Home for the Holidays…Creating A Wonderful Life for your Older Loved Ones

Home for the Holidays, Staying at homeWith the families gathering for the holidays now is a good time to discuss memories, dreams and desires with our senior loved ones.  One of the most important things to keep in mind is having an understanding of the senior and considering what they want.  As George Santavana stated, “Before you contradict an old man, my fair friend, you should endeavor to understand him.”

Our seniors are valuable to our families and to our society.  They are not just a potted plant in the corner that looks beautiful.  They bring experience, knowledge, history and a sense of who we are.  They have and continue to contribute to our world.  While we treasure other things that are old, we often discount our senior’s opinions, needs and desires.

Sister Mary Germma Brunke wrote, “It is the old apple trees that are decked with the loveliest blossoms. It is the ancient redwoods that rise to majestic heights.  It is the aged wine that tastes the sweetest.  It is ancient coins, stamps and furniture that people seek. It is the old friends that are loved the best.  Thank God for the blessings of age and the wisdom, patience and maturity that go with it.  Old is wonderful!”

Remaining at home with a Reverse MortgageHow can we help make “old” wonderful?  As you are visiting with your loved ones ask them what they remember about moving into the house they first purchased, what they like about the neighborhood.  How do they feel about where they are living now.  Have them share memories of their friends from their youth and what they treasure about the friends in their life now.  What do they cherish?  What has value to them?  What’s important to them?

Have your loved ones define security and find out what gives this security to them.  From their viewpoint what does it mean to be independent?  How do they define dignity in their life?  What do they need to feel they still have control and choices in their life?

Listen to them without making judgments.  If they repeat the same story several times, look at it as a process or stage they are going through.  It doesn’t mean they have dementia, it may just mean that something about that time in their life has a significant impact on their life.  Find out the details of that time of their life and what it means to them now.

There’s a wonderful book by David Solie, M.S., P.A., “How to Say It To Seniors: Closing the Communication Gap with Our Elders” that provides insight into understanding and gives great suggestions on how to have the discussions with your loved ones.

Discuss memories of being in their homeAs you listen to the answers of your loved ones are you discovering that they want to stay in their home?  Are they struggling financially?  Do you need a little extra help with chores or getting out to church or visiting with friends or going to a movie?  Do they need some physical therapy to help be able to do what they desire?  Is nutrition and meals a concern?  Would assistance in bathing be helpful?  Would some medical equipment help them remain at home more comfortably?

There are many options available to help seniors meet their needs and desires.  If they want to stay in their home and need some extra cash, consider a reverse mortgage.  If they want to move to a home closer to you or to downsize, consider using a reverse mortgage for the financing.  If they need some extra help, a home care agency can help them.  Home care agencies provide companion services, meal preparation, medication reminders, bathing and skilled care.  Physical therapy can be brought into the home.  Adult Day Services are an often overlooked option.  And if the family dynamics come into play, a Geriatric Care Manager can help facilitate as well as assist in determining needs and resources.

Senior Companionship“Aging is not ‘lost youth’ but a new stage of opportunity and strength.” (Betty Friedan)  Let’s honor our seniors at this stage of their life with the value they provide to us and with the opportunities available to meet their needs and achieve their desires.

Reading some of my other blog articles will help provide you and your loved ones with information to help their life to be wonderful:

For further details on the reverse mortgage contact us if you are in Minnesota.  As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.  For other states, contact your local reverse mortgage specialist who is a broker, one who works with several lenders, has their Broker License/NMLS and preferably holds the Certified Reverse Mortgage Professional (CRMP) designation.

© 2009-2017 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/p4EUZQ-1Am

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Meet our HECM Reverse Mortgage Borrowers

Couple benefits from eliminating monthly mortgage paymentsThere are numerous ways homeowners use their Home Equity Conversion Mortgage (HECM) proceeds.  Meet our borrowers. . .

Eliminate Mortgage Payments:  Lisa and George** had a small mortgage remaining on their home.  It was difficult to make the monthly payments so they did a Reverse Mortgage to eliminate the payments.  There was a balance that they left in a Line of credit for future use.
(Borrowers are still responsible for paying property taxes, insurance, HOA Dues & maintaining home.)

Maintain Lifestyle:  Helen and Harold did a Reverse Mortgage to afford to take their annual trip to Florida during the winter months.  They are thankful they are able to maintain their lifestyle.

Prepare for Emergency:  Earl and Ruth did a Reverse Mortgage to be prepared for an emergency if something were to happen to one of them.

