claimed as a deduction until this point.  The loan comes due if the borrowers sells the home, passes away, or permanently leaves the home.

 

Property Taxes

 

With a traditional mortgage, property taxes are often taken care of by an escrow service.  With a reverse mortgage the homeowner is 100% responsible for making these property taxes are kept up to date.  If there are financial concerns about the ongoing cost of property taxes, discuss this with your reverse mortgage specialist.  In the new financial assessment there are options to help set aside a portion of the funds to cover ongoing expenses such as property taxes and homeowner’s insurance.

 

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

Another Reason Why I Love Loveland, Colorado

reverse mortgage loveland fort collins greeley longmont westminster coloradoLoveland, Colorado is amazing for many reasons.  While it sits right in the heart of Northern Colorado, with easy access to many surrounding bustling cities, it’s an incredibly low key town.  The people are great, the community truly cares, and of course, it’s a haven for love and has been for 70 years.  There’s a reason Loveland is called the sweetheart city, and goes beyond just the name.

 

2016 marks the 70th anniversary of Loveland’s Sweetheart Valentines program.  Here’s the “sweet” story from the Loveland Reporter Herald:

 

Wilma Davis and Paul Wallace waited 12 years to join the ranks of Loveland Valentine Remailing Program stampers, while Delaine Phillips, Joan Williams and Janice Gibbs have been volunteering a collective 75 years.

All five, and several dozen more, braved cold weather, falling snow and travel warnings Monday to kick off the 70th remailing program — an effort by which more than 150,000 valentines are stamped with a special Sweetheart City design and postal cancellation, and then re-sent to destinations around the world.

“You touch lives all over the world, 50 states and 110 countries,” Mindy McCloughan, president of the Loveland Chamber of Commerce said to the volunteers, who will stamp through Feb. 12.

“People are depending on you, snow, sleet, rain and hail. You have snow boots, will travel, right?”

New to the table

Volunteers often do not leave the volunteer remailing program, so future stampers can spend years on the waiting list, which is currently 70 names long.

Wilma Davis first signed herself and her “bestest buddy” Paul Wallace up 12 years ago. She was delighted, about two weeks ago, to get the call that 2016 would be their first year as Loveland valentine stampers.

“We finally made it,” she said. “It was on my bucket list.”

Both she and Wallace practiced several times with black and red ink to make sure their stamps were just so, then dove right in with the other volunteers.

“I think it is just awesome,” said Davis. “The camaraderie is great.”

Wallace and Davis met each other growing up in Kansas when she was 10 and he 11, and were friends all through school before their lives took different directions and they lost touch. Both married and had happy lives, each raising four children.

They reconnected as friends years later, and after both of their spouses died, began communicating by email. The friendship rekindled, and 16 years ago Wallace moved to Loveland. He and Davis are now best friends who travel and volunteer together.

And now, after 12 years of waiting, the friends sat side by side Monday and hand-stamped valentines that will make their way around the country, and perhaps, the world.

Veteran stampers

“I had a friend who was stamping,” Delaine Phillips said. “She came by the house one day and said come with me.”

That is how it all began. She has been stamping valentines for the Loveland Chamber of Commerce for 27 years. When she started, the volunteers worked in the old post office. There was no waiting list, no room full of volunteers, just two rows of tables and a sorting table.

Delaine was joined a few years later by Joan Williams, a 25-year veteran, and Janice Gibbs, a 23-year veteran. The three have been team ever since. They work at a separate table that deals with unusual mail, pieces that are too bulky, specially decorated or with some other issue.

“We wanted to be the Andrews Sisters,” Williams said.

The three have been through a few different labels, The Trouble Shooters, The Three Amigos and most recently, The Three Musketeers.

“We have a lot of people who are very creative,” said Williams. They have seen their fair share of unusual mail with everything from glued-on macaroni to lace and frills. They repackage it, if need be, and make sure it still gets a Loveland stamp or sticker, no matter what is on the outside.

“We try to come up with ways to see most of the stamp without covering up the pictures,” Phillips said as she discussed how they will cut apart the stamps to accommodate the card.

“Remember the obscene postcards?” Gibbs asked as the ladies reminisced about the most memorable valentines they had seen. The postcards were discreetly repackaged and returned to sender.

The waiting list to be a volunteer is a long one, with people waiting to be part of the dances, theme days and good times. Much like the unique valentines they’ve seen, they trio has been lucky to meet many unique volunteers.

