Category: Quick Facts

Changes to Social Security for 2013

Posted on by janjordan

reverse mortgage colorado fort collins loveland windsor greeley berthoud

 

The beginning of 2013 brought about several changes to everything from health insurance to tax code to social security benefits.  While the majority of these changes have been small and will affect seniors very little, a few of them will directly impact recipients of social security benefits.  Here’s what to expect:

 

Extended online services: Many services are now available online that never have been before, such as: starting Social Security payments, accessing benefit verification letter and payment history, change of address, start/stop/change direct deposit information.  Access to this information will reduce the burden of Social Security offices nationwide by allowing workers to have conversations that really need to be done face to face, as well as reduce the burden on seniors who may have trouble getting around.  Online services can be accessed at www.ssa.gov/onlineservices

Continue reading “Changes to Social Security for 2013” →

Responsibility as a Reverse Mortgage Holder

Posted on by janjordan
Colorado Reverse Mortgage

 

Reverse Mortgages have helped millions of seniors live more plentiful lives as they age.  Homeowners and their spouses over the age of 62 are eligible for Home Equity Conversion Mortgages (HECM) regardless of income and credit.  But although they will not have a monthly mortgage payment to pay, they are still responsible for some financial obligations regarding the home.  These include:

 
Property Taxes:

 

Just as with a conventional home loan, a reverse mortgage homeowner is always responsible for paying their property taxes.  Your particular county or city may have a program that allows you to defer a portion of your property tax.  Homeowners can contact their county human services office for more information.

 

Homeowners Insurance:

 

Just as with any conventional home loan, reverse mortgage holders are required to purchase and maintain homeowners insurance.  This yearly expense is something that should be discussed with your lender and a reverse mortgage counselor to ensure the homeowner understands their options and a plan is put in place to keep insurance current.

 

Home Maintenance: 

 

The homeowner or their family will be responsible for continuing to maintain and upkeep the home.  Because a reverse mortgage uses the equity available in the home to make it’s monthly mortgage payments, if major repairs are needed the homeowners will not be eligible for a home equity loan or similar.  It’s important to keep this in mind, especially when homeowners elect to receive their reverse mortgage funds in one lump sum.  Again, discussing this with your lender can help ensure you have planned to have funds available should a major home repair be needed.

 

Ultimately, understanding and planning for these expenses is key to being prepared in the years to come.  Working with and asking questions of a reputable reverse mortgage lender, as well as a reverse mortgage counselor, can help alleviate any concerns a homeowner may have.

 

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. 

 

 

 

Reverse Mortgage Tips for Married Couples

Posted on by janjordan
Married Couple and their Reverse Mortgage

 

It’s not uncommon to hear heartbreaking stories of reverse mortgages that left a spouse in dire straits after the other spouse passed away.  How could this happen?  Is it something that you need to worry about?  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 once the other passes away and feel confident any appropriate protections are in place.

 

What Married Couples Need to Know 

 

When applying for a reverse mortgage 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.

 

If both homeowners 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 if 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, 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.

 
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 that remains 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. 

Reverse Mortgage or Home Equity Loan?

Posted on by janjordan
Reverse Mortgage vs Home Equity

 

 

When talking with senior homeowners or their adult children, a common question is why not just get a home equity loan?  It’s important to understand the difference between a reverse mortgage and a home equity loan.

 

Here are some very important differences:

 

Qualifications 

 

A homeowner requesting an equity loan will require conventional financing.  This relies heavily on having sufficient income to repay the loan and favorable credit.  A homeowner applying for a reverse mortgage does not have limitations based on income or credit, but they must be 62 years or older.  What both of the homeowners have in common is the need to have equity in their home that meets the minimum requirements of their lender.

 

Terms

 

Although both loan types accrue interest, the equity loan borrower will be required to make monthly loan payments until the principle is paid off, usually a 15-30 year term.  On the other hand, a reverse mortgage borrower will not be required to make any loan payments and instead, interest will accrue on the principle.  A reverse mortgage does not have a set term and the loan will continue until the borrower leaves the home for a period of 12 months or more, passes away, or repays the loan voluntarily.

