janjordan, Author at Colorado Reverse Mortgage Specialist - Jan Jordan

Author: janjordan

A Hidden Gem – Reverse Mortgage for Purchase

Posted on August 5, 2015August 18, 2015 by janjordan

Nearly everyone is familiar with a Reverse Mortgage and many even know someone who has used one to increase cash flow or help them remain in their existing home. But what many people don’t realize is that you can also use one to purchase a home. This little known portion of the reverse mortgage program, called Reverse Mortgage (HECM) for Purchase, is a golden gem to many seniors who are looking to settle down somewhere other than their current home for retirement. Whether looking to move closer to family, purchase a single level home, or move into a senior community, these homebuyers are able to purchase a home they often wouldn’t be able to afford otherwise while still eliminating mortgage payments – all in a single transaction.

To qualify, the borrower(s) must be 62 years or older, be purchasing an eligible property, have the required down payment, and meet the HECM financial assessment guidelines. Eligible property types are single family residences, new construction where certificate of occupancy has been issued, HUD approved condos and townhomes. Allowable down payment sources include cash from savings or investments, proceeds from the sale of an existing home or asset, gifts. Funds that are borrowed such as a loan or credit cards are not allowed as a funding source. The amount of the down payment varies depending on the age of the youngest borrowers and the cost of the new home.

Working with an educated real estate agent and reverse mortgage specialist will expedite the process, and in most cases in a Reverse Mortgage for Purchase does not take longer to complete than a typical home purchase with a traditional loan.

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.

Reverse Mortgage and the Married Couple

Posted on July 29, 2015August 10, 2015 by janjordan

Maybe you have been looking at reverse mortgage online and as you read and learn, the question keeps arising: ‘what about my spouse?’ This is a perfect starting point for understanding the long term effects of taking out a reverse mortgage as a couple.

Here are a few points to understand:

• As long as both spouses are age 62 or older, they can both be on the loan. If only one spouse is over the required age, a loan can still be obtained, but the loan will not continue for the ineligible spouse if the borrowing spouse were to pass away or leave the home permanently.

• Always bear in mind that the reverse mortgage amount is calculated from the age of the youngest borrower. The older the age, the more money is available.

• There are a few choices when it comes to the loan that will affect its status depending on who is listed as borrower(s). If both are on the loan, when one passes away the loan continues as it was originally set up. The loan will not become due until the other borrower passes away or leaves the residence.

• If both are on the loan, if one spouse needs to leave the home permanently, such as to move into a health care facility, but the other stays in the home, the reverse mortgage will continue as originated.

• If both are on the loan, and one spouse passes away, while it is true the remaining spouse will continue on with the reverse mortgage unscathed, things will change if they remarry. While remarrying will not affect the original borrower, it can affect the new spouse if the borrower were to pass away or leave the home permanently. Reverse mortgage does not include the second spouse automatically. Refinancing or adding the new spouse would have to be considered.

If you are married and considering a reverse mortgage choose a reputable reverse mortgage specialist to work with. They can lay out all your options and help you see the long term picture of what will happen in all the different possible scenarios. It is also especially important to make sure everyone feels comfortable and no one is being pressured into a scenario that could potentially end badly if the proper precautions are not put into place.

Crisis in Retirement

Posted on July 22, 2015July 22, 2015 by janjordan

It is unfortunately not surprising, but more than half of Americans have less than $10,000 in savings. Most coming to retirement age these days do not even have the resources to cover the living expenses and health care costs if they were to leave their jobs. Is retirement only for the rich?

The numbers have been tabulated, and right now there is a gap between pensions and retirement savings for those in these golden years that is more than 6.5 trillion dollars! (This is according to the Center for Retirement Research at Boston College.) Many will be unable to maintain their current standard of living during retirement, let alone live the retirement they once dreamed of.
Millions of seniors live in poverty and the percentage is growing, expected to increase more than 30% by 2020. This trend is a concern not only for the ones retiring but for their families as well. And the overall effect upon society means we are in crisis to provide for our own after they have given their lives working in our country.

Reverse mortgage can be an effective means for seniors 62 and older to rise to their personal need and create a stream of resource that will allow them to comfortably stay in their home – or provide for specific needs, such as medical care. The concept of a reverse mortgage is to use the equity of the home and turn it into liquid cash in the form of monthly payments, a line of credit, a lump sum, and even to purchase a new home. The assistance is well deserved since the equity of the home rightly belongs to the borrower, but unlike a Home Equity Loan, with a reverse mortgage there are no monthly loan payments. And the homeowner retains the title to the home. Once only considered a lifeline for destitute seniors, reverse mortgage is proving to be an excellent tool when used as part of a retirement planning strategy and is making a world of difference for retirees.

