janjordan, Author at Colorado Reverse Mortgage Specialist - Jan Jordan

Author: janjordan

How to Use Home Equity for Retirement Security

Posted on November 4, 2015June 26, 2017 by janjordan

Did you know home equity can be used to reduce the overall risk of your retirement plan? Your house is a great asset that for many years has been overlooked in financial planning for seniors. This is making a sharp turn lately as retirement experts are beginning to understand how tapping into home equity via a reverse mortgage should never be underestimated.

Let’s take a look at where most seniors sit currently when it comes to retirement…

• Only 22 percent of workers are very confident they will have enough money in retirement.
• 45 percent of Americans have saved exactly nothing—zero.
• The expected lifespan of women is 20 years past the age of retirement, and two years longer than men.
• The average retiree can expect to spend $220,000 in out of pocket health care costs during retirement.
• Medicare pays for an average of 62% of a seniors health care costs, leaving 38% to come out of pocket.
• 36% of up and coming retirees will rely on Social Security as their sole income.

A reverse mortgage can help in many different ways – and the how the funds are spent is entirely up to the borrower. Whether it’s a monthly payout or a line of credit, when combined with other retirement planning tools, reverse mortgage can allow retirees financial security during the years they worked so hard to enjoy. Reverse mortgages are available to senior homeowners 62 and over – even married couples. They will live mortgage payment free, always retain the title to the home, and because these loans are non-recourse, no one – including heirs – will find themselves saddled with the debt after the owner passes. There are also various solutions for adult children or other family members who may want to keep the home in the family.

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.

Should Reverse Mortgage Be Part Of Your Retirement Portfolio?

Posted on October 28, 2015November 2, 2015 by janjordan

For the past quarter century seniors have easily managed to retire on three things: company pension plans, social security, and personal savings. But with a rocky economy not long behind us – and still unsteady in many areas, baby boomers are being forced to take a second look at their retirement portfolios. Previously, tapping into home equity for retirement has been considered a last resort. But should it be?

Both company pensions, personal investments, and social security benefits face much uncertainty down the road. And if retirees have had the ability to hold onto any personal savings during the economic downturn, it likely took a hit as well. But when adding home equity into the retirement equation, statistics show most baby boomers 51 and over have enough to retire comfortably. So where does this leave reverse mortgages?

In a recent Forbes article, author and retirement income planning expert, Jamie Hopkins says: “The lack of focus on home equity in retirement income planning is nothing short of a complete failure to properly plan and utilize all available retirement assets. This needs to change immediately because strategic uses of home equity, especially reverse mortgages, could save many people from financial failure in retirement and help stem the overall retirement income crisis facing Americans.”

And he’s absolutely right.

For seniors 62 and over, reverse mortgage is something that should be considered when seeking retirement funding solutions. Homeowners can access the equity in their home and no repayment is due until the last borrower passes or permanently leaves the home. For retirees, it could mean the difference between living, living comfortably, and living out retirement dreams.

When looking down the road toward financial planning for retirement, ask yourself a few questions and determine if a reverse mortgage might fit into your Plan A or your Plan B. Discuss it with your spouse and with your financial planner. Learn the facts about reverse mortgage and how it will affect your loved ones after you pass.

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.

What Happens to a Reverse Mortgage After Owners Pass?

Posted on October 19, 2015April 19, 2016 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?
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.

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.

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.

Salute to Seniors Expo 2015 at the Ranch in Loveland – Reverse Mortgage

Posted on October 12, 2015April 19, 2016 by janjordan

I’m looking forward to attending the 2015 Salute to Seniors Expo on Thursday, October 14, 2015 from 9:00am – 3:00pm!

The Salute to Seniors Expo will be held at the First National Bank Exhibition hall, just south of the Budweiser Events Center on the grounds of the Ranch Events Complex in Loveland, Colorado.

Please stop by and say hello if you are in attendance. I will be available to answer questions about both traditional reverse mortgages and the reverse mortgage for purchase program.

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

Reverse Mortgages Helping the Elderly Age at Home

Posted on October 8, 2015April 19, 2016 by janjordan

As traditional forms of elder care continue to be overshadowed by numerous other options, reverse mortgage is often helping senior individuals stay in their homes while they age. 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 using this opportunity to pay for care that would otherwise not be covered by basic Medicare or Medicaid.

Traditionally, “long term” elder care takes place in a nursing home or assisted living facility. Medicare or Medicaid will often cover these expenses. but there is little public assistance for “in-home care”, although it varies from state to state. As economic woes lend to retirement fears, reverse mortgage is more commonly being utilized for what it can do best, provide security for those most in need and offer a longer-term lifeline without disrupting the lives of the recipients.