 

Effect on Family

 

With a reverse mortgage, after the passing of a homeowner, the heirs will be responsible for determining what they want to see happen with the home.  Heirs are not able to “take-over” a reverse mortgage.  With a home equity loan, the principle would have been paid down over time and the equity would remain in the home for the heirs to do with as they wish according to the loan guidelines.

 

Overall, before making a decision one way or the other, it is important to understand the pros and cons of each loan type and work with a reputable lender to answer any questions you may have.

 

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

What is Required Reverse Mortgage Counseling?

Posted on by janjordan
Reverse Mortgage Counselor

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.

Here is what you can expect at your counseling session:

The potential borrower will need to schedule an appointment directly with a counseling agency. The lender does not initiate or take part in the session, but can provide you with resources to seek out a counselor. The session will take place in person or over the phone – although the FHA recommends a face-to-face meeting whenever possible.

Prior to your appointment, the counseling agency will provide you with a packet of information to allow you to prepare for the session. During the session the counselor will discuss your immediate and long-term financial needs, your reasons for seeking out a reverse mortgage, address any questions or concerns you may have, and clearly educate you on the process as well as the pros and cons of a reverse mortgage. Again, they are not there to “sell” you on the product, but to educate instead.

Once you have completed the counseling session, you will be provided with a “Certificate of Completion”. This certificate verifies to your lender that you have completed the counseling session and that you understand the essentials of a reverse mortgage. Your counselor will also follow up with you to ensure you have no further needs, questions, or concerns.

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. 

 

Beware: Reverse Mortgage Scams

Posted on by janjordan
Reverse Mortgage Crediblity

You may hear about email scams, telephone scams, door-to-door soliciting scams – but what about reverse mortgage scams? Unfortunately just as we have scams in every segment of society and at every opportunity, reverse mortgages and seniors are not immune to such activity.

 
In the past decade, reverse mortgages also known as Home Equity Conversion Mortgages (HCEM), have increased more than 1,300 percent! This certainly offers an astounding opportunity for fraud perpetrators.
What do reverse mortgage scams look like?

 

Victims may be offered a free home, an investment opportunity, or foreclosure and refinance assistance. Senior citizens are often unsuspecting targets for scammers, as they are not familiar with the multitude of unscrupulous and dishonest “programs” that exist. Scammers reach their victims often through churches, investment seminars, television, radio, billboard, and mailer advertisements.

 

When considering a reverse mortgage or HECM product, it is very important to research the company. All reverse mortgages are insured by the Federal Housing Authority (FHA). Seek out companies that are a member of the Better Business Bureau and associated with the National Reverse Mortgage Lenders Association.

 
Tips for Avoiding Reverse Mortgage Scams:

 

  • Do not respond to unsolicited advertisements.
  • Be suspicious of anyone claiming that you can own a home with no down payment.
  • Do not sign anything that you do not fully understand.
  • Do not accept payment from individuals for a home you did not purchase.
  • Seek out your own reverse mortgage counselor.

 

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 the Owners Pass?

Posted on by janjordan
What Will Happen To My Home?

 

A common question and concern surrounding reverse mortgage is what will happen to the home after the homeowners pass?  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.

 

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 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 Adult Children Need to Know About Reverse Mortgage

Posted on by janjordan

 

If you are concerned for your aging parents or relatives as their home becomes too much to manage or too difficult to move about, reverse mortgage may be an option.  It is common for adult children to look into the reverse mortgage process for their parents and help them make the right decision.  Here are some common questions and concerns you may have.

 

 

 

Questions to ponder:


1. Do I have the financial resources to help my parents with their medical and living expenses?
2. Is there a concern from other siblings as to inheriting the home or the equity?
3. What are my parents’ wishes as to staying home if medical care is needed for an extended time?