Protect Other Investments:   To have extra spending money without having to cash out their CDs or other investments, Jerry and Carol decided to do a Reverse Mortgage.

Supplement Retirement Income:  Dale and Kevin were two brothers who lived in the home where they were raised.  Being both were over 62 and owners of the property, they were able to do the Reverse Mortgage to supplement their retirement income.

Eliminate Mortgage Payments*, Home Upgrades and Line of Credit:  Dee and Peter did a reverse mortgage to eliminate their current mortgage payment*, take a lump sum for some home upgrades, receive an extra $300 a month in monthly payments to supplement their Social Security, and still have funds in a line of credit for future use.

Purchase a Car:  Bart and Tina wanted to purchase a new car but didn’t have much in the way of savings.  With a Reverse Mortgage they were able to purchase a car.

Purchase Hearing Aide and Home Repairs:  Joe needed a hearing aide but couldn’t afford it with his Social Security benefits.  Rather than taking money from his savings, he did a Reverse Mortgage.  He also used some of the money to put new siding on his home.

Pay Family Caregivers:  Sam and Frances were both in frail health.  Two of their daughters decided to care for their parents rather than hire outside services.  Since they had quit their jobs and it was affecting their family’s financial situation, Sam and Frances decided to do the Reverse Mortgage and use the funds to pay their daughters for the care they were providing.

Reverse Mortgage provides funds for travelingTraveling:  Helen was struggling to meet her living expenses with just her Social Security Benefits.  She also had always dreamed of traveling.  The Reverse Mortgage provided the extra cash she needed and she was able to fulfill her dreams of traveling.

Not Rely on Children:  Nancy had accrued some debt including some credit cards and borrowing from her children.  She did a Reverse Mortgage to pay off those debts and to have a line of credit available for future needs.  She also enjoyed having some extra cash to purchase some things to fix up her home and to go to lunch with friends on occasion.  Because her children had their own expenses and needs, they were relieved that their mother had done the Reverse Mortgage and could live more comfortably without relying on them.

Home Repairs:  Elaine needed some repairs done to her home.  They were more than she could afford on her limited income.  She did the Reverse Mortgage to pay for the repairs and to have extra funds for supplementing her income.

Home Health Care to Stay In Home:  Robert did not want to go to a nursing home, yet he needed long term care.  George, Robert’s son, decided they should do a Reverse Mortgage to pay for the home health care needed to keep Robert at home where he had raised his children.  Robert is happy because he is living where he chooses.  George is happy the family can fulfill Robert’s wishes of staying in his home and still receive the needed care.

Pay Property Taxes:  Dorothy was behind on her property taxes and facing losing her home to the county.  She did the Reverse Mortgage, paying off her back taxes and setting up a Life Expectancy Set Aside (LESA) to pay her future property taxes and insurance.  She was able to live more comfortably, not depending on her children to assist her.

Pay debts and Have Funds for Future:  Bill and Phyllis were preparing for the future.  They did the Reverse Mortgage to pay off their current mortgage*, the credit card debts, and to have money in their line of credit.  With the money in the line of credit when one of them passes away, the other would be able to change the payment plan to receive monthly payments and continue to live the lifestyle they are currently accustomed to, even without the Social Security of their spouse.

Reverse Mortgage provides funds for every day living expensesFunds for Everyday Living Expenses:  Phil became a “new man” since the Reverse Mortgage was done.  He  now goes out to eat with his friends and works in his yard.

Every Day Living Expenses:  Frank and Emma, a vibrant 90 and 86 year old couple, found that each month they were short money to even buy milk.  Their son-in-law and daughter assisted them in obtaining the Reverse Mortgage.  They are so pleased that they now can live more comfortably.  They used the proceeds to receive monthly payments to supplement their Social Security.  They also took out a lump sum to fix up their home and left enough in their line of credit to use as future needs arise.

Payback Family Loan:  Prior to learning about reverse mortgages, when Mabel couldn’t afford her mortgage payments she borrowed money from her son.  When her son needed the money back, once she learned about reverse mortgages she was able to repay him.  With her son paid off, and with no monthly mortgage payments* she was greatly relieved, felt less financial pressure, and had peace of mind knowing she didn’t owe him money and could remain independent.  During the reverse mortgage process she consulted an elder law attorney.  As a result she now has a will, power of attorney, and her health care directives in place.HECM provides funds for home care

Home Health Care: A reverse mortgage allowed Margaret, who had just been released from the rehab center and needed a home health care aide to assist her, have the funds for the care so she could remain in her home.