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. Benefits include:

Comfort. We all know the saying “There’s no place like home”, but this is often especially true when a senior has lived in a home for years or has lost a spouse. Uprooting from such familiarity can have drastic affects.
Community Ties. More often seniors are developing strong community ties well into their retirement years. Family and friends are wonderful for grounding an aging loved one.
Independence. Remaining independent keeps seniors healthier than ever realized before. It also allows them to continue doing many of the things they have always done and enjoyed.
Mentality. Our home life strongly impacts how we feel mentally. If a senior stays home to age they are likely to feel much better and happier than one that has been put into a nursing home or assisted care facility.

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

How Prepared Are You If Your Spouse Dies? Part 1

Posted on September 29, 2015September 29, 2015 by janjordan

Regardless of age, losing a spouse is difficult – and the impending “business” that comes along with it doesn’t make it any easier. This is why we should all ask ourselves at some point, “Am I prepared if my spouse dies?”. There are so many various aspects to being “prepared”, and although I can’t help with many of them, I can help with some simple suggestions to making sure you aren’t stuck with unexpected questions.

It’s not uncommon in marriages or partnered relationships for each spouse to take care of different bookkeeping tasks. For example, it’s very common for the husband to manage retirements funds – pensions, IRA’s, etc. While the wife may handle personal address books or paying bills. Take a minute and think about this? Not only what you may not know, but what your spouse may not know.

Here are some suggestions to putting this information in order:

• Begin by making a list over a week or two, and ideally an entire month. Make note of what “business” you do. How many passwords did you need online? How many account numbers on the phone? What about PINs? The results may surprise you. In today’s high tech yet overly scammed world, everything is secured under lock and key.

• Although it is best if both spouses can contribute to this exercise it is not a requirement. Either way, spend some time brainstorming together. We often will remember things when discussing them with someone else.

• It’s important to make a physical list of this information, whether typed or handwritten. What you shouldn’t do though is save this information online. Hackers will seek data that includes account numbers, logins, and passwords and this could lead to compromising your accounts and even identity theft. Even if you think it’s secure, there really is little guarantee that is true. Keeping this list with your most important documents – such as birth certificates, titles to homes and vehicles, etc – is going to be your safest bet, but make sure both spouses know where to find it.

What to include on your list:

Name and phone number of company, account numbers and any PINs associated. If using online management of account, include website URLs of where to login, login name and password, and any auto pay information. If there are specific people you work with at these companies, include their names.

If only one spouse is listed on the account, make an effort to add the other one. I recently witnessed an elderly woman at the DMV who was unable to renew her driver’s license because all the mail that came to the home was in her husband’s name. This is more common than many people realize – and often they don’t even know until they’re caught in jam.

• Home loan
• Home insurance
• Car loan
• Car insurance policies
• Health insurance policies
• Life insurance policies
• Bank accounts
• Credit card accounts
• Pension, IRA, annuities, etc
• Utilities – electric, water, gas, phone, trash
• Facebook, LinkedIn, etc
• Contact information for family and friends
• Contact information of bankers, retirement or financial planners, loan officers
• Contact information for doctors, dentists, pharmacies, veterinarians, etc (and a little info about what each one is for)

These lists will vary from person to person, so make sure to add your own ideas. Also be sure to update it when anything changes or is added – because hopefully you won’t need it for quite a few more years!

Reverse Mortgage For Purchase – What You Need To Know

Posted on September 23, 2015 by janjordan

We’re all familiar with the two most common options to purchase a home – take out a mortgage loan or pay cash. But for seniors 62 and over, there’s another option – the Reverse Mortgage for Purchase program (aka HECM for Purchase).

Looking for a home in Fort Collins, Loveland or Longmont, Colorado but finding it’s a bit out of your price range? Because the borrower is responsible for only the down payment on the home and will have NO mortgage payments, a Reverse Mortgage for Purchase can help with this too.

What is needed to qualify 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
must meet the FHA’s new reverse mortgage credit and income guidelines
you must have your “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 home or asset, a gift or inheritance, or money you have had for at least 90 days.

Who owns the home that I am purchasing?

As the borrower and homeowner, you will always retain the title to the home, just like any other type of home loan.

What will my personal ongoing obligations be after purchasing a home?

It’s very similar to if you owned your home free and clear – you will NOT have a monthly mortgage payment. But as the homeowner, you will be responsible for paying property taxes, home owner’s insurance, HOA fees when applicable, and basic upkeep including home maintenance and utility payments.

When will the loan become due and payable?

With a Reverse Mortgage for Purchase the loan does not reach “maturity” until:

the last remaining borrower passes away
the homeowner sells the home
the last remaining borrower leaves the home for 12 consecutive months due to illness
the homeowner defaults on property taxes or insurance

Will I need to sell my my current home residence to qualify?

