Tag: financial planning

Home for the Holidays and Reverse Mortgage

Posted on by janjordan

While Christmas 2012 turned into New Year’s 2013, many families came together to celebrate the holidays.  Adult children enjoyed spending time with their aging parents or relatives.  Grandchildren and great-grandchildren had their cheeks pinched and were forced to eat spoiled left overs from the fridge (we’ve all been there, right?)  For some spending time with family is an encouraging sign of many happy years to come…but for others, it can be a time that raises concern about health or finances and questions about how aging  parents will continue to cope.

 

Concerns such as this are very common around the holidays.  To better guide you in the right direction and ultimately make the best decision possible, 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 Is the home outdated and in need of frequent repairs – such as a furnace, roofing, electricity?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.

 
More information can be found specifically about how a reverse mortgage may affect adult children here.   It is especially important to work with a reputable lender and watch our for scams if parents or loved ones are considering a 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. 

 

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. 

 

 

 

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.

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.