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Reverse Mortgage Helps Widow Buy a Home

Posted on October 15, 2013June 17, 2014 by janjordan

It’s a scenario all to familiar for the elderly in Northern Colorado…

A spouse passes away leaving behind a widow. The remaining partner wants to move closer to family. But there’s a catch – although the widow’s current home is owned outright, they would typically need to sell it before they could purchase another. And they wish to move to an area where the median home price is much higher than the home available to sell.

Reverse mortgage for purchase may be an excellent option for this widow. Let’s look at the scenario in detail:

Predicament #1: Widow needs to sell current home before purchasing a new home.

Solution: With a reverse mortgage for purchase, this widow would not need to sell the home immediately. Any personal funds or assets used to purchase the new home could be replenished when the current home sells – and the funds from a reverse mortgage would supplement the initial funds needed. This would allow her to move and get settled immediately.

Predicament #2: The cost of a home in the area the widow is moving is much higher than where she currently lives, meaning the proceeds from her current home sale will not cover the entire purchase.

Solution: When utilizing a reverse mortgage for purchase, her out of pocket cost would be substantially supplemented. For example if she anticipates selling her current home for $200,000 and purchasing a home for $300,000, the reverse mortgage may cover the $100,000 difference allowing her to live mortgage payment free and best of all – near her family.

Reverse Mortgage for Purchase (aka: HECM for Purchase) is an FHA insured program for seniors 62 and over, with minimal income and credit requirements.

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.

Marisol Senior Living Community in Loveland, Colorado

Posted on October 1, 2013June 17, 2014 by janjordan

I recently had the honor of contributing to a piece in “At Home“, the real estate insert included in Loveland’s Reporter Herald newspaper. This piece highlighted a beautiful senior community called Marisol Senior Living located in south-west Loveland and I was pleased to discuss the reverse mortgage options available.

About Marisol Senior Living

Marisol is a 35 acre living community designed for seniors 55 and older. Housing options within the community include apartments, duplexes, and single family homes. With varied programs, a fitness center, free continental breakfast, bike trails and much more, this community is all inclusive for those wishing to socialize and stay busy year round. In addition, northern Colorado has long been considered one of the best places to retire in the nation – making Marisol even more attractive.

Using Reverse Mortgage to Purchase

Conventional financing is often the first stop when considering purchasing a new home, but at Marisol, reverse mortgage for purchase options are available for seniors 62 and older, with no income and credit requirements. Often times seniors will have substantial equity in their current home, but be leery of taking out a new loan and managing monthly mortgage payments, thus they stay in a home that no longer meets their needs. A reverse mortgage can be a great way to get into a new home without these worries. When purchasing a new home with reverse mortgage the down payment is determined based on the purchaser’s age and the value of the home and all loans are backed by the FHA. Learn more about how reverse mortgage can be used to purchase a home here.

For more information about obtaining a reverse mortgage in the Marisol Community or elsewhere, please don’t hesitate to contact me at (970) 646-8908 or via email here.

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.

A Heartbreaking Time for Northern Colorado

Posted on September 22, 2013 by janjordan

As I write this, I’m thinking it was exactly one week ago today the residents of Northern Colorado were just beginning to grasp the severity of the 500 year flood that struck our beautiful state. The devastation was and still is heart wrenching.

Last Sunday afternoon and the days after, thousands of individuals who had been evacuated were finding out whether or not their homes still stood safely, many finding them gone all together. Unbelievable. I was fortunate that my own home was unharmed, although many bridges and roads surrounding me were flooded or washed out. And many people I know were displaced, some losing all their belongings. I know of two young sisters who both lived in Lyons, who are are now living at home with their parents, one of them lost her entire home. Another sister lost the entire contents of her home as she was moving into a new house. These stories are repeated again and again from Estes Park to Evans. Each person or family preparing to rebuild their lives.

During times like this it’s incredible to watch communities unite and support their residents, their neighbors. The town of Lyons was hit exceptionally hard – and the town is not expected to even be livable for 4-6 months. All of these town residents are in need of help. Estes Park was similarly damaged, although the town is up and functioning again where possible. Other small mountain towns simply no longer exist – Drake, Glen Haven, Jamestown. What an incredible challenge for the residents, but their strength has been nothing short of empowering, as they work with their neighbors and vow to rebuild these communities. Then the larger surrounding cities of Loveland, Fort Collins, Longmont, Greeley, Boulder – have all stepped up to help not only their own affected residents, but the residents of surrounding towns.

