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Taxes and your Reverse Mortgage

Posted on March 20, 2014June 17, 2014 by janjordan

Spring has sprung in Northern Colorado again! That’s the good news. The bad news is this also means it’s tax time. It’s common during this time of year for me to receive a few questions regarding taxes and reverse mortgage – from both those considering a reverse mortgage, and those who already have a reverse mortgage.

Here are the two most common:

Are the funds from my reverse mortgage considered taxable income?

No. Because the funds received from a reverse mortgage are technically an advance on a loan, any payments or lump sums received are not taxable income, meaning they do not need to be reported on a tax return as such. They also typically do not affect Social Security or Medicare payments.

Is the interest from my loan deductible?

No. Because reverse mortgage holders do not make monthly mortgage payments and typically the interest is not paid until the loan is paid in full, the interest from a reverse mortgage loan is not deductible on a tax return. This is also the case with a reverse mortgage for purchase loan.

FHA insured reverse mortgages are available to homeowners 62 and older with no credit or income requirements. These loans allow the borrower to live mortgage payment free and receive their loan payment in one lump sum or in monthly installments. All borrowers are required to participate in third party counseling to ensure all their questions are adequately answered before making a decision. Reverse mortgages are also available to purchase a new residence.

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.

3 Things to Do with a Reverse Mortgage in Colorado

Posted on March 10, 2014June 17, 2014 by janjordan

One of the best parts of a reverse mortgage is the borrower(s) can do anything they’d like with the funds – while also living mortgage payment free. In Colorado, seniors are more active than ever, whether it be traveling, home improvements, or visiting with family and grandchildren often. As several Colorado cities always make the list of the best cities to retire (including Fort Collins & Loveland in this survey and Firestone, Parker & Louisville in this one) there couldn’t be a better time or place to enjoy life.

Here are 3 fulfilling options seniors are using their reverse mortgage funds for:

Take that trip they always dreamed of – After years of working hard, saving for retirement, and raising a family, some reverse mortgage borrowers are using a portion of their funds to take the bucket list vacation they’ve always dreamed of. This option becomes less probable as they age and makes for a fantastic celebration by the more active seniors.

Visit with loved ones – Whether it’s a sister who hasn’t visited in 10 years, or children and grandchildren, or long lost friends, using reverse mortgage funds to visit with loved ones is a very common today. Travel can be expensive and it holds us back far too often from the visits that mean the most to us, especially as we age.

Make home repairs or upgrades – After a life of caring for others, senior homeowners often find parts of their home may have been neglected. When using a reverse mortgage to tap into home equity without a subsequent loan payment borrowers often make those repairs or upgrades they have been longing for. Whether it’s a sunroom addition or a kitchen remodel, or just dutiful repairs, this is never a bad option.

Reverse mortgages are available to homeowners 62 and over with no income and credit requirements. This FHA insured loan offers funds through a lump sum or monthly installments and eliminates monthly mortgage payments. With many protections in place to ensure borrowers are adequately educated before using this option, such as required third-party counseling, reverse mortgages are gaining in popularity among retirees from all walks of life. And a reverse mortgage for purchase option is available for those looking to purchase a new residence.

NBC’s Today Show Discusses Reverse Mortgage

Posted on February 26, 2014June 17, 2014 by janjordan

In this great 4 minute video from NBC’s The Today Show, financial editor Jean Chatzky answers some common questions about reverse mortgage, how they work, and whom they are right for.

Touching on the issue of home inheritance she urges potential borrowers to ask the question: why are they so attached to their homes? An excellent first question to anyone who thinks a reverse mortgage may not fit their needs.

Reverse mortgages are available to homeowners 62 and older, with minimal income and credit requirements. A reverse mortgage for purchase is also an option for those looking to buy a new home or move from their current residence.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

Strong Home Sales Highlight Reverse Mortgage for Purchase

Posted on February 5, 2014June 17, 2014 by janjordan

As existing home sales rose in December of 2013, the year ended with the strongest sales since 2006, as reported by Realtor.org report. This is great news according to Lawrence Yun, NAR chief economist, who said housing has experienced a strong and encouraging recovery over the past two years.

