Category: Quick Facts

Reverse Mortgage for Purchase Down Payment Information

Posted on by janjordan

Reverse mortgage for purchase is a popular option for seniors wishing to purchase a home and live mortgage payment free, just as they would with a traditional reverse mortgage.  This program has been a wonderful tool used by homeowners in Northern Colorado, including Longmont, Fort Collins, Loveland and Greeley.

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
  • Credit and income are irrelevant
  • 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.

For more detailed information about reverse mortgage for purchase, click here.

The required investment (or down payment) changes based on the age of the homeowner and the value of the home they are purchasing.  The following table is an illustrative guide to required down payments.

Jan Jordan Reverse Mortgage Purchase Table

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.

Taxes and your Reverse Mortgage

Posted on by janjordan

reverse mortgage loveland colorado fort collins longmont greeley boulder

 

Spring has sprung in Northern Colorado again!  That’s the good news.  The bad news is this also means it’s tax time.  It’s common during this time of year for me to receive a few questions regarding taxes and reverse mortgage – from both those considering a reverse mortgage, and those who already have a reverse mortgage.

 

Here are the two most common:

 

Are the funds from my reverse mortgage considered taxable income? 

 

No.  Because the funds received from a reverse mortgage are technically an advance on a loan, any payments or lump sums received are not taxable income, meaning they do not need to be reported on a tax return as such.  They also typically do not affect Social Security or Medicare payments.

 

Is the interest from my loan deductible? 

 

No.  Because reverse mortgage holders do not make monthly mortgage payments and typically the interest is not paid until the loan is paid in full, the interest from a reverse mortgage loan is not deductible on a tax return.  This is also the case with a reverse mortgage for purchase loan.

 

FHA insured reverse mortgages are available to homeowners 62 and older with no credit or income requirements.  These loans allow the borrower to live mortgage payment free and receive their loan payment in one lump sum or in monthly installments.  All borrowers are required to participate in third party counseling to ensure all their questions are adequately answered before making a decision.  Reverse mortgages are also available to purchase a new residence.

 

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

3 Things to Do with a Reverse Mortgage in Colorado

Posted on by janjordan

reverse mortgage loveland greeley fort collins longmont boulder colorado

 

 

One of the best parts of a reverse mortgage is the borrower(s) can do anything they’d like with the funds – while also living mortgage payment free.  In Colorado, seniors are more active than ever, whether it be traveling, home improvements, or visiting with family and grandchildren often.  As several Colorado cities always make the list of the best cities to retire (including Fort Collins & Loveland in this survey and Firestone, Parker & Louisville in this one) there couldn’t be a better time or place to enjoy life.

 

Here are 3 fulfilling options seniors are using their reverse mortgage funds for:

 

Take that trip they always dreamed of – After years of working hard, saving for retirement, and raising a family, some reverse mortgage borrowers are using a portion of their funds to take the bucket list vacation they’ve always dreamed of.  This option becomes less probable as they age and makes for a fantastic celebration by the more active seniors.

 

Visit with loved ones – Whether it’s a sister who hasn’t visited in 10 years, or children and grandchildren, or long lost friends, using reverse mortgage funds to visit with loved ones is a very common today.  Travel can be expensive and it holds us back far too often from the visits that mean the most to us, especially as we age.

 

Make home repairs or upgrades – After a life of caring for others, senior homeowners often find parts of their home may have been neglected.  When using a reverse mortgage to tap into home equity without a subsequent loan payment borrowers often make those repairs or upgrades they have been longing for.  Whether it’s a sunroom addition or a kitchen remodel, or just dutiful repairs, this is never a bad option.

 

Reverse mortgages are available to homeowners 62 and over with no income and credit requirements.  This FHA insured loan offers funds through a lump sum or monthly installments and eliminates monthly mortgage payments.  With many protections in place to ensure borrowers are adequately educated before using this option, such as required third-party counseling, reverse mortgages are gaining in popularity among retirees from all walks of life.  And a reverse mortgage for purchase option is available for those looking to purchase a new residence.

 

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

Reverse Mortgage for the Married Couple

Posted on by janjordan

reverse mortgage colorado loveland fort collins longmont greeley

 

It’s a common question among those considering a reverse mortgage, especially in the Loveland and Fort Collins area – “I’m married.  What about my spouse?”  If you and your spouse are considering obtaining a reverse mortgage, it’s important to understand the long term effect it could have on either spouse and feel confident any and all appropriate protections are in place.

 

What Married Couples Need to Know:

  • When applying for a reverse mortgage, whether for traditional loan or to purchase a new home, the amount of money you can receive is calculated according to the age of the youngest borrower. The older the borrower, the more money is available from the lender.
  • Since reverse mortgages are available to homeowners aged 62 and over (with minimal income or credit requirements) if  both spouses are over the age of 62, both homeowners can be on a reverse mortgage loan.  If both spouses are on the loan, the loan continues after either passes away. If only one spouse is on the reverse mortgage loan when the borrower passes, the loan is due and the home will transfer to the estate. At this time the heirs will have the option to pay off the existing loan, sell the home, or obtain a conventional loan. Occasionally this is not a concern if the amount of life insurance is anticipated to be enough to pay off the loan after the borrower dies or another plan has been put in place.
  • Another scenario to consider is if a borrower obtains a reverse mortgage and then remarries. If this was to happen after the age of 62 or even older, it wouldn’t be unheard of for the married couple to live in the home for 20 or more years before the borrower passes. At this time the new spouse would not be protected under the existing reverse mortgage loan and the loan would be due. You could consider looking into refinancing the reverse mortgage and adding the new spouse to the loan after marriage.
  • And yet one more thing to note is the possibility one spouse needs to move out of the home into an assisted living facility due to health concerns. If this happens, as long as the spouse remaining in the home is on the loan, they can continue under their current reverse mortgage.