How Reverse Mortgage Can Help With A HELOC

Posted on July 13, 2015 by janjordan

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, these types of loans often amortize in a certain number of years, many of them in the standard ten years. This means the borrowers will witness a surprising payment adjustment as they begin to pay principal and interest.

We are now in the years where about 60% are entering this status (according the The Office of Comptroller of the Currency). As the loans reset their payment structure, so will the probability of delinquency rise. This could very well be problematic for many.

If you are a senior 62 or older caught up in an amortizing HELOC loan, you 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.

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.

Beware of Reverse Mortgage Scams

Posted on July 7, 2015July 7, 2015 by janjordan

Like all businesses, there are representatives that are doing an honest job offering themselves for service and help. And unfortunately there are others seeking their own personal advantage. This applies even to reverse mortgages, as the elderly are often prey to scams. Do not be naive and assume that because the program is there to help, that all the offers are true to the reason the program exists.

Having a team on your side of a reputable reverse mortgage specialist and a third party counselor, in addition to friends and family, is a big step to ensuring you are doing everything right.

There are some easy red flags to look for. Here are five giveaways of a reverse mortgage scam:

They ask for money up front

Once you submit an application to a reverse mortgage lender it is fairly standard for them to ask for a deposit for the appraisal. This is usually about $300.00 dollars, but can vary slightly. If you are asked to give anything else, stop. Very little money is required before the closing of the loan. Seek advice before moving forward and do not let yourself be pressured.

They will offer foreclosure assistance

Credible reverse mortgage lenders will not seek out distressed homeowners to offer foreclosure help.

They will show unethical marketing practices

There is a Consumer Financial Protection Bureau that holds all reverse mortgage lenders accountable. If a lender is using public means such as community centers, churches, television or even door to door marketing to pique your interest- beware!

They employ high pressure sales tactics

If you feel uncomfortable or pressured when meeting with your lender, stop. If your questions are not being addressed or the lender is pushing you to a quick decision, you are still in the driver’s seat and it is time to stop and reevaluate working with them.

They lack credibility and reputation
If your reverse mortgage specialist and lender is credible, they will have professional associates such as the Better Business Bureau, the FDIC and the National Reverse Mortgage Lenders Association behind them.

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.

What Latest Reverse Mortgage Changes Really Mean?

Posted on June 22, 2015 by janjordan

In April of this year, HUD release new regulations that reverse mortgage lenders must abide by. As before, borrowers must be 62 or older and be obtaining the loan on a home that is their HUD approved primary residence. The borrower will still be the homeowner and will always retain the title except now, with a reverse mortgage, there will not be a monthly mortgage payment. The borrower will still be required to pay property taxes, homeowner’s insurance, HOA fees, and basic upkeep and utility payments.

Here’s what has changed: one of the most attractive details of a reverse mortgage has always been the lack of credit and income requirements, but this will no longer be the case. According to the new rules, lenders must now consider credit and income for each applicant, similar to a traditional mortgage, the purpose being to minimize possible defaults due to the inability to pay property taxes and homeowners insurance. But unlike a traditional mortgage, if potential borrowers do not meet this criteria, there are still options through a Fully-Funded Life Expectancy Set-Aside, which is an amount drawn under the HECM that is reserved for payment of property taxes and insurance by the lender; or a Partialy-Funded Life Expectancy Set-Aside which works the same as the Fully-Funded option except a smaller reserve is drawn when borrowers meet credit requirements but not income requirements. The amount of both of these reserves is determined by the age of the borrower and the value of the home. These changes apply to all types of reverse mortgages, including Reverse Mortgage for Purchase. For more detailed information regarding these options or questions about the changes, please contact me.

Home values are currently at the highest level since before the recession – and because the amount of the loan is based on the value of the home, there could not be a better time than now to apply for a reverse mortgage – whether it’s a traditional reverse mortgage, a Reverse Mortgage for Purchase, or a reverse mortgage line of credit with exponential growth factor.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Longmont, Greeley, and Front Range areas of Colorado as well as Cheyenne and Laramie, Wyoming. Click here to contact Jan and learn if reverse mortgage is right for you.

Reverse Mortgage Questions Answered for Adult Children

Posted on June 17, 2015 by janjordan

As 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.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Contact Jan and learn if reverse mortgage is right for you.