 

Common concerns:

  • Will Mom and Dad use up my inheritance?

While tapping into their equity, your parents’ home may be appreciating in value, which could allow for some equity left at the end of the loan. They are also able to live comfortably without having to depend upon family members to support them.

  • Will the bank take their home?

No, the bank will not take their home. Throughout the life of the reverse mortgage, your parents will continue to own their home and retain title.

  • How much money will they owe when the loan has to be repaid?

Your parents will owe the total amount borrowed, accrued mortgage insurance premiums, accumulated interest, servicing fees, and any other costs and fees financed through the loan amount.

  • How do my parents repay the loan?

There are three viable options for your parents. They can sell their home to repay the lender and collect the proceeds, choose to reimburse the lender directly from a personal account, or refinance the loan.

  • What happens to the equity if my parents or I decide to repay the loan by selling the house?

There are two options. Either your parents or the heirs can keep the home and pay the balance due on the reverse mortgage, or they can decide to sell the home and use the proceeds to pay off the reverse mortgage. Either way, the remaining equity is retained by the owners or heirs.

  • What happens to my mom and dad’s house if they move into a senior care facility?

A reverse mortgage becomes due and payable when the last borrower moves out of his or her home permanently. For instance, moving into a senior care facility, selling the home, passing away or moving in with the children.

  • What happens if the loan balance becomes greater than the value of the home?

The Home Equity Conversion Mortgage (HECM) is a non-recourse loan, which means that the borrower can never owe more than what the house is worth. As HECM borrowers, your parents pay a mortgage insurance premium to the U.S. Department of Housing and Urban Development (HUD). They, in turn, guarantee that the borrower will never owe more than the value of their home when the loan becomes due and payable.

  • What are the risks my parents would be taking in receiving a reverse mortgage?

A reverse mortgage doesn’t affect regular Social Security or Medicare benefits. To find out if it impacts other federal or state assistance or medical programs, contact your reverse mortgage lender, tax attorney, or counseling agency.

  • Are there restrictions on how my parents spend their money?

Your parents can spend their money any way they want. Borrowers have used reverse mortgages to pay for grandchildren’s educations, vacations, new cars, home improvements or to eliminate debts. The money can be used for anything they desire.

  • Is there any information that provides what all of the fees will be?

The lender is required to provide your parents with the Total Annual Loan Cost, or “TALC” disclosure, which is required by the Federal Reserve Board. The TALC displays the total transaction costs over the projected life of the loan, which will allow your parents to see all costs related to the reverse mortgage.

 

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. 

5 Reverse Mortgage Myths

Posted on by janjordan
Fact or Fiction?

Myth #1:

  • You lose your home
Fact: 
  • You retain the title to your home
Myth #2: 
  • It’s only for broke people
Fact:
  • Many retirees use reverse mortgage
Myth #3:
  • It’s free money
Fact: 
  • It’s a specialized loan
Myth #4:
  • My equity is safe
Fact: 
  • Your equity is subject to the housing market
Myth #5:
  • It’s not a safe program
Fact: 
  • FHA insured reverse mortgages are fully guaranteed

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 a Reverse Mortgage

Posted on by janjordan
Do I Qualify?

Are you wondering if you or someone you love may qualify for a reverse mortgage and how the process works?  Here are some fast facts to help. Reverse mortgages are available to many homeowners and retirees looking to make a lifestyle change.

 
Do I qualify?

  • Age 62 or older
  • The home you own must be your primary residence
  • Have enough equity in the home to pay off existing mortgage (if applicable)

How much money can I receive?

  • The older you are the more money you can receive with the calculation is based on the age of the youngest borrower
  • The amount you can receive is based partly on the appraised value of your home
  • The current interest rate will also be a factor in the amount of money you can receive with interest rates changing weekly

How do I receive the money?

  • Fixed monthly payments
  • Lump sum payment
  • Line of credit
  • A combination of the options above

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.