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Crisis in Retirement

Posted on July 22, 2015July 22, 2015 by janjordan

It is unfortunately not surprising, but more than half of Americans have less than $10,000 in savings. Most coming to retirement age these days do not even have the resources to cover the living expenses and health care costs if they were to leave their jobs. Is retirement only for the rich?

The numbers have been tabulated, and right now there is a gap between pensions and retirement savings for those in these golden years that is more than 6.5 trillion dollars! (This is according to the Center for Retirement Research at Boston College.) Many will be unable to maintain their current standard of living during retirement, let alone live the retirement they once dreamed of.
Millions of seniors live in poverty and the percentage is growing, expected to increase more than 30% by 2020. This trend is a concern not only for the ones retiring but for their families as well. And the overall effect upon society means we are in crisis to provide for our own after they have given their lives working in our country.

Reverse mortgage can be an effective means for seniors 62 and older to rise to their personal need and create a stream of resource that will allow them to comfortably stay in their home – or provide for specific needs, such as medical care. The concept of a reverse mortgage is to use the equity of the home and turn it into liquid cash in the form of monthly payments, a line of credit, a lump sum, and even to purchase a new home. The assistance is well deserved since the equity of the home rightly belongs to the borrower, but unlike a Home Equity Loan, with a reverse mortgage there are no monthly loan payments. And the homeowner retains the title to the home. Once only considered a lifeline for destitute seniors, reverse mortgage is proving to be an excellent tool when used as part of a retirement planning strategy and is making a world of difference for retirees.

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.

Reverse Mortgage Questions Answered for Adult Children

Posted on June 17, 2015 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 Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Contact Jan and learn if reverse mortgage is right for you.

A Reverse Mortgage Appraisal – The Facts

Posted on May 14, 2015 by janjordan

Getting assessments on just about anything can seem laborious or tedious, who wants to have something close to them looked at with a magnifying glass? But appraisals for reverse mortgage loans can be very helpful for you because they lay down where you are in equity. In fact they are required. The process is very simple.

First, after talking with a reputable reverse mortgage specialist, you will submit your application. The lender will be the one to contact an appraiser who will in turn contact you to set up a time for them to look at your home.

The procedure is standard and involves three steps, the inspection, the research, and the report.

Inspection:

The appraiser will walk through your home with you, he or she might take photographs. It will document features that add value to your home. If the appraiser takes a picture of something in need of repair it lets you know that it matters and gives you a chance to fix it.

Research:

Once the walk through is done, the appraiser’s work continues as they research factors that influence the value they place on your home. Home sales in your area are one area of research. Others include multiple listing services, tax assessor’s records and public records come into play. Anything that will help to give the present value will be taken into account.

The Official Report:

This is the synthesis of the appraiser’s home visit and all the research. The report is used with your loan request. If photographs were taken, they will be included as well.

The appraiser gives this report to the lender who will give you a copy and an updated reverse mortgage figures taking into account the new information.

There are simple things you can do before the appraiser gets to your home to help your loan request. Coming in the next article.

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.

Unraveling The Myths Around Reverse Mortgage

Posted on April 27, 2015 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 reverse mortgage is and 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.

Taxes and a Reverse Mortgage in Colorado

Posted on April 1, 2015 by janjordan

Spring has sprung in Fort Collins and Loveland 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 until April 27th, 2015 (at this time some changes will take place to the qualifying process). 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.

Reverse Mortgage in Colorado – Points to Know

Posted on February 25, 2015 by janjordan

The Reverse Mortgage, created to aid the realization of retirees dreams, will be in your face if you have approached, or are approaching, the eligible age of 62. As with the all special offers across Colorado, marketing can promote it in such a way as to allure you – or to terrify you.

There are a number of points to know when you begin to learn about reverse mortgage. These are simple facts and not marketing strategies.

First of all, married couples can both be on the reverse mortgage loan if they are both over the age of 62. This means when one dies, the other can continue living in the home under the same agreement. No changes happen just because both are not alive, giving the one remaining a true security as they navigate through the transition of losing their life partner.

