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Category: Information for Adult Children

5 Things You Need To Know About Reverse Mortgages In Colorado

Posted on April 8, 2021April 12, 2021 by janjordan

Reverse mortgages have made a serious comeback in the past couple years. After regulation changes were enacted in 2015, the reverse mortgage loan once considered a desperate lifeline is now being used as a retirement tool for even the wealthy. The loans are still only available to seniors 62 and older (including married couples) with the amount of funds available increasing depending on age and appraised value of the home, but now those funds are often being accessed in ways not available before – such as a line of credit or to purchase a home. This really is not your mother’s reverse mortgage, it’s something much more versatile than it was years ago.

Here are some lesser known facts about today’s reverse mortgage:

1.) I’ve said it before and I’ll say it again – the borrower will always remain the homeowner as long as basic responsibilities such as property taxes are paid, homeowners insurance is kept current, and utilities and HOA fees are paid. One of reverse mortgage’s scariest myths has always been that a bank will own the home. This couldn’t be further from the truth. Not only will the borrower remain the homeowner, they will also retain the title.

2.) There are NO mortgage or loan payments. That’s correct. Regardless of how the borrower decides to utilize the reverse mortgage funds, they will not pay a loan or mortgage payment while they remain in the home.

3.) With a Reverse Mortgage for Purchase, borrowers can wrap both the home purchase and the reverse mortgage into the same transaction allowing them to buy their dream home – AND the reverse mortgage will substantially supplement purchasing power allowing a home to be purchased that may have once been out of their price range. When using a Reverse Mortgage for Purchase, the borrower is required to provide some down payment and the reverse mortgage funds will make up the rest of the purchase price.

4.) Married couples can both be on the loan regardless of how the funds are utilized. Another all too common myth is that in the case of a married couple, if one spouse passes away the other spouse will be evicted. When working with a reputable reverse mortgage lender this should never happen. As long as both spouses are 62 or over, they can both be on the loan allowing either borrower to stay in the home until the last spouses passes away or permanently leaves the home.

5.) Heirs are not “saddled” with the debt of a reverse mortgage. After the borrower(s) pass away, there are several options as to what the heirs can do with the home. And in today’s hot housing market, the home may gain equity that can be available to the heirs. Most all reverse mortgages are FHA insured meaning the loan will never exceed the amount of the home sale – even if more is owed, and it also means it will only ever require the amount of the loan even if the home is worth much more when it comes due.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Lupton, Erie, Lafayette, 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.

Is Refinancing A Reverse Mortgage Right For You?

Posted on April 1, 2021April 12, 2021 by janjordan

Reverse mortgages are for seniors 62 and older, including married couples, and were once considered a life line. Times have changed, and now reverse mortgages are regularly being incorporated into retirement planning. But refinance a reverse mortgage? It’s not something you hear about often, or maybe you don’t even realize it’s an option. And why would someone want to do this? Well, here are some fast facts:

Who might want to refinance:

• In the case of a remarriage, possibly you want to add the new spouse (note: new borrowers added must be 62 or older).
• Or in the case of divorce, you want to remove a spouse.
• If the housing market has improved drastically, like we’re currently seeing all over northern Colorado, maybe you want to tap into the new equity.
• Better interest rates? Just like with a traditional mortgage, this matters.
• Interested in the Line of Credit option but took out the monthly installments? Then refinance may be for you.

What you need to know:

• The process is similar to that of a traditional mortgage refinance, except you will still be able to live mortgage and loan payment free.
• You will need a new appraisal.
• Some older lenders have exited the reverse mortgage industry, such as Wells Fargo and Bank of America. If you currently have your loan with one of these lenders, you’re not out of luck, you can still refinance through an existing lender.
• You can shop around. You are not stuck with your current lender.
• If your previous reverse mortgage was not FHA insured, you can switch to one that is. The FHA insurance offers consumer protections, including the promise that you’ll never owe more than your home is worth at the time the loan comes due.
• You will need to take part in third party reverse mortgage counseling.
• If you received your reverse mortgage before 2015, be aware some of the requirements have changed. Now income and credit does play a factor, although there are options if you fail to meet the new criteria.
• If you’re not sure you want to stay in the home, refinancing may not be the best move. Instead possibly consider selling the home to pay back the existing reverse mortgage, then look at a Reverse Mortgage for Purchase to downsize or move to a more suitable home.
• After the refinance, the borrower will still be responsible for property taxes, homeowner’s insurance, and other related costs to the home such as HOA fees, upkeep, and utilities.

