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Breaking Down the Reverse Mortgage Home Appraisal

Posted on August 24, 2016January 2, 2017 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 are not only very helpful for everyone involved, they’re required by the lender. Part of what determines the amount of funding available from a reverse mortgage is the appraised value of the home. Luckily the process is very simple.

First, after talking with a reputable reverse mortgage specialist, you will submit your application. The specialist or 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. Read my article about preparing your home for an appraisal by clicking here.

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 in the many scenarios that are possible and the two of you can think creatively about 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. Click here to contact Jan and learn if reverse mortgage is right for you.

The 7 Worst Myths Surrounding Reverse Mortgage in Colorado

Posted on August 10, 2016August 19, 2016 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 a reverse mortgage is and what it 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.

Tips to Visualizing and Planning Your Retirement

Posted on August 3, 2016August 19, 2016 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 commonly now spans up to twenty 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.

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.

How to Sell a Home that has an Existing Reverse Mortgage

Posted on July 27, 2016August 2, 2016 by janjordan

Typically when a senior takes out a reverse mortgage loan on a home, they intend to age there. But on occasion and for various reasons, the homeowners wants to or needs to sell the home before the loan comes due and payable. So, what now?

Although this is an important factor, it’s not nearly as daunting as it sounds. Here’s where to start:

Step 1.) Locate your reverse mortgage loan documents and find any pertinent information regarding the sale of the home. It will vary from lender to lender. Most (but not all) reverse mortgage loans are FHA insured. This means even if you owe more on the loan than the home is worth, you will never owe more than the home sells for. Consult with a real estate or elder law attorney if you have questions or concerns.

Step 2.) Contact the reverse mortgage lender to get a payoff quote. This combined with a home appraisal will give you a good idea of what the sale will look like and what amount of funds you could potentially walk away with.

Step 3.) Find a real estate agent. When seeking out an agent, be sure to provide your reverse mortgage loan information up front and look for someone who has experience with such a sale.

Step 4.) Prepare the home for sale. From here, everything is similar to any home sale. You want to prep the home, keep it clean for showings, update anything you may need, etc.

Step 5.) Sell the home, pay off the reverse mortgage loan (consult with a real estate or elder law attorney if you have questions when paying off the loan), then reap the rewards. Congrats!
Reverse mortgages are available to seniors 62 and over all over Colorado. To learn more, contact a reputable reverse mortgage lender.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

What Exactly is a Reverse Mortgage Line of Credit?

Posted on July 20, 2016August 1, 2016 by janjordan

Reverse mortgages aren’t new, but the shifting perspective on them certainly is. After undergoing various regulation changes the past couple years, everyone is taking a second look. Real estate agents are seeking more information on the Reverse Mortgage for Purchase so they can offer this option to their senior buyers. Adult children are realizing the myths they’d heard over the years are just that – myths. And now retirement experts are suggesting adding home equity into the equation when helping retirees plan for their golden years.

Reverse mortgages are very versatile when it comes to ways to access funds, but this article is going to focus on one that is quickly gaining in popularity – the Reverse Mortgage Line of Credit.

What is a Reverse Mortgage Line of Credit?

The line of credit option allows homeowners to tap into the equity of their home and have access to the funds whenever needed, but unlike a lump sum or monthly payments, they don’t have to withdraw any funds at all and can keep it as a safety net. Or the funds can be used when needed to supplement retirement income. The options are endless.

How is the amount on a line of credit determined?

Just like all reverse mortgages, the amount is determined based on the age of the borrower and the appraised value of the home. The older the borrower and the more the home is worth, the larger the line of credit will initially be. Borrowers also are not required to use all the available equity in their home as the line of credit, and they have options to combine it with other funding sources such as monthly installments or even a home purchase.

Will the line of credit funding amount ever change?

Yes and no. Unlike other reverse mortgage funding options, a line of credit will increase at a compounding rate determine by HUD – and on the flip side, it will never decrease even if home values depreciate.

Why get a Line of Credit now rather than wait until I’m sure I need it?

Retirement experts are recommending to many clients to include the reverse mortgage line of credit in their retirement portfolios from the get-go for various reasons. One, the housing market is strong right now and appraised home values are high. Two, as the years go on, these programs change and it may not be available in 10 years, but anyone who has an already established line of credit will always be ‘grandfathered’ into the program, even if it is eliminated in the future. And three, in the case of economic downturn where investments are affected, having the line of credit immediately available can be a future safety net.

Is a Reverse Mortgage Line of Credit FHA Insured?