Second, at this time the loan is not dependant on credit score or income. There are simple eligibility requirements: the borrower must be 62 or older, the residence must be their primary residence, and the home must meet HUD guidelines.

Third, there are NO monthly mortgage payments. So long as the borrower(s) remain in the home as their primary residence, their only financial responsibilities are the homeowner’s insurance, HOA payments, property taxes and basic upkeep/utilities.

Fourth, funds from a reverse mortgage will not affect Social Security, Medicare or pensions because they are considered “tax free” income.

And the title of your home stays in your name, there is not a transfer of ownership just because you drew upon the equity of your personal asset.

Last, you could even use a reverse mortgage to buy a new home via the Reverse Mortgage for Purchase program. This a great option for those who wish to be close to family, in a desired location or have a place that fits your new lifestyle.

These are dependable facts to help you sift through all the marketing and information that will come your way.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Longmont, 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.

Credit Lines Magnify Every Month with a Reverse Mortgage

Posted on February 17, 2015 by janjordan

With the varieties of opinions about reverse mortgages out in the marketplace a question comes up, that is, ‘would a reverse mortgage be a fall back, last resort, or would it be a positive option for a financial plan?’ While the answer lies in the hands of the borrower, or owner, there are worthy considerations to take into account.

Some, including financial planners, might label those choosing a reverse mortgage as poor planners, those that did not take the time or effort to look long at their future needs and desires and work that into a plan. Indeed, many who have sought financial planning around a reverse mortgage probably had not had a consult up until that point.

There are many reasons to consider a reverse mortgage in a forward moving plan, making the choice before it might be the only option available (though this is not bad either.) First of all, many coming into retirement are ready to downsize or move. Maybe they raised their children in a two story house in Illinois, and now do not need five bedrooms, or to weather the cold when their children and families are in clement areas such as Georgia or South Carolina. A reverse mortgage makes this possible.

The amount a reverse mortgage can be reaches a defined limit, taking into account the equity of the present home and the age of the borrower(s.) This limit can be used in multiple ways, it can go towards that downsized home, be a credit limit, can cover monthly payments for the rest of their lives, or can even be a lump sum the borrower receives immediately.

There are also other typical reverse mortgage scenarios.

For instance, as well as one might plan, life offers us unexpected events. A reverse mortgage is a respectable option when a family is in distress, many foreclosures have been avoided with the solid help of a reverse mortgage. And sometimes, when a family is not even in distress, they wish to take advantage of all their hard work, which is there in the form of the home they own, and have liquid resources instead of just equity that cannot be utilized. The ways a reverse mortgage can be brought into the questions of a plan are as unique as the personal life situations existing.

For seniors 62 and older, a reverse mortgage can objectively be considered as an alternative revenue option. This takes away the stigma sometimes attached to it as a choice that was the only option left, a fall back when it is really a move forward.

First a Vision, Then a Plan – Reverse Mortgage a viable option

Posted on January 27, 2015January 27, 2015 by janjordan

Life in our country continues to change and one major shift is our personal life span, we are all living much longer, ready to enjoy the latter years of our life after many years of work, much longer. Since retirement now spans up to thirty years and sometimes more, moving into life without steady work income requires a plan.

Before a plan, however, it is most helpful to create a vision. If your time for retirement is near or far, it can be efficacious to ask yourself questions now, even if you might change down the road.

What are some of your retirement desires? Where would you like to live? Near family? In warm weather? What type of lifestyle do you desire? Quiet and serene in nature yet near to a small town? Active community with lots of senior social events easily available to you? When you note your desires, you can then look into the practical implications of a plan to give you what will make you happy.

In addition to writing down your desires, ask yourself a few questions about the possible challenges and how you can meet them to stay on track. What could be additional costs down the road that could hinder your vision? Consider health care costs, the expected and the unexpected. How much is it going to cost to maintain your present home? What is your debt going to require down the road? Tally with honesty these costs so they can be a part of your plan up front.