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.

Is Your Home Eligible For A Reverse Mortgage?

Posted on March 4, 2021March 9, 2021 by janjordan

Reverse Mortgages are a specialized loan available to seniors 62 and over. This creative resource is used by a wide demographic – from those looking to supplement a fixed income, to the more affluent in need of protection for retirement assets, and even those wanting to purchase a home in retirement. But there are some requirements when it comes to the actual home…

Which types of homes are included?

According the HUD’s Federal Housing Administration, the home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. Some condominiums and manufactured homes that are approved by HUD also meet FHA requirements.

In the case of a Reverse Mortgage for Purchase, borrowers can use a reverse mortgage to purchase a single family home or 2-4 unit home with completed construction that has received a certificate of occupancy.

Are there reasons my home may not qualify?

A home with very little equity may not qualify, although homes with existing mortgages may.

In addition, homes must be maintained with general upkeep and be current on property taxes and other expenses relevant to the home.

A second home or vacation home may not qualify. The borrower must be living (or plan to live) in the home.

Bottom line

The funds from a reverse mortgage can be accessed via a lump sum, line of credit, monthly installments, or to purchase a home. If you have questions let your specialist guide you in the many scenarios that are possible and the two of you can think creatively about your needs and desires.

Yes, You Can Get A Reverse Mortgage On A Condo In Colorado

Posted on February 18, 2021February 21, 2021 by janjordan

For most of the time reverse mortgages have been around they were not available on condos and many people still believe this to be true. But that changed in 2019.

Previously most condos could not obtain HECM Reverse Mortgage loans because they required approval of the entire building, which included multiple units. The 2019 change now only requires approval of single units. This was a huge step forward for the industry, as many seniors find condos to be comfortable and affordable as they age in place.

Here’s what former HUD Secretary Ben Carson had to say when this change was made:

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said HUD Secretary Ben Carson. “This is an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.

FHA deputy assistant secretary of single family housing, Gisele Roget, also clarified that the previous rules governing condo approvals shut out a lot of senior condo owners from obtaining a HECM in the past, and the new rule helped to address that.

“We recognize that many seniors live in condominiums that were unable or unwilling to go through the process of FHA’s project approval,” Roget said. “And so, by allowing borrowers to utilize the single unit approval, they will be able to age in place in condominiums that do not have the overall FHA project approval.”

Condos can now also be purchased using a Reverse Mortgage for Purchase.

If you have a condo and are interested in learning more about a reverse mortgage, contact me to find out if it could be a fit for you.

I Have A HELOC On My Home – Can I Get A Reverse Mortgage?

Posted on February 11, 2021 by janjordan

The short answer is – absolutely. And as a matter a fact, reverse mortgages are great options to eliminate HELOC payments.

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 many of these loans amortized, leaving the borrowers with higher than predicted payments.

Seniors 62 or older with a HELOC loan 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. During the application process, the HELOC will be discussed and a options of paying it off will be laid out.

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.

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.

What You Need To Know About Reverse Mortgage Counseling in Colorado

Posted on November 6, 2020November 9, 2020 by janjordan

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.

Breaking Down The 7 Top Reverse Mortgage Myths In Colorado

Posted on September 25, 2020 by janjordan

Reverse Mortgage was created to give our retiring generation a way to keep their homes and manage the ever increasing costs of life in America after working long and hard over the years. It is an option that could be just right for you. All applicants are required to participate in HUD approved counseling to ensure all their questions and concerns are addressed. Working with a reputable reverse mortgage specialist will also be critical in the process, as this person should be your advocate – even telling you when a reverse mortgage may be wrong for you.