“We’ve seen them come and go,” Gibbs said. “That’s the hardest part.”

Story by Pamela Johnson

 

Click here to view the article on the Reporter Herald website.

 

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

 

Divorcing After Retirement? Reverse Mortgage Can Help

reverse mortgage loveland fort collins greeley longmont coloradoIt’s becoming more and more common for seniors to divorce after retirement.  This is happening for various reasons, but a big one is that retirement now last for decades versus only years, and many people are looking to make those golden years the best yet.

 

But senior divorces can get messy, as there are often many assets to sort out.  During divorce negotiations, a home is often one of these assets.  This home is possibly owned free and clear, or with a lot of equity.  For divorcees age 62 and over, a reverse mortgage can be used as a tool to help with settling this asset during divorce.  The great thing about reverse mortgage is it allows someone to stay in the home and live mortgage payment free, AND access funds from the equity.  Here are a couple scenarios in which reverse mortgage would be of benefit.

 

Scenario 1: When splitting the home asset, instead of selling the home, one party could be allowed to stay in the home and obtain a reverse mortgage, of which the other party receives the funds from.  This can be a win-win.  In cases like this, the financial settlement can even be wrapped into the loan if the divorce is final before the closing.  This would mean a reverse mortgage would be part of the divorce settlement discussion.  It is important to understand that the party that remains in the home will be responsible for certain obligations pertaining to the home, such as property taxes and homeowners insurance.

 

Scenario 2: Possibly you’re used to living off two incomes – whether it be from work, or social security and pensions.  Suddenly dropping down to one income can be devastating.  In cases like this getting the home in divorce proceedings can be a huge benefit, as once the divorce is final, a reverse mortgage could be obtained on the home.  The funds could come in monthly installments, a line of credit (that grows), or a lump sum.  In addition, if you wanted to sell the home and move, a reverse mortgage could be used to purchase the new home – and can even allow you seek homes that would otherwise not be in your price range.  The best part?  You will always live mortgage payment free.

 

If you are considering a divorce, or sifting through the process, don’t hesitate to contact me to further understand how reverse mortgage can help, and whether or not you qualify.

 

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

 

Nursing Home vs Reverse Mortgage

reverse mortgage colorado fort collins loveland greeleyIn our society, the elderly and nursing homes go hand in hand.  But when speaking with elderly people, one of their biggest fears is being placed into a nursing home.  Who can blame them?  According to National Center on Elder abuse, one study interviewing 2,000 nursing home residents reported that 44% said they had been abused and 95% said they had been neglected or seen another resident neglected.  When considering the psyche of an older senior, nursing homes or convalescent homes mean “end of life”.   Often times adult children don’t know a better solution as the needs of the parents increase, the home is no longer suited for their parent, and/or they do not have the funds or the time for in home care.   Reverse mortgages have been helping seniors in need for years.  But now as retirement planners are realizing the benefit the can offer long term, they are now being used more proactively.

 

Reverse mortgage is a great method to finance in-home care to avoid nursing homes, pay for medical care, and even fund home modifications.  For seniors who are looking to situate long term and prepare to live their golden years in their own home, a move to a new residence closer to family or more suited for senior life may be in order.  The reverse mortgage for purchase is perfect option for these situations.  Reverse mortgage for purchase allows the purchase of a different residence using a reverse mortgage while still employing the perks of a traditional reverse mortgage – living mortgage payment free.  In addition, reverse mortgages do not affect social security, pensions, or medicare.

 

Both reverse mortgage for purchase and traditional reverse mortgage are available to seniors 62 and over.  The home must be the primary residence and it must be a HUD approved property type.

 

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

Reflecting on the Holidays and Elderly Family

reverse mortgage colorado fort collins loveland berthoud greeley windsorWith Christmas now behind us, many families are reflecting on the holiday.  Adult children enjoyed spending time with their aging parents or relatives, grand children and great-grand children were squeezed and showered with adoration.  For some spending time with family is an encouraging sign of many happy years to come…but for others, it can be a time that raises concern about health or finances, and questions about how aging  parents will continue to cope.  Will this person need additional care?  Do they need a more adequate home closer to family or suitable for aging in place?  How does long term retirement look?