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

 

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.

FAQ’s about Reverse Mortgage for Purchase

Posted on by janjordan

reverse mortgage colorado fort collins loveland

 

In a recent blog article, I discussed the various options to use reverse mortgage to purchase a home.  One of those options is the Reverse Mortgage for Purchase program (aka HECM for Purchase).  This is an excellent option to acquire a home in Fort Collins, Loveland or Greeley, Colorado – and offers flexible options for varying situations.

 

In this article I’m going to answer some frequently asked questions regarding this program.

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
  • credit and income are irrelevant
  • 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 asset 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 – although it 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

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 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 is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, 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.

Finding a Reverse Mortgage Lender

Posted on by janjordan

reverse mortgage colorado fort collins loveland greeley

 

For many seniors, a reverse mortgage is a feasible option to living within a budget, without the constraints and worry of excessive financial distress.  In order to qualify for a reverse mortgage, the individual must own their home, be at least 62 years old, and have some equity in the home.  There are no income, credit, or medical requirements.  In general, the older the borrower (or the youngest borrower in the case of couples) and the more valuable the home, the more money available.  Other factors also come into play, such as: the appraised home value, interest rates, and the amount of equity in the home.  Once a basic understanding of how a reverse mortgage works, the next step is finding a lender.

 
Continue reading “Finding a Reverse Mortgage Lender” →

Frequently Asked Questions – Part 3

Posted on by janjordan

reverse mortgage colorado fort collins loveland greeleyThis is the third in a three part series of frequently asked questions about Reverse Mortgage.  You can find Part 1 here and Part 2 here.  If you have questions that are not currently listed, please don’t hesitate to contact me directly.

 

Will I Lose My Government Assistance If I Get a Reverse Mortgage?

 

A reverse mortgage does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid or other public assistance, any reverse mortgage proceeds that you receive must be used immediately or they may affect your eligibility. Reverse mortgage funds that you retain would be considered an asset, just as other bank funds.

 

Continue reading “Frequently Asked Questions – Part 3” →

Frequently Asked Questions – Part 2

Posted on by janjordan

Reverse Mortgage Colorado Fort Collins Loveland Greeley
This is the second in a three part series of frequently asked questions about Reverse Mortgage.  You can find Part 1 here and Part 3 here.  If you have questions that are not currently listed, please don’t hesitate to contact me directly.

 

Can I get a Reverse Mortgage even if I have an existing mortgage?

 

You may qualify for a reverse mortgage even if you still owe money on an existing mortgage. The existing loan will be paid off first with the reverse mortgage funds, then the remainder of the funds will be given to you.  This scenario would apply as long as the amount of the reverse mortgage is larger than the existing loan.  For example: if you owe $100,000 on an existing mortgage and you qualify for $125,000 under the reverse mortgage program, under these circumstances you would still have $25,000 left over to do with as you wish AND you would no longer have a mortgage payment.

 

Continue reading “Frequently Asked Questions – Part 2” →

Frequently Asked Questions – Part 1

Posted on by janjordan

reverse mortgage colorado fort collins loveland

This is the first in a three part series of frequently asked questions about Reverse Mortgage.  Find Part 2 here and Part 3 here.  If you have questions that are not currently listed, please don’t hesitate to contact me directly.

 

Are There Any Special Requirements to Get a Reverse Mortgage?

 

In order to qualify for a reverse mortgage, you must own your home, be at least 62 years old, and have some equity in your home.  There are no income, credit, or medical requirements.

 

How Much Money Can I Get?

 

In general, the older you are (or the youngest borrower in the case of couples) and the more valuable your home, the more money you can get.  Other factors also come into play, such as: the appraised home value, interest rates, and the amount of equity in your home.

 

Does My Home Qualify?

 

Eligible properties include single-family homes, 2-4 unit properties, modular homes, condominiums, and townhouses.  This home must also be your primary residence.

 

What are My Payment Plan Options?

 

Funds from a reverse mortgage can be received all at once as a lump sum, as fixed monthly payments for a set term or for as long as you live in the home, as a line of credit which allows you to draw on the loan proceeds at any time, or a combination of all these.

 

How Can I Use the Proceeds from a Reverse Mortgage?

 

Their are no restrictions as to how the proceeds from a reverse mortgage can be used.  Whether it is to supplement retirement income, to cover your living expenses, to repair/modify your home, to pay for medical expenses, prevent foreclosure, pay off existing debts, or simply do something for nice yourself, no one can tell you how you must spend your money.

 

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.

Understanding Identity Theft

Posted on by janjordan

Jan Jordan Reverse Mortgage Identity Theft Colorado

 

What 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 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.