Simply put, no. As long as the loan on your current residence is not an FHA loan and your required investment comes from a HUD allowable source, you can keep your current residence – but the new home will need to be your primary residence. Your lender will ensure you are financially stable enough to support the ongoing obligations on all properties you own. If you decide to keep your current residence as an investment, rental, or vacation property – or you are awaiting the sale of home, it is rarely a problem.

What types of properties can I purchase?

Single family homes, town homes, and FHA approved condos are all eligible properties. The home being purchased will need to be the buyer’s primary residence.

Can I use the loan to build a new home?

These loans cannot be used as construction loans. Homes must have a Certificate of Occupancy issued before a loan application can be started, but as long as that is in place, it is fine if the home is new construction.

How is the “Required Investment” amount determined?

The “required investment” or down payment 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
The current expected interest rate

What may disqualify me from a Reverse Mortgage for Purchase loan?

Foreclosures within the past 3 years.
Unresolved bankruptcy
Unpaid Federal obligations – i.e. federal taxes, defaults on prior government backed loans (such as student loans or government backed mortgages)
Income too low to support multiple properties
Unpaid judgments or tax liens

What is the HUD required “Reverse Mortgage Counseling”?

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 third party, 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.

Finding A Reverse Mortgage Lender in Colorado

Posted on September 3, 2015September 8, 2015 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 or have a substantial amount of equity in it and be at least 62 years old. In general, the older the borrower (or the youngest borrower in the case of couples) and the more valuable the home, the more funds are 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 red flags. 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.

Reverse Mortgage Helps Widow Buy a Home

Posted on August 19, 2015August 26, 2015 by janjordan

It’s a scenario many wish wasn’t reality, but often it is…

A spouse passes away leaving behind a widow. The remaining partner wants to move closer to family. But there’s a catch – although the widow’s current home is owned outright, they would typically need to sell it before they could purchase another. And they wish to move to an area where the median home price is much higher than the home available to sell.

Reverse mortgage for purchase may be an excellent option for this widow. Let’s look at the scenario in detail:

Predicament #1: Widow needs to sell current home before purchasing a new home.

Solution: With a reverse mortgage for purchase, this widow would not need to sell the home immediately. Any personal funds or assets used to purchase the new home could be replenished when the current home sells – and the funds from a reverse mortgage would supplement the initial funds needed. This would allow her to move and get settled immediately.

Predicament #2: The cost of a home in the area the widow is moving is much higher than where she currently lives, meaning the proceeds from her current home sale will not cover the entire purchase.

Solution: When utilizing a reverse mortgage for purchase, her out of pocket cost would be substantially supplemented. For example if she anticipates selling her current home for $200,000 and purchasing a home for $300,000, the reverse mortgage may cover the $100,000 difference allowing her to live mortgage payment free and best of all – near her family.

Reverse Mortgage for Purchase (aka: HECM for Purchase) is an FHA insured program for seniors 62 and over. To qualify, the borrower(s) must be purchasing an eligible property, have the required down payment, and meet the HECM financial assessment guidelines.

Reverse Mortgage and the Alternatives

Posted on August 12, 2015August 18, 2015 by janjordan

Home equity accounts for approximately 70% of a senior’s assets, not including social security or pension. Often times tapping into this equity becomes inevitable when facing health crisis or financial restrictions in retirement. Using home equity should be part of a larger financial plan and there are a few ways it can be incorporated.

Reverse Mortgage

A reverse mortgage is available to seniors 62 and older with married couples being eligible to both be on the loan if both meet the age requirement. Homeowners who obtain these loans do not make monthly mortgage or loan payments but instead receive the funds in a variety of available options, including monthly installment and a line of credit. The loan does not have to be repaid until the last borrower passes away, at which time there are options available to heirs. The amount of the loan depends on the amount of equity in the home and the age of the borrowers – the older the borrower, the more money they can receive. This is an excellent option for both seniors with questionable retirement funds or the retiree who is looking to boost their portfolio.

Home Equity Loan

A home equity loan (HELOC) also taps into equity by borrowing money against the home. This type of loan will be processed as a conventional loan and monthly payments will need to be made to the lender. Any health or future financial concerns should be thoroughly thought through prior to taking out a home equity loan. Loading up the home with debt during retirement can be risky and could result in loss of the home if the borrowers are unable to make their monthly payments.

Downsize

Another option would be to downsize all together by selling the existing home and moving into a more modest situation. Depending on the amount of equity in the home, a homeowner may be able to sell the home for enough money to comfortably be able to make rent or mortgage payments for 10 to 20 years. Just as with a home equity loan, this option could be risky for a person with health concerns as the funds set aside for housing could be needed elsewhere. For homeowners looking to downsize, a Reverse Mortgage for Purchase is also a very good option. This will allow the borrower to move into the home they desire AND eliminate mortgage payments.

Before making any major decisions regarding how to effectively use the equity in your home, it is best to consult with a financial adviser and a reputable reverse mortgage lender.