Tag: windsor

FAQ’s about Reverse Mortgage for Purchase

Posted on by janjordan

reverse mortgage colorado fort collins loveland

 

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.

 

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.

How to Purchase a Home with Reverse Mortgage

Posted on by janjordan
Colorado Reverse Mortgage
Colorado Reverse Mortgage

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.

 

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.

Summer Vacation, Adult Children, and Reverse Mortgage

Posted on by janjordan

reverse mortgage colorado fort collins loveland greeleyAs 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:

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How Reverse Mortgage Works in Fort Collins, CO

Posted on by janjordan

reverse mortgage colorado loveland fort collinsThe 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.

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Fulfilling Dreams with Reverse Mortgage in Fort Collins, CO

Posted on by janjordan

Reverse Mortgage Colorado Fort Collins Loveland Windsor Longmont GreeleyI 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.

 

Reverse Mortgage a Lifeline for Seniors with Modest Means in Loveland Colorado

Posted on by janjordan

Reverse Mortgage Helping Seniors in Fort Collins Colorado Loveland Greeley

 

For many seniors in Loveland and Fort Collins, Colorado the federal reverse mortgage program is a proving to be a much needed lifeline.   Current statistics show that approximately 44% of reverse mortgage borrowers have incomes under 200% of the federal poverty level, or less than $22,980 per year for a single individual.  Unfortunately, as the cost of living increases, the elderly are often hit the hardest – some barely scraping by.  Many reverse mortgage borrowers are using funds to supplement their monthly income allowing them to enjoy a more comfortable lifestyle during retirement and as they age.  Other common uses for reverse mortgage funds are planning ahead for emergencies or to pay for medical costs.

 

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How Reverse Mortgage is Helping the Baby Boomers

Posted on by janjordan

Reverse Mortgage Colorado Fort Collins Loveland GreeleyWhile the “baby boomer” generation inches towards retirement, the economy in many areas is still rather dismal.  Many took major losses in the 2008 economic meltdown, losing their hopes for a prosperous retirement.  In situations such as this, reverse mortgage is becoming an important piece of retirement planning.  Seniors, 62 years and older and regardless of income or credit, now have the ability to fund their retirement using the equity in their homes, alleviating mortgage payments, and receiving either a lump sum or monthly pay-outs as long as the borrower(s) remain in the residence.  For many, this option makes a world of difference, allowing for the sought after prosperous retirement years instead of barely scraping by on a budget.  Reverse mortgage funds can be used for any purpose the borrower chooses, and is often used to help with every day expenses or long term medical costs.

 

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Finding a Reverse Mortgage Lender

Posted on by janjordan

reverse mortgage colorado fort collins loveland greeley

 

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.  There are no income, credit, or medical requirements.  In general, the older the borrower (or the youngest borrower in the case of 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.

 
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Understanding Elder Law

Posted on by janjordan

Reverse Mortgage Colorado Fort Collins Greeley LovelandElder law is a relatively unknown segment of law and is often overlooked when seeking legal solutions.  But for some seniors and their families an elder law attorney may be exactly what they need.  Elder law is very broad and includes things like estate planning, probate, guardianship, real estate, nursing home neglect and a dozen other areas of law that affect the elderly. Typically one lawyer will not have expertise in every area, but will instead work with a network of attorneys who can supplement in specific areas when needed and vice versa.  Also, keep in mind just because an individual is elderly does not mean they need an elder law attorney.  Elder law is focused on legal problems specific to the elderly.  Concerns with other areas of law may best be handled by attorneys dedicated to those areas.

 

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Reverse Mortgages Helping the Eldery Age at Home

Posted on by janjordan

Reverse Mortgage Colorado Fort Collins Loveland Berthoud Greeley WindsorAs traditional forms of elder care continue to be overshadowed by numerous other options, reverse mortgage is often helping senior individuals stay in their homes while they age.  Since reverse mortgages can open up opportunity to turn home equity into liquid cash, without having to move or make a mortgage loan payment, seniors and their families are using this opportunity to pay for care that would otherwise not be covered by basic Medicare or Medicaid.

 

Traditionally, “long term” elder care takes place in a nursing home or assisted living facility.  Medicare or Medicaid will often cover these expenses. but there is little public assistance for “in-home care”, although it varies from state to state.  As economic woes lend to retirement fears, reverse mortgage is more commonly being utilized for what it can do best, provide security for those most in need and offer a longer-term lifeline without disrupting the lives of the recipients.

 

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