Tag: reverse mortgage

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. 

5 Reverse Mortgage Myths

Posted on by janjordan
Fact or Fiction?

Myth #1:

  • You lose your home
Fact: 
  • You retain the title to your home
Myth #2: 
  • It’s only for broke people
Fact:
  • Many retirees use reverse mortgage
Myth #3:
  • It’s free money
Fact: 
  • It’s a specialized loan
Myth #4:
  • My equity is safe
Fact: 
  • Your equity is subject to the housing market
Myth #5:
  • It’s not a safe program
Fact: 
  • FHA insured reverse mortgages are fully guaranteed

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 EXACTLY is a Reverse Mortgage?

Posted on by janjordan
What is a reverse mortgage?

Imagine living in your home mortgage free, or enjoying monthly proceeds for life benefiting from the years you’ve invested in your home. A reverse mortgage is a unique tool designed for seniors 62 and older. 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.

 

Reverse mortgage borrowers retain ownership and title to their home. It’s yours just as it was before, but now you can benefit from the equity that’s been building in your home for years. In addition, HECM reverse mortgage loans give you the peace of mind of a government guaranteed FHA backed loan where you will never owe more than the home is worth. You can get a reverse mortgage on your primary residence and no repayment is due until the last borrower passes away or permanently leaves the home.

 

As a protection all those seeking a reverse mortgage are required to obtain HUD counseling (from an independent third party) prior to incurring any costs associated with the loan. While proceeds from a reverse mortgage are not subject to personal income taxation, borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal.

 

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. 

Understanding a Reverse Mortgage

Posted on by janjordan
Do I Qualify?

Are you wondering if you or someone you love may qualify for a reverse mortgage and how the process works?  Here are some fast facts to help. Reverse mortgages are available to many homeowners and retirees looking to make a lifestyle change.

 
Do I qualify?

  • Age 62 or older
  • The home you own must be your primary residence
  • Have enough equity in the home to pay off existing mortgage (if applicable)

How much money can I receive?

  • The older you are the more money you can receive with the calculation is based on the age of the youngest borrower
  • The amount you can receive is based partly on the appraised value of your home
  • The current interest rate will also be a factor in the amount of money you can receive with interest rates changing weekly

How do I receive the money?

  • Fixed monthly payments
  • Lump sum payment
  • Line of credit
  • A combination of the options above

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.