“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” Yun said. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”

The national median existing-home price for all of 2013 was $197,100, which is 11.5 percent above the 2012 median of $176,800.

What does this mean for reverse mortgages? Well, it may mean it’s the perfect time to consider a reverse mortgage for purchase. Here’s how the program works:

For seniors 62 and over, with minimal credit and income requirements, home buyers are able to use reverse mortgage to purchase a new home. The amount of the down payment required from the buyer will depend on the amount of the home they are purchasing. But unlike a conventional loan, not only will the lender provide the funds to make up the difference between the home price and the down payment, the new home owners will also be able to live mortgage payment free for as long as they remain in the home.

There are two scenarios that may signal the time is right for you to consider a reverse mortgage for purchase. Such as:

Possibly you’re looking to sell your existing home and move to a community or house that better fits your needs? With the strength in the housing market and thinning inventory, this could be a great time to consider selling your current home. And with a reverse mortgage for purchase, there are options that allow you to purchase while the current home is still for sale.

And of course, if purchasing a new home is your only goal, jumping in as a buyer before the market becomes overly competitive and home prices rise, usually proves to be beneficial. And not only will the reverse mortgage supplement the existing proceeds when making the purchase, it can also mean the buyer will not need to drain all of their funds, freeing income up for other things – such as medical bills, in home care, or even vacations.

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.

How to Alleviate HELOC Payment Shock with Reverse Mortgage

Posted on January 27, 2014June 17, 2014 by janjordan

At the peak of the housing boom thousands of Loveland and Fort Collins homeowners tapped into their biggest asset – their home – and took out a home equity line of credit or a HELOC. Many of these loans are set to amortize after 10 years, meaning these borrowers are about to see some serious payment shock as their loans readjust and their payments now include interest and principal. The Office of Comptroller of the Currency estimates that 60% of all HELOC balances will start amortizing between 2014 and 2017, and resetting to higher payments could cause a jump in delinquencies. In addition, analysts at Moody’s Investor Services are warning banks of impending losses, worrying this situation may prove problematic, just as payment adjustments during the 2008 housing crisis did.

For retirees already living on a fixed income, borrowers may scramble to make these adjustments fit into their budgets. But homeowners 62 and over have another option – reverse mortgage. With a reverse mortgage seniors have the ability to not only alleviate any impending HELOC payment shock but also live mortgage payment free throughout retirement – all with minimal income and credit requirements. Once a homeowner has obtained a reverse mortgage, they are able to receive their funds in a one-time lump sum or as monthly payments made directly to them.

This scenario is also something to consider for homeowners currently considering a HELOC to make home repairs or improvements. Considering the difference between a home equity loan and a reverse mortgage is important when developing a long term plan. Learn more about HELOC vs Reverse Mortgage 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.

Can a Reverse Mortgage Help a Loved One this Holiday Season?

Posted on December 11, 2013December 11, 2013 by janjordan

This time of year is often one of insight for adult children as they travel to visit their elderly parents or loved ones. Of course, these special visits are filled with a sense of joy and love. Catching up, reminiscing about old times, visiting with grand children. But it can also be a time filled with anxiety and worry – especially if aging loved ones are having difficulties in their current home – sometimes more so than previously realized. Questions will arise about their future; questions surrounding their long-term needs and their ability to meet them in the current situation.

In order to better sort through these thoughts, here are a few questions to ponder:

• 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 the answers to these questions, aging in place may be an option. If there are financial strains and they wish to stay in their current home, a traditional reverse mortgage may help alleviate financial worries or even provide funds for in home care. If the current home does not seem to be appropriate long term – whether due to location, stairs, or needed repairs – a reverse mortgage for purchase may allow them to purchase a new home that is more suitable to their needs or closer to family. Both reverse mortgage options are available to 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. Click here to contact Jan and learn if reverse mortgage is right for you.