In the meantime, unravel the myths floating around about what a reverse mortgage is and what it does.

Here are a few myth busting facts:

Myth #1: Reverse mortgages are only for poor people.
Fact: Many retirees use reverse mortgage as a way to fulfill their desires for retirement, or to help grandchildren with college, or even to move into their dream home.

Myth #2: It’s free money.
Fact: It is a loan specialized for those 62 years old and older that does not need to be paid back until the last borrower passes away or leaves the home permanently. If anyone attempts to market a reverse mortgage as “free money”, beware as it is likely a scam.

Myth #3: You lose your home.
Fact: The title of your home stays in your hands.

Myth #4: It is not a safe program.
Fact: Reverse mortgages are FHA insured and fully guaranteed – regardless of how you receive the payout.

Myth #5: My equity is safe if I don’t use a reverse mortgage right now.
Fact: Your equity is dependent upon the housing market, which is always changing.

Myth #6: I must be a homeowner or use my current home to obtain a reverse mortgage.
Fact: Reverse mortgages can be used to purchase a home, even if you have never owned a home before.

Myth #7: If I’m married, my spouse will lose the home if I pass away.
Fact: Married couples can both be on the loan if both are 62 or older. There are many ways to ensure both spouses are not at risk.

Aging At Home vs Nursing Home In The Era of COVID

Posted on September 18, 2020September 25, 2020 by janjordan

In our society, the elderly and nursing homes go hand in hand, but in the age of COVID there are all new concerns. 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 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.

Common Questions Adult Children Have About Reverse Mortgages

Posted on August 28, 2020September 14, 2020 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.

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.

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Firestone, Fort Lupton, 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.

The Reverse Mortgage Line Of Credit Is Highly Unique And Here’s Why

Posted on August 21, 2020September 14, 2020 by janjordan

The HECM Reverse Mortgage Line of Credit is still relatively new, and to this day many within the financial and retirement industries haven’t fully grasped how it works. Well, they need to get on board because consumers are interested – and they should be. Here’s why..

First, what is a line of credit? Simply put, a line of credit are funds available to you through a financial institution that you can access as needed, or not at all if the need doesn’t arise. Interest is not acquired if the funds are not used. This makes line of credit options excellent safety nets, especially for the purpose of creative retirement strategy.

When looking at a HECM Reverse Mortgage Line of Credit, the two are obviously intertwined, meaning the qualification requirements for any reverse mortgage still apply. These are: age 62 and over, using your primary residence for the loan, this home must meet HUD’s guidelines and needs to be either paid off or have substantial equity, and the borrower must have the financial capability to continue to pay homeowners insurance, property taxes, and the like. Because there are various options to receive the payout from a reverse mortgage, the line of credit is only one of them.

When you have a reverse mortgage line of credit, you have money that is available to you — but you only accrue interest on the money you withdraw. This means the reverse mortgage line of credit can act as an excellent back up source of funds or can be used for retirement fun, whether it be vacation, spoiling grandchildren, or knowing you have the funds available when you’re ready to take on new ventures.

There are other benefits though. This line of credit is pretty astounding beyond just being a safety net.

Growth: Not only are you not paying interest, but your untouched reverse mortgage line of credit can grow in value. Money in a reverse mortgage line of credit grows at the same rate as the interest rate on the loan PLUS 1.25% monthly. So, if the interest rate on your reverse mortgage is 2.50%, then your line of credit will grow at 3.75% (2.50% + 1.25%).

Unique: This growth is unique to reverse mortgage lines of credit — a HELOC for example does not grow.

Hedge Against Falling House Prices: The growth in a reverse mortgage line of credit is guaranteed — without withdrawals, your line of credit is guaranteed to grow. This means you lock in the current value of your home without taking out an interest acruing loan.

Pretty great, isn’t it?