Tag: facts

Can a Reverse Mortgage Benefit a Widow?

Posted on by janjordan

When a spouse passes, it’s a very difficult time for the widow and the family.  In addition to the emotional toll, it’s not uncommon to face a sudden and often unexpected financial toll.  After a spouse passes, it is more common than not that there will be a reduction or elimination of the deceased spouses pension or social security benefits. This can create a serious strain on the widow to continue to make mortgage payments, property taxes, homeowners insurance, home repairs, in addition to other daily expenses.

 

If you are a widow financially struggling without your spouse, a reverse mortgage can be of benefit.  Senior homeowners age 62 and over may qualify for a reverse mortgage, regardless of income or credit.  A reverse mortgage does not have to be repaid as long as the homeowner continues to live in the home.  This can make it possible for a widow to remain in the home without the financial strains that may be present otherwise.

 

If you are a married couple considering a reverse mortgage, you can find some helpful tips here.  You can also learn more about what happens to your home after both spouses pass away here.

 

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. 

 

 

Your Reverse Mortgage Appraisal

Posted on by janjordan

 

If you are a senior 62 or older considering a reverse mortgage, a home appraisal by an FHA approved appraiser is required for every loan.  Once your reverse mortgage lender has received your application, the lender will contact an FHA appraiser.  The appraiser will then contact you to schedule a time that works for them to visit your home.

 

Here is what to expect from a reverse mortgage home appraisal:

 

The Inspection:
During the inspection, the appraiser will walk through your home with you.  It is not uncommon for the appraiser to take photographs of your home, primarily if there are specific features that may add to the value of the home or may be in need of repair.

 

The Research:
The appraiser will then begin to research various factors that will come into play, such as comparable home sales in your area.  The appraiser will review public records, multiple listing services, tax assessor’s records, and any other resources available to determine factors that will influence the value of your home.

 

The Appraisal Report:
After analyzing your home along with comparable home sales in your area, the appraiser will deliver the appraisal to be used with your loan request.  The report will contain all the information about your home, the comparable home sales that the appraiser used, and any photographs of your home.

 

Once the appraisal is completed your reverse mortgage lender will provide you with a copy of your report and update your reverse mortgage figures based on the appraised value.

 

There are some simple things that you or your loved ones can do BEFORE the appraiser arrives that can affect your value and prevent repeated visits by the appraiser.

 

For example, look for and repair the following if possible:

 

Do you have any chipping or peeling paint inside or outside the home?
Do you have any exposed electrical wires?
Do you have any current or past water leaks that have not been treated?
Do you have any decks or staircases without hand rails?
Does your roof have any issues with leaking or dose it show excessive wear?

 

If home repairs are required for a reverse mortgage, they can sometimes be completed after closing on the loan, using the proceeds from the reverse mortgage, thus eliminating the outgoing cost for seniors.  Ask your reverse mortgage lender for more information about this option.

 

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. 

 

 

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. 

 

 

 

5 Ways to Spot a Reverse Mortgage Scam

Posted on by janjordan

 

Reverse Mortgage Scams

Watching out for a reverse mortgage scam should be on the top of the list for anyone considering such a loan, but it’s especially concerning to adult children who are looking out for their aging parents.  There are some fairly simple guidelines to abide by in order to steer clear of such fraud.

 

1. Unethical Marketing Practices
This is one of the of the sure tell signs something could be fishy.  Reverse mortgage lenders are held to a standard of marketing by the Consumer Financial Protection Bureau (CFPB) that other mortgage lenders are not.  Watch out for reverse mortgage lenders who solicit through means such as television, door-to-door, churches or other community centers, direct mailers, or other extensive advertisements.

 

2. Asking for Money Up-Front

 

If you are beginning the process with a reverse mortgage lender it is not uncommon for them to ask for an appraisal deposit of around $300, but if they are requiring an amount much in excess of this prior to your required reverse mortgage counseling and the official closing of the loan, this is definitely a scam.  With a reverse mortgage very little money is required to get started.

 

3. Foreclosure Assistance

 

Although reverse mortgages can be a solution to foreclosure in some situations, reputable lenders will not solicit to homeowners in distress.  Foreclosure scams have run rampant as the housing market has been rocky, but senior homeowners are often easy targets to such scams.

 

4. High Pressure Sales

 

When working with a reverse mortgage lender, it’s important that you feel comfortable and confident in your decisions.  If you feel you are being pressured or that your questions are not being addressed, it may be time to question whether or not you want to continue working with this lender.