Reverse Mortgage Changes Opens Doors of Opportunity

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

Since the reverse mortgage industry saw big changes earlier this year, financial planners, retirement specialists, and lenders are collaborating more than ever before. In an effort to ensure these revisions are thoroughly understood and appropriate solutions are offered to clients, a strong relationship between professionals is vitally important.

Because of these newly developed relationships, it appears a wonderful shift is taking place. Reverse mortgage, once stereotyped as a product for poverty stricken widows or the like, is now being realized as a product of opportunity. More and more we’re seeing affluent and middle class retirees utilizing this option to provide financial stability and financial freedom throughout retirement. The industry has only begun to scratch the surface of those who would benefit or will discover the possibilities when tying a reverse mortgage into their retirement plans.

This paradigm shift will likely increase knowledge across the board regarding both traditional reverse mortgage loans and the reverse mortgage for purchase program. Both products are available for seniors 62 and over, with minimal income and credit requirements.

If you have any questions regarding the changes that have taken place surrounding the reverse mortgage industry in Colorado, please don’t hesitate to contact me.

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 and the Housing Supply

Posted on November 18, 2013June 17, 2014 by janjordan

With the baby boomer generation coming of age, we’re seeing a noticeable shift in how seniors exist in today’s society. No longer are the days of nursing homes and wheelchairs, or moving in with adult children. Many of today’s seniors are more independent than ever before, outliving the elderly of yesterday by leaps and bounds. But this trend is creating a new scenario across the United States – demand for independent, affordable, and accessible housing. According to the Census Bureau stats, the population of Americans over age 65 increased by about five million between 2000 and 2010 and over the next 20 years, the aging of the Baby Boom generation will cause the senior population to grow by 30 million!

Although many face challenges to some degree, most elderly Americans want to remain in their home. Those who feel the need to move, still prefer to remain in an independent residence, usually just closer to family or without stairs. And senior housing communities are gaining in popularity for socially active retirees who thrive in a community situation. The options are vast – and will continue to expand as the demographic does.

Reverse mortgage is an accessible and viable option for many of these seniors aged 62 and older, and with minimal income and credit requirements. A reverse mortgage can be used to stay in a current home throughout the aging years while living mortgage payment free – OR – can be used to purchase a new home and still live mortgage payment free. As seniors take control of their housing situation and become more proactive about their futures, they will find an opportunity exists to ensure a financially stable future, while maintaining their independence, health, and dignity.

To learn more about obtaining a reverse mortgage on your current home, click here. And to learn about using a reverse mortgage to purchase a new home, click 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.

Reverse Mortgage Boosts Cash Home Buyers

Posted on November 3, 2013June 17, 2014 by janjordan

In this day and age, buying a home with cash is rare. And not because of the reasons you may think – such as who has that much cash nowadays? Well, that is part of the reason, but it’s a little more complicated than that. Those who have a substantial amount of cash are finding there are no homes available in their price range and suddenly they don’t have enough cash to be a true “cash buyer”. This diminishes their hopes of living mortgage payment free. For example, if a retired couple sells their home or allots other funds amounting to $170,000 for a new home, they will suddenly be facing a new dilemma – finding a home to meet their needs, that doesn’t need repairs, and is in the community they wish to live. With home prices quickly recovering in the Loveland and Fort Collins area, this scenario is playing out ever more often.

This is where the Reverse Mortgage for Purchase program can provide a solution. Not only will the program add funds to the buyer’s available cash making up the difference needed to purchase an appropriate home, it will also allow that buyer to live mortgage payment free.

Here’s how it works:

Click here to learn more about the Reverse Mortgage for Purchase program (aka HECM for Purhcase).

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 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.