Purchase a New Home: Mike and Carol decided they needed a 1 level home to fit their changing health needs, they used the Home Equity Conversion Mortgage HECM for Purchase to purchase their new home instead of using conventional financing.

Wouldn't you like to sit back and relax with Security, Independence, Dignity and Control?Wouldn’t you like to sit back and relax with
Security, Independence, Dignity and Control?

Contact us if you are in Minnesota.  As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

When you decide to do a reverse mortgage make sure you work with a local originator or loan officer who specializes in reverse mortgages, has years of experience and knowledge in reverse mortgages in your state, preferably holds the Certified Reverse mortgage Professional (CRMP) designation, licensed in your state, is a broker, working with various lenders, and is willing to meet with you to review the details, before the application, during the application and at closing.

I would caution about working with an originator from another state who is mailing all the documentation, including the application and not “meeting” with you to explain and review what you are signing. (The lenders in another state may send a notary for application and/or closing – they are not licensed mortgage brokers so can NOT answer questions, they are there only to verify your signature.)  Ask for references and find out if the loan originator will be there for you even after the loan has closed.  If you feel pressured, call another originator.  You can find a list of questions to ask an originator at our webite:  www.RMSIDAC.com.

To ensure that borrowers understand reverse mortgages HUD requires anyone doing a reverse mortgage to complete counseling through a third-party.  They will review the program and discuss other options that may be available.

*Borrowers are still responsible for paying property taxes, insurance, HOA Dues & maintaining home.

**Borrowers’ situations are real; borrowers’ names changed to protect their identity.

© 2017 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/p4EUZQ-1sL

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Senior Homeowners Benefit from Reverse Mortgages

Senior Homeowners Benefit From Reverse MortgagesAre you looking for some funds to supplement your retirement?  Do you need to modify your home to meet your needs?  Are you looking for a way to pay for the home health care you need now or may need in the future?  Do you have a mortgage and find making the payments is a struggle?  Or maybe you want to continue making your trip south during the winter but funds are short to do so.  Are you considering downsizing to move closer to family or want to have a home more suitable to your current lifestyle?

A Home Equity Conversion Mortgage (HECM)  reverse mortgage may be your answer.  A reverse mortgage is a home equity loan with special terms for senior homeowners 62 and older.  Similar to a conventional loan, you continue to own the home.

With the flexibility of making payments toward the loan balance, or NOT making a mortgage payment at all, the HECM reverse mortgage could provide the cash for your immediate needs or future needs. (Borrowers are still responsible for paying property taxes, hazard insurance and maintenance of the home.)

It also offers more flexibility on how you can receive the funds including monthly payments, line of credit, lump sum or a combination of these versus a lump sum with a conventional mortgage.

An additional benefit is funds left in the line of credit grow so more funds become available over time…a great advantage over a HELOC and a great tool for long-term care planning.

There are no limitations on how you spend the funds.  Look at ways the reverse mortgage benefited some seniors:

Eliminate Mortgage Payments, Home Upgrades and Line of Credit:  Dee and Peter did a reverse mortgage to eliminate their current mortgage payment, take a lump sum for some home upgrades, receive an extra $300 a month in monthly payments to supplement their Social Security, and still have funds in a line of credit for future use.

Maintain Lifestyle:  Helen and Harold did a reverse mortgage to afford to take their annual trip to Florida during the winter months.  They are thankful they are able to maintain their lifestyle.

Don't Rely on ChildrenNot Rely on Children:  Nancy had accrued some debt including some credit cards and borrowing from her children.  She did a reverse mortgage to pay off those debts and to have a line of credit available for her future needs.   She also enjoyed having some extra cash to purchase some things to fix up her home and to go to lunch with friends on occasion.  Because her children had their own expenses and needs, they were relieved that their mother had done the reverse mortgage and could live more comfortably without relying on them.

Protect Other Investments:  To have extra spending money without having to cash out their CDs or other investments, Jerry and Carol decided to do a reverse mortgage.  Providing them more freedom and control of their life during retirement.

Line of Credit for future needs:  Janice did the reverse mortgage just for the purpose of having a line of credit to draw on in the future when needs arise.  Because the funds in the line of credit grow more funds become available in the future.  With the line of credit available to her when she needs car repairs, or even a new car, or to cover medical expenses or long term care needs she will have funds in her line of credit to cover these needs.

Purchase a New Home:  Mike and Carol wanted to purchase a new home that fit their needs of a one-level so they used the reverse mortgage rather than a conventional mortgage to finance their new home.  This meant they didn’t have monthly mortgage payments to make and provides them a better cash flow during their retirement years.