Colorado is very strong and the people who live here are simply amazing. If you have been affected, my heart goes out to you. If you have a reverse mortgage on a home that has been damaged or is destroyed, please don’t hesitate to contact me with questions. I’m here to help. Phone: (970) 646-8908

If you would like to volunteer your time or make donations, or are in need of help, here is a great resource offering a variety of options: http://mycommunityfoundationnc.org/flood

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.

Reverse Mortgage for Purchase by the Numbers

Posted on September 11, 2013June 17, 2014 by janjordan

The Reverse Mortgage for Purchase product allows seniors 62 years and older to use a reverse mortgage to purchase a home all in one transaction. By utilizing this product, along with a down payment, older Americans can fulfill their dreams of living closer to family, move to a senior community, downsize or upsize without a monthly mortgage payment.

With minimal credit and income requirements, many individuals are able to take advantage of this government insured program. Eligible properties include existing single family homes and FHA approved condominiums.

Here is an example of how the program works:

Rich and Carole Swartz want to sell their home and purchase a new home, they are 75 years old. They sell their existing home for $400,000 and use $100,000 of the proceeds to pay off their existing mortgage. That leaves them with $300,000 cash from the sale.

Now assume they want to downsize into a home that costs $300,000. Reverse mortgage proceeds would be $200,000 and the Swartz’s would need to contribute $100,000, leaving them with $200,000 after the purchase.

But what if they want to upsize to a home valued at $500,000? Reverse mortgage proceeds in this scenario would be $334,000 and the Swartz’s would be required to pay $166,000 leaving them with $134,000 cash after the purchase.

Either situation, they now live now live in their new home, free of a monthly mortgage payment, and have cash left over from the sale of their previous home.

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.

Changes to Reverse Mortgage

Posted on September 5, 2013September 5, 2013 by janjordan

I was recently informed that upcoming changes to the FHA Insured Reverse Mortgage program will reduce the amount of proceeds our clients will receive from the loan. FHA may increase rates which, in turn, will decrease proceeds.

In addition, lenders have been notified that there will be stronger qualifying guidelines in the form of a financial assessment. This change may result in taking into account FICO scores, assets, tax and insurance escrows and limiting the amount of draws a customer can take from the loan.

The official guidelines should be out any day and will take effect on October 1, 2013. Counseling and application would have to be completed by the end of September to qualify for existing program guidelines. If you are interested in the FHA-Insured Revers Mortgage, now may be the time to take a second look before the new changes are implemented and qualified funds reduced.

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.

FAQ’s about Reverse Mortgage for Purchase

Posted on August 29, 2013June 17, 2014 by janjordan

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.

How to Purchase a Home with Reverse Mortgage

Posted on August 13, 2013June 17, 2014 by janjordan

There are many reasons a senior may want to purchase a new home versus staying in an existing home. Possibly they want to move closer to town or to family, or eliminate stairs, or reduce size and upkeep. As long as they are 62 years or over, the Reverse Mortgage for Purchase Program could be the right fit. Regardless of the reason, many northern Colorado seniors have family in the Fort Collins areas, as well as Cheyenne and Laramie, Wyoming – and getting situated then staying put is important to them.

There are three ways to use a reverse mortgage to purchase a new home or even build a home to their own specifications.

Here’s a brief run down of how each works:

Option 1: Buy with cash, then utilize a Reverse Mortgage

This option is quite simple. Using cash the borrower has, they purchase a home or have a new home constructed. Once the home is occupied they will utilize a reverse mortgage, allowing them to live mortgage payment free. In order to qualify for a reverse mortgage on a newly constructed home, the home owner must have the certificate of occupancy. Often the homeowner will need to liquidate assets or tap into savings in order to purchase the home, but once the purchase or or new construction is completed they can then take out a reverse mortgage on the home, filling the reserve that was used to make the initial purchase, and live payment free. A downside to this option – the homeowner would likely incur settlement and closing costs twice.