Talk about money now. Erase the unspoken assumptions that exist between you, your spouse and/or your family. These types of conversations are not always easy, but they are always fruitful. Being clear with those we love can give everyone the gift of ease when the time for you to pass does arrive. Is inheritance part of the equation? Do your children want this? How do you and your spouse look at retirement and desires? Are your desires the same? For instance, you may want to travel (higher expense) and your spouse may want to spend long hours in their garden. When it comes to inheritance, they may have a different view, have you talked about it?

Even if all the details are not worked out, the lines of communication will be open and decisions can be made from a place of consideration for all, including yourself. Oftentimes the answers can be surprising when we ask questions and allow those we love to share freely.

Once you identify your vision, and look to a plan, you may discover that reverse mortgage can be foundational to achieving your dream. Created to aid those in our society having worked all their lives to have a time of true rest, a reverse mortgage gives access to equity in your home, value that is already yours. It could eliminate expenses that limit reaching your goals, help you move from one home to the home that fits your new lifestyle, and even give a sense of ease to those with limited incomes. It is certainly a tool worth considering for your retirement plan.

Unexpected benefits of Reverse Mortgage – Stay at home!

Posted on January 22, 2015January 22, 2015 by janjordan

As you grow older your needs of body, mind and heart change, sometimes requiring assistance. Have you even considered a reverse mortgage to help you with this assistance to stay in your home, instead of moving where that is provided like assisted living or nursing home?

This is a very possible option for those who wish to remain in the place where family memories are held, and familiar rooms hold personal furniture and mementos marking the years.

The average resident of a nursing home lives about four months, so short a time for this cherished time of life. With a little investigation by you, or by your loved ones, a number of other options could prove to be the best choice.

For one, home health care has grown exponentially over the years. Certified aides, care givers and nurses can come to you to meet your defined needs. Add in a bit of tender loving care from family and friends to balance home care, doctor’s appointments, therapy and all the rest and a second option presents itself. In addition to the one on one focus both these options provide are an endless stream of senior services such as meals on wheels, senior centers, day care assistance and many more falling under the umbrellas of social services.

A Reverse Mortgage could be an easy way to create the lifestyle you want, meeting your changing needs, right within your own home!

The first step would be to create a plan for your life of retirement. Set your vision for the future, naming long term health care providers, establishing the roles of family members, look at your resources (or seek professional counsel to assess costs of living for years to come,) and be honest about what needs you have now, and what needs you want to provide for in the future. Include the unexpected in your assessment so the stress of change is not compounded by lack of resources.

Once you make your plan, discuss it with all involved. If it makes sense include those helping you in your will so they can provide a line of continuity from their care for you, to the care of your estate and affairs once you pass.

Review your plan yearly so you have the security and freedom to change as you change. A reverse mortgage can not only provide you by covering your monthly expenses as you live mortgage payment free, but can also be included in the planning process increasing your options as you see how much you will receive from the equity of your home.

Nursing Homes, In-Home Care & Reverse Mortgage

Posted on October 13, 2014 by janjordan

To most, elderly and nursing homes go hand in hand. But did you know when speaking with elderly people, one of their biggest fears is being placed into a nursing home? And who can blame them? When considering the psyche of an older senior, nursing homes or convalescent homes mean “end of life”. Yet with advanced medicine and more active lifestyles, seniors are living far beyond their expectations.

Often, adult children don’t know what to do as the needs of the parents increase, the home is no longer suited for their parent, and they do not have the funds or the time for in home care. This is where reverse mortgage becomes a very important option.

Reverse mortgage is a great method to finance in-home care to avoid nursing homes, pay for medical care, or even fund home modifications. For seniors who are looking to situate long term and prepare to live their senior 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 a perfect option for these situations. Reverse Mortgage for Purchase allows the purchase of a new 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 – and the money is tax free.

Both Reverse Mortgage for Purchase and traditional Reverse Mortgages are available to seniors 62 and over, with no income or credit requirements. The borrower will live mortgage payment free, retain the title to the home, and will never be forced to leave. Just as with a home owned free and clear, the homeowner will still be responsible for property taxes, homeowners insurance, HOA fees, utilities, and general upkeep. Even married couples can both be on a reverse mortgage and the loan doesn’t come due until the last borrower permanently leaves the home.