Dispelling Myths About Reverse Mortgage

Posted on June 11, 2015 by janjordan

A reverse mortgage is a specialized form of loan for those 62 years and older. It offers a way to entertain the lifestyle you imagined, from long held dreams of RVing or travel, to the changing desires that come with events like children moving to different states, or just simply the ability to age in financial comfort.

All the hard years of work can be given to you in the form of cash from the equity of your home. This means all the years of mortgage payments to keep your home asset can be accessible to you now. Your home can actually be put to work for YOU.

When you take a reverse mortgage you retain ownership and the title. Very little will change from all the previous years of homeownership, except you will have the ability to cash in on all the value that has been accruing during your years of dependably paying to live there – while living mortgage and loan payment free.

A reverse mortgage is also called a Home Equity Conversion Mortgage (HECM). This unique type of loan comes with peace of mind since the FHA backs it with a 100% guarantee that you will never owe more than the actual market value of this cherished possession. When you take a reverse mortgage the loan does not come due until the last borrower passes away or moves permanently, and at that time there are options available to keep the home in the family or sell it.

More protection is offered as well, as HUD counseling is not only offered, it is required. The counseling is from an accredited independent third party and takes place before any costs for the loan are set in motion. While this may seem like a requirement, it is more of a privilege so you can understand all the details of reverse mortgage.

The funds from a reverse mortgage can be accessed via a lump sum, monthly installments, line of credit, or even to purchase a home. There are no limitations as to how the money is spent – that is completely up to the borrower.

Being Responsible with a Reverse Mortgage in Longmont, CO

Posted on June 2, 2015 by janjordan

The Reverse Mortgage (HECM) program in Longmont, Colorado continues to help millions create the life of their dreams as they retire and relax into this time of their lives. Seniors age 62 and over are eligible for this type of loan. Regardless of the type of reverse mortgage you get (traditional, line of credit, or reverse mortgage for purchase) the main advantage is the relief from monthly mortgage or loan payments, but the borrower will still have some responsibilities, including a small amount of financial obligations.

Here are the four main commitments borrowers of a reverse mortgage will continue to be required to take care of:

Homeowners Insurance

A reverse mortgage is like other conventional loans requiring the holder to purchase and maintain homeowners insurance. There are many options out there to be discussed with both the reverse mortgage counselor and the lender.

Property Tax

This too is the same as with a conventional loan. The reverse mortgage homeowner will need to pay the property tax. Depending on your financial need, assistance may be available to help pay or defer property taxes. Your reverse mortgage specialist and your local human services office would have more information about such assistance.

Home Maintenance

Your home remains in your possession, so the maintenance of your home remains your responsibility. If you are thinking of selecting the reverse mortgage in the form of one lump sum bear in mind you need to allocate funds for future maintenance needs. This too is an excellent point to discuss with your reverse mortgage specialist or counselor. Any applicable HOA fees also remain the responsibility of the borrower.

Utilities

All utilities, such as electricity, gas, water, and trash will remain the borrowers responsibility.

Reverse Mortgage – How Adult Children Can Help Their Parents

Posted on May 27, 2015 by janjordan

Perhaps your parents raised you in the home they are now ambling about. As you see them begin to slow, or have to jump on a plane every time they wish to see you, thoughts of helping them to have an easier time come across your mind. After all they deserve at this time of their life to relax, do what they wish to do, and be able to manage their health and their finances with comfort.

Considering a reverse mortgage is one good option. It gives more wiggle room to work with when balancing the growing needs of health, home, and retirement.

As you discuss the future and it’s possibilities, there are a few questions to ask yourself and everyone else involved.

First, do you or other siblings have concerns about inheritance and/or equity? Your parents probably care that all of you feel you have received from them as they pass. While this discussion is not always easy, it is undeniably beneficial. Talking will give clarity, which in turn provides direction. It also gives everyone a chance to be heard.

Second, do you have financial resources to help your parents? Health needs as we age are difficult to determine but it is important to build in a buffer for the unexpected. The stress of aging is enough in and of itself, being able to take care of the costs should not have to be an additional worry for those that raised you.

Another good question that only your parents can answer is, ‘What are my parent’s wishes about staying in their home, especially if their medical needs grow?’ For some they are ready to let go of the home of their youth and family, wanting to change and simplify their lifestyle. For some being closer to you is the most important desire. And for some staying in their home as long as possible is the most important wish that could be fulfilled. Since the decision about reverse mortgage as a way to fulfill desires is a big one, looking toward the future and developing a plan will only benefit everyone – and ultimately make your parents’ happy.