 

5. Lacking Credibility

 

A credible lender will have a network of professional associates, such as the Better Business Bureau, the National Reverse Mortgage Lenders Association, and the FDIC.  If a lender is lacking these networks, it should be cause for question and concern.

 

Although there are certainly disturbing scams that exist in the reverse mortgage industry, there are also many reputable lenders who are there to work through the process with you, answer all of your questions, and make sure you are making the right decisions for you and your family.

 

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.

Reverse Mortgage and Retirement Financial Planning

Posted on by janjordan
Reverse Mortgage Colorado Financial Planning
Reverse Mortgage and Financial Planners

 

When financial planners counsel retirees on how to best leverage their retirement, social security, and assets, considering a reverse mortgage is often not part of that conversation – but this is beginning to change.

 

As the myths of the industry are laid to rest, many professionals are beginning to better understand how reverse mortgage can be used as a financial planning tool for seniors on a strict budget.  These reverse mortgages can often mean the difference between getting by and living life.

 

In a recent Reverse Mortgage Daily article financial planner, Dr. John Salter, discusses his experience in studying the ins and outs of  reverse mortgages – and eventually understanding why they should be part of the conversation.  Dr. Salter holds seminars for other financial planners and says reverse mortgage is always a hot topic.  He expresses the need to alleviate misnomers in the industry and for his colleagues to re-learn everything they once thought they knew.

 

A few tips for financial planners:

  • Seek out and work with a reputable reverse mortgage specialist who has strong ties to the community, lends from an organization that is a member of the Better Business Bureau, and is associated with the National Reverse Mortgage Lenders Association.
  • Make sure you fully understand the information you may be offering your retiree client.  With the amount of misinformation within the industry, if you are not 100% sure of an answer, call your trusted reverse mortgage specialist to ensure the information you are providing is accurate.
  • Communicate with adult children who may have concerns and make sure they fully understand the process from A to Z.  Eliminating misinformation is key.
  • Remember, reverse mortgages are not one-size-fits-all.  Be creative and comprehensive when considering adding a reverse mortgage to a long term retirement plan.  And don’t hesitate to contact a reputable reverse mortgage specialist if you are on the fence.

 

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. 

 

Should Your Elderly Parent Age in Place?

Posted on by janjordan
What are the options?

 

As you watch your parents or loved ones age, it can often be a struggle to determine the best option for their long term housing. Should they age in place in their home? Should you make space in your home for them? Should they move to a long-term care facility? Or should they move to a home that more adequately suits their changing needs?

 
To better guide you in the right direction, here are some questions to ask yourself:

 
• Are they able to get around by him or herself? Are there stairs in the home?

 

• Is this person able to take medications without assistance? Is there a health concern that would require more regular supervision, such as Alzheimer’s or Parkinson’s?

 
• Is your parent able to manage mortgage payments, home-owners insurance payments, and property taxes. Is the home outdated and in need of frequent repairs – such as a furnace, roofing, electricity?

 

• Where is this home located? Is it in close proximity to relatives, hospitals, etc? Or is it secluded and away from town?

 

• Is this person lonely? Has he or she suffered the loss of a spouse? Does he or she have a solid social group or close friends?

 
Based on your answers to these questions, aging in place may be an option. If financial strains exist surrounding the current mortgage, a reverse mortgage may be an option. Reverse mortgages allow homeowners age 62 and older to access equity in their home without concerns about income and credit. The homeowner retains the title and remains in the home. With a reverse mortgage homeowners can lessen the financial burden of mortgage repayment and can even receive their funds through a lump sum allowing for any necessary home repairs or improvements to be covered financially. All reverse mortgages are government guaranteed with an FHA backed loan and no repayment is due until the last borrower passes away or permanently leaves the home. At that time there are several options that include keeping the home in the family. If selling the current residence and moving into a new home is a more reasonable route, reverse mortgage may still be an option.

 

Often times adult children encourage their elderly loved one to move in with them, not taking into account that this person will be leaving everything that is familiar, including their home, neighborhood, friends and social circles. Before making this decision, consider whether the move will be a strain on the family of which this person will be joining or the person who will be making the move. Depression can be cause for concern with the elderly and interrupting a solid routine or social interaction and hobbies can often make this concern a reality.

 

If this person has medical concerns, considering live-in care or a long term care facility may be the best option. There are many outlets to help guide you in the best direction when making a decision on the proper route or facility.

 

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.