Typically yes, as long you are working with a reputable reverse mortgage lender, the line of credit will be FHA insured just like any other reverse mortgage product. This means there are protections and guarantees in place for the borrower that will never falter.

Reverse mortgage are available to seniors 62 and over throughout Colorado and Wyoming.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

5 Interesting Facts About Reverse Mortgages

Posted on July 16, 2016August 1, 2016 by janjordan

Reverse mortgages have made a serious comeback in the past couple years. After regulation changes were enacted in 2015, the reverse mortgage loan once considered a desperate lifeline is now being used as a retirement tool for even the wealthy. The loans are still only available to seniors 62 and older (including married couples) with the amount of funds available increasing depending on age and appraised value of the home, but now those funds are often being accessed in ways not available before – such as a line of credit or to purchase a home. This really is not your mother’s reverse mortgage, it’s something much more versatile than it was years ago.

Here are some lesser known facts about today’s reverse mortgage:

1.) I’ve said it before and I’ll say it again – the borrower will always remain the homeowner as long as basic responsibilities such as property taxes are paid, homeowners insurance is kept current, and utilities and HOA fees are paid. One of reverse mortgage’s scariest myths has always been that a bank will own the home. This couldn’t be further from the truth. Not only will the borrower remain the homeowner, they will also retain the title.

2.) There are NO mortgage or loan payments. That’s correct. Regardless of how the borrower decides to utilize the reverse mortgage funds, they will not pay a loan or mortgage payment while they remain in the home.

3.) With a Reverse Mortgage for Purchase, borrowers can wrap both the home purchase and the reverse mortgage into the same transaction allowing them to buy their dream home – AND the reverse mortgage will substantially supplement purchasing power allowing a home to be purchased that may have once been out of their price range. When using a Reverse Mortgage for Purchase, the borrower is required to provide some down payment and the reverse mortgage funds will make up the rest of the purchase price.

4.) Married couples can both be on the loan regardless of how the funds are utilized. Another all too common myth is that in the case of a married couple, if one spouse passes away the other spouse will be evicted. When working with a reputable reverse mortgage lender this should never happen. As long as both spouses are 62 or over, they can both be on the loan allowing either borrower to stay in the home until the last spouses passes away or permanently leaves the home.

5.) Heirs are not “saddled” with the debt of a reverse mortgage. After the borrower(s) pass away, there are several options as to what the heirs can do with the home. And in today’s hot housing market, the home may gain equity that can be available to the heirs. Most all reverse mortgages are FHA insured meaning the loan will never exceed the amount of the home sale – even if more is owed, and it also means it will only ever require the amount of the loan even if the home is worth much more when it comes due.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

How to Find a Reputable Reverse Mortgage Lender in Colorado

Posted on July 6, 2016July 25, 2016 by janjordan

For many seniors, a reverse mortgage is a feasible option to living within a budget, without the constraints and worry of excessive financial distress. In order to qualify for a reverse mortgage, the individual must own their home, be at least 62 years old, and have some equity in the home. Funds from a reverse mortgage can be accessed in various ways including a line of credit, monthly installments, a lump sum, and they can even be used to purchase a new home. In general, the older the borrower (or the youngest borrower in the case of married couples) and the more valuable the home, the more money available. Other factors also come into play, such as: the appraised home value, interest rates, and the amount of equity in the home. Once a basic understanding of how a reverse mortgage works, the next step is finding a lender.

Where to find a lender?

Reverse mortgages are marketed in every possible way. Television, radio, mailers, internet, etc. Although not all of these methods ensure trouble, some of them can be scams. When seeking a reverse mortgage lender, it’s important to speak with people you trust. Ask around at your bank or financial institution. Speak with a financial or retirement adviser. Talk with neighbors or friends who have utilized a reverse mortgage. Seek information from the local Chamber of Commerce or Better Business Bureau. Utilize other resources that may be available in your community.

What to look for in a reverse mortgage lender?

Working with a reputable reverse mortgage lender is critical. The reverse mortgage industry is riddled with scams and flashy sales. It can be risky to get involved with a lender who does not offer all the details or who is just looking to make a “quick sell”. A reputable lender will have strong connections in the community, working closely with a network of professional organizations.

Accreditations and ratings?

Seek out a lender that is a member of the National Reverse Mortgage Lenders Association (NRMLA). Members of the NRMLA must conform to a strict code of lending ethic. Look for a lender that is affiliated with the Better Business Bureau (BBB), where you can also learn of any complaints against the company.

Follow your gut.