 

Concerns such as this are very common around the holidays.  To better guide you in the right direction and ultimately direct the family in the right direction, here are some questions to ask yourself:
• Are they able to get around by him or herself? Are there stairs in the home?

 

• Is this person able to take medications without assistance? Is there a health concern that would require more regular supervision, such as Alzheimer’s or Parkinson’s?
• Is your parent able to manage mortgage payments, home-owners insurance payments, and property taxes. Is the home outdated and in need of frequent repairs – such as a furnace, roofing, electricity?

 

• Where is this home located? Is it in close proximity to relatives, hospitals, etc? Or is it secluded and away from town?

 

• Is this person lonely? Has he or she suffered the loss of a spouse? Does he or she have a solid social group or close friends?
Based on your answers to these questions, aging at home may be an option for years to come – and reverse mortgage can be a solution to many problems even for married couples. Reverse mortgages allow homeowners age 62 and older to access equity in their home, without acquiring a loan or mortgage payment, and the funds can be accessed via a line of credit, monthly installments, a lump sum, and even as a new home purchase. The homeowner will always retain the title and remains in the home. All reverse mortgages are government insured with an FHA backed loan and no repayment is due until the last borrower passes away or permanently leaves the home. At that time there are several options that include keeping the home in the family. If selling the current residence and moving into a new home is a more reasonable route, Reverse Mortgage for Purchase may be an option.

 

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

Tackling Senior Identity Theft

 

Jan Jordan Reverse Mortgage Identity Theft ColoradoWhat is Identity Theft?

 

According to the 1998 Identity Theft and Assumption Deterrence Act identity theft is when someone “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law.”

 

The three most common types of identity theft are:

  • Financial identity theft (using another’s identity to obtain credit, goods and services)
  • Identity cloning (using another’s information to assume his or her identity in daily life)
  • Medical identity theft (using another’s identity to obtain medical care or drugs)

How does Identity Theft happen?

 

In today’s technology driven society, protecting your identity is more important than ever.  But don’t assume identity theft only happens online.  It can happen anywhere, anytime.  Someone could be watching over your shoulder as you fill out a form at your doctor’s office.  Another individual could be rummaging through your trash, hoping to find a tossed out credit card offer.  Your email program’s spam filter may not be blocking those emails from Phishing websites.  There are many ways to fall victim to identity theft, arming yourself with facts and prevention is key to protection.

 

How do I protect myself from Identity Theft?

  • Be aware of your surroundings.  When filling out forms that include private information, take a seat away from others when possible. Never throw out forms or paperwork that may have your personal information on them, always take these home with you and dispose of them properly.
  • Don’t toss out credit card offers or other junk mail that pertains to obtaining credit.  In addition, any other private information you have – bills, car registration, insurance documents, bank statements – should always be disposed of properly and NEVER put out with your household trash.  These items should be shredded or burned.  In addition, limiting the amount of junk mail you receive by “opting out” of mail distribution lists can vastly decrease your risk.  Opt out by calling 1-888-5-OPTOUT.
  • Never follow links to bank accounts, credit accounts, PayPal accounts, etc from an email.  “Phishing” emails may appear as a completely legitimate email from your bank or credit card company, warning you of unauthorized transactions or other alarming information.  These emails will include links that take you to a website that looks identical to your bank’s – but it’s not.  Once you enter your information into this “Phishing” site, you have given some of your most valuable financial information to a con-artist.  ALWAYS access your bank and credit accounts by entering their web address into your web browser, NEVER through a link.  Reputable companies will not contact you via email about such important matters.
  • Don’t respond to emails offering money in exchange for “helping” an individual transfer money into the country.  These are always scams and have proven to be very dangerous.
  • Password protect your computer and your wireless internet. Use firewalls and virus protection software.
  • Never give personal information to telephone solicitors or door to door solicitors.  Do not give out personal information over the phone unless you placed the call yourself.
  • Lock your car.  Identity theft via “glove compartment” information is on the rise.  Keeping your car locked can ensure you are not an easy target.
  • Don’t carry your Social Security card in your wallet or purse.  Purge expired credit cards, insurance cards, and ID’s regularly.  Keep these items at home in a safe place.
  • If you do not have a locking mailbox, do not mail payments using your mailbox.  Always take the mail directly to the post office.

 

What do I do if think I’ve been targeted?

 

Contact the Federal Trade Commission at 1-877-IDTHEFT or www.ftc.gov

 

 

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