The loan becomes due and payable when the home is no longer the primary residence of the borrowers or on their 150th birthday.  Another difference and benefit of the reverse mortgage over a traditional mortgage is that the reverse mortgages are non-recourse loans.  This means there is no personal liability if the loan balance is higher than what the home can be sold, it is paid only from the fair market value of the home.  If the home is sold for more than the loan balance then the borrower(s) or their heirs keep the difference.

As with any mortgage loan there are closing costs.  The closing costs of the reverse mortgage are comparable to a conventional mortgage.  They include the origination fee, appraisal, title and settlement and recording fees.  With the FHA HECM reverse mortgage HUD’s regulations state that only the actual cost may be charged to the borrower, they do not allow mark ups such as processing fees.

As a FHA loan the fees include the FHA Mortgage Insurance Premium – this would be the same if they are doing a Forward FHA loan.  When comparing closing costs side by side to a conventional loan the difference is the up-front FHA Mortgage Insurance Premium.  The benefits of FHA insuring the loan include guaranteed funds, a lower interest and the loan being non-recourse as well as regulating the fees.  “Surprise! Reverse Mortgage Closing Costs Actually Compare to Conventional Mortgage Costs” provides a side-by-side comparison.

When considering whether to do a conventional mortgage, a HELOC or a reverse mortgage you must consider if you can even qualify for a conventional mortgage or HELOC; then if you or your spouse can make the payments over time.  For example, what happens if “life happens,” could you continue making those payments?  Would you be stressed trying to pay living expenses, medical bills, or would you be facing foreclosure? Or could you qualify for the reverse mortgage and have enough funds to pay off your current mortgage?

Will the reverse mortgage be the answer to your financial retirement needs?  Explore the option, get the facts, know what to look for in an originator. You might find it will benefit you as it has benefited hundreds of thousands of other seniors.

Meet Reverse Mortgage Originator in personFor further details on the reverse mortgage contact us if you are in Minnesota.  As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

When you decide to do a reverse mortgage make sure you work with a local originator or loan officer who specializes in reverse mortgages, has years of experience and knowledge in reverse mortgages in your state, preferably holds the Certified Reverse mortgage Professional (CRMP) designation, licensed in your state, is a broker, working with various lenders, and is willing to meet with you to review the details, before the application, during the application and at closing.

I would caution about working with an originator from another state who is mailing all the documentation, including the application and not “meeting” with you to explain and review what you are signing. (The lenders in another state may send a notary for application and/or closing – they are not licensed mortgage brokers so can NOT answer questions, they are there only to verify your signature.)  Ask for references and find out if the loan originator will be there for you even after the loan has closed.  If you feel pressured, call another originator.  You can find a list of questions to ask an originator at our webite:  www.RMSIDAC.com.

To ensure that borrowers understand reverse mortgages HUD requires anyone doing a reverse mortgage to complete counseling through a third-party.  They will review the program and discuss other options that may be available.

© 2017 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-1rv

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Hearing these statements are reasons to do a reverse mortgage

Have you heard any of these statements from a homeowner 62 and older?  They may find their solution is a reverse mortgage and they should be encouraged to get the facts to see if the FHA insured Home Equity Mortgage (HECM) is right for their situation.

  • “I want to stay in my home.”Reasons to do a reverse mortgage
  • “My only option is to move.”
  • “I’m planning for retirement.”
  • “I’m not sure how I’m going to afford any potential long-term care costs.”
  • “I can’t afford home health care.”
  • “We can’t afford a mortgage payment.”
  • “We can’t afford to make home repairs or modifications.”
  • “I need money but drawing from my retirement plans have penalties.”
  • “Not enough money at the end of the Social Security check.”
  • “I need help with keeping up my home with housekeeping or yard work.”
  • “I’m downsizing and moving.” or “I’m moving closer to my children.”
  • They can’t afford the little extras that would help them maintain and enjoy their life.
  • They want Security, Independence, Dignity, and Control which they are missing in some way now.

There statements fit into the 5 general reasons to do a reverse mortgage:

  1. Needs based: need funds immediately for covering living expenses
  2. Maintaining lifestyle:  having funds for travel, buying a car, purchasing vacation home
  3. Protecting or delaying draws from other investments:  Using the reverse mortgage to tap home equity rather than accessing other investments or retirement funds that may have penalties or are taxable; let the investments or retirement funds grow so more retirement funds are available later in one’s life; use the home equity so other investments can be left as the inheritance
  4. Planning for long-term care needs (Standby reverse mortgage): Taking the reverse mortgage at a younger age then leaving in the line of credit which grows to have funds to draw from in the future when “life happens”
  5. Purchasing a new home:  Whether downsizing, moving closer to family or buying a dream home, the reverse mortgage can be used for financing.