Option 2: Buy with a Reverse Mortgage

With the Reverse Mortgage for Purchase Program, a senior can sell their current home, purchase a new home, and obtain a loan for the new residence and a reverse mortgage at the same time with only one set of settlement fees. And if a senior is not currently a homeowner but wants to be, the Reverse Mortgage for Purchase Program can help them purchase a home, even if they are a first time home buyer with limited income and credit. A downside to this option is that it cannot be used to construct a new home, but can be used to purchase a newly constructed home that has never been lived in before. The homeowner must also take residence in the home within 60 days of purchase.
When utilizing this program, seniors will need to have the means to pay the difference between the sale price of the new home and the maximum amount they can draw on the reverse mortgage, essentially requiring a down payment. Often this down payment comes from the sale of a previous residence. But – the homeowner will live in their new home free of a mortgage payment.

Option 3: Take out a conventional loan on a new home then utilize a Reverse Mortgage

If a homeowner is looking to have a new home constructed to their own specifications, but doesn’t have the funding to buy with cash, this becomes an option. Once the purchase or new construction is complete, the senior homeowners would be eligible for a reverse mortgage and can live payment free in this new home. Downsides to this option include: the borrower would likely incur closing and settlement costs with each loan, and there would be income and credit limits as with any conventional home loan.

With any of these options, the homeowner will always retain the title to their home. The Reverse Mortgage for Purchase program is backed by the FHA and is highly under-utilized. Talk with a reputable lender to learn more or to have your questions answered.

Summer Vacation, Adult Children, and Reverse Mortgage

Posted on August 7, 2013June 17, 2014 by janjordan

As summer vacation is nearing an end, many of us are reflecting on our experiences during the past couple of months. Maybe you took your children on a camping trip or to Disneyland. Possibly you flew overseas to experience a new culture. Or maybe you took a road trip to visit your aging parents or other loved ones. If you visited with elderly family members, it likely came with mixed emotions. Every year they are a little older – and for some, every year brings just a little more worry.

This is very common after a visit. It may raise concerns about health or finances, and questions about how aging parents will continue to cope. If you’re wondering when and how you need to intervene, ask yourself these questions:

Continue reading “Summer Vacation, Adult Children, and Reverse Mortgage” →

How Reverse Mortgage Works in Fort Collins, CO

Posted on July 22, 2013June 17, 2014 by janjordan

The beautiful areas of Fort Collins and Loveland, Colorado are home to many retirees and seniors. Year after year, this area makes news as one of the best places in the nation to retire. Elderly adults stay active, family loves to come visit, and with over 300 days of sunshine per year, it’s hard to ever want to leave!

Now, imagine living in your home mortgage free, or enjoying monthly proceeds for life, both scenarios benefiting from the years you’ve invested in your home. A reverse mortgage is a unique tool designed for seniors 62 and older regardless of income or credit. You enjoy access to part of the equity in your home and the freedom and comfort of the home you’ve known for so many years. It’s your home, now you can put it to work for you.

Continue reading “How Reverse Mortgage Works in Fort Collins, CO” →

Fulfilling Dreams with Reverse Mortgage in Fort Collins, CO

Posted on July 9, 2013July 9, 2013 by janjordan

I recently ran across a hard hitting article titled “Do I Have to Die Early to Avoid Poverty?”. What a powerful title. But the truth is, I meet people everyday who are forced to ask this questions of themselves. Our whole lives, we work hard, raise a family, save for retirement, hope we’re blessed enough to watch our grandchildren and even our great-grandchildren grow – but then for many, as we age, the thought of funds running out before we die becomes a looming worry. Often, regardless of strategic retirement planning, the elderly live on a strict budget with monthly allotments of funds and will have calculated that based on the age they will likely pass away. But what if they are lucky enough to live beyond these projections?

Using reverse mortgage as a retirement planning tool can make a world of difference for those wishing to live fulfilling lives and not face the scenario described above. Sometimes this looks as simple as supplementing income to make sure everyone is comfortable throughout the golden years. Other times it means drawing from reverse mortgage in a lump sum with the desire to spend it on family while the borrower is still alive and can reap the personal rewards, instead of waiting until after they’ve passed to distribute inheritance. Other times it can be the lifeline to prevent savings from running out and fearing ending up in poverty if they’re blessed enough to live a long life.

Reverse mortgage is available to homeowners (single, widowed, or married) 62 and over regardless of income or credit. Funds can be distributed monthly or in a lump sum – and can be used for any purpose the borrower sees fit. Reverse mortgages are also more frequently being utilized as a retirement or financial planning tool as planners are working with reputable lenders to ensure their clients are fully informed of their options.

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.