When it comes down to it, always follow your gut. Just because a lender may meet all this criteria doesn’t mean they will be right for you. If you do not feel comfortable or feel your questions are not being adequately answered, there is nothing wrong with seeking out a different lender.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

Delay Social Security Benefits with a Reverse Mortgage

Posted on February 24, 2016April 19, 2016 by janjordan

When planning for retirement, there will no doubt be a discussion about when a retiree should start taking their Social Security benefits.

There are perks to delaying, for example Social Security benefits stand to increase as much as 7-8% per year if you don’t apply until age 70. But many seniors need this income. With the ability to apply for a reverse mortgage at the age of 62, and current low interest rates, retirees stand to actually make gains by using a reverse mortgage to supplement while delaying benefits.

When approved for a reverse mortgage, the borrower can choose from a variety of ways to access the funds. It could be a monthly installment, a lump sum, or even a line of credit that in itself stands to grow over time.

This is a creative way to use the hard earned equity in your home to your benefit. A well educated financial advisor would easily be able to help you decide if this is a good option. Reverse mortgages are available to seniors 62 and over, including married couples, with an approved type of home. The borrower will always retain the title to the home and reverse mortgages are insured by the FHA.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

What is an FHA Insured Reverse Mortgage Loan?

Posted on December 4, 2015May 16, 2017 by janjordan

If you’ve taken the time to learn even a little bit about a reverse mortgage, it’s likely you’ve heard the term “FHA insured” at least a couple of times. But what exactly does it mean?

Homeowners 62 and over, with significant equity in their home, may be eligible for a reverse mortgage. These loans are typically insured by the FHA and provide non-taxable income to the borrowers based on the available equity in the home. The more equity and the older the borrower, the more funds available. The funds can be accessed via a line of credit, monthly installments, a lump sum, and even can be wrapped into the purchase of a new home. The borrower can always use the funds for whatever they deem fit.

The homeowner will live mortgage payment free for as long as they remain in the home, although they will have a few financial obligations related to the house such as homeowners insurance, property taxes, utilities, and HOA fees. As long as the borrowers keeps current on these few obligations, they cannot be evicted from the home or made to repay the loan. The loan comes due once the last borrower has left the home for 12 consecutive months or passes away. At this time the loan will be due and payable with time allotted to allow for transitions. This is where the FHA insurance comes in.

In the case of a death, the home with pass onto the heirs. At this time they have two options – 1) Pay off the loan and keep the home (often through life insurance or sale of another asset), or 2) Sell the home.

In the scenario of loan repayment the heirs will never have to repay any more than the home is appraised for. They will only be required to pay 95% of the appraised home value or the full amount of the loan, whichever is less. Any amount due on the loan above the appraised amount will be covered by the FHA insurance and no one will be held liable.

In the case of a home sale, the heirs will never be required to pay more on the loan than the home sells for as long as the sale price is at least 95% of the appraised value. Any remaining balance will be covered by the FHA insurance. On the other hand, if the home sells for more than the loan balance, the heirs will keep any remaining funds. This is especially important as over the years the housing market shifts.

Jan Jordan Reverse Mortgage Info for Fort Collins, Loveland, Greeley, and Front Range areas of Colorado.

A Hidden Gem – Reverse Mortgage for Purchase

Posted on August 5, 2015August 18, 2015 by janjordan

Nearly everyone is familiar with a Reverse Mortgage and many even know someone who has used one to increase cash flow or help them remain in their existing home. But what many people don’t realize is that you can also use one to purchase a home. This little known portion of the reverse mortgage program, called Reverse Mortgage (HECM) for Purchase, is a golden gem to many seniors who are looking to settle down somewhere other than their current home for retirement. Whether looking to move closer to family, purchase a single level home, or move into a senior community, these homebuyers are able to purchase a home they often wouldn’t be able to afford otherwise while still eliminating mortgage payments – all in a single transaction.

To qualify, the borrower(s) must be 62 years or older, be purchasing an eligible property, have the required down payment, and meet the HECM financial assessment guidelines. Eligible property types are single family residences, new construction where certificate of occupancy has been issued, HUD approved condos and townhomes. Allowable down payment sources include cash from savings or investments, proceeds from the sale of an existing home or asset, gifts. Funds that are borrowed such as a loan or credit cards are not allowed as a funding source. The amount of the down payment varies depending on the age of the youngest borrowers and the cost of the new home.

Working with an educated real estate agent and reverse mortgage specialist will expedite the process, and in most cases in a Reverse Mortgage for Purchase does not take longer to complete than a typical home purchase with a traditional loan.

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.