A reverse mortgage is a mortgage with special terms for seniors 62 and older.  Some of the differences from a traditional mortgage include income and credit scores are not considered to qualify for the interest rate and monthly mortgage payments are not required.  Borrowers are responsible for paying property taxes, insurance, maintaining the home and abiding by the terms of the loan.  Borrowers must meet HUD’s financial assessment qualifications to demonstrate ability and willingness to pay property taxes and insurance into the future.

Rather than a 15 or 30 year term, the loan is due and payable when the home is no longer the primary residence of the borrowers or on the 150th birthday of the youngest borrower. In addition, the reverse mortgage is non-recourse, which means if the loan balance is higher than what the home can be sold for there is no personal liability to the borrower or their heirs.  If the home is sold for more than the loan balance, the borrower or their heirs receive the difference.  The most common and only reverse mortgage available in Minnesota is the FHA HUD insured Home Equity Conversion Mortgage or HECM.

Options are available!  When you hear any of the above statements remember a reverse mortgage may be the option that is the most beneficial to their situation.

© 2012-2016 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:   http://wp.me/p4EUZQ-1m5

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

TV Show Discusses Facts & Uses of Reverse Mortgages

Dr. David Johnson discusses Reverse MortgagesAs host of the show Savvy Senior Sources…Talking With Experts, I and my co-host, Deb Nygaard, talk with Dr. David Johnson, Associate Professor of Finance, to help people understand reverse mortgages and some of the benefits, encouraging people to get the facts from a reverse mortgage specialist before making any decisions.

“To not understand or to be misled and think it’s a bad thing is so sad because so many people could benefit from it.” says Dr. Johnson.

Tune in to watch at:

Part 1:  https://youtu.be/GN84e4YRF6Q
Part 2:  https://www.youtube.com/watch?v=tsdiIbgKutU

© 2015 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/p4EUZQ-1dq

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Savvy Senior Sources…Talking With Experts TV Show Released

I’m excited to announce the release the new TV show, Savvy Senior Sources…Talking With Experts that I host and produce.  The series of TV shows talk with experts for guiding your way through resources A to V in areas that seniors, their families, caregivers, and trusted advisors will find helpful for planning, aging in place with the ability to stay in their homes and remain independent or where to turn if and when going through the transition. The shows give viewers the opportunity to “meet” the trusted providers of senior services before making a phone call to them.

Brought to you from Savvy Senior Sources, LLC, Reverse Mortgages SIDAC and GWG Life, LLC are proud sponsors of the shows.

Please tune in and subscribe to the YouTube Channel Savvy Senior Sources to be notified when the new shows are broadcast. https://www.youtube.com/channel/UCmgVGVbfY6-RcHkeBc7WmPQ/feed

Enjoy the shows!

© 2015 Beth Paterson, CRMP, Beth’s Reverse Mortgage Blog, 651-762-9648

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Our Experiences with Getting Our Reverse Mortgage

Happy With Reverse MortgageActual reverse mortgage borrowers have good things to say about their reverse mortgage experiences.  Let me share what some of our Minnesota reverse mortgage borrowers have said.

Dave shared, “Having had an accident that eliminated my of my teeth, total dental implants was required.  Without a reverse mortgage I could not have raised the money to have the implants done.  It was a great relief to be able to smile again and eat sweet corn again.”

To increase his cash flow Bernie did a reverse mortgage and had this to say, “After talking with 2 other reverse mortgage representatives, receiving apologies for non-functioning DVDs, and talking to an attorney, I chose Reverse Mortgages SIDAC.  It is so helpful to deal with local persons.  Both Beth and Steve followed up with everything.  They were very helpful in personal visits and phone calls.  Beth has also been helpful with other senior issues.”

Larry and Karen* did the reverse mortgage to stabilize their finances.  They found Reverse Mortgages SIDAC to be friendly, courteous and respectful of them.  Additionally they shared they found that all pertinent information was discussed regarding reverse mortgage options and costs and the details were explained so they understood them.  They also felt that they were informed of what to expect during the processing and kept informed of the status through the process.  In addition they said they received explanations of the forms that were signed at closing.  Overall they shared their experience was positive.

Mike shared, “Without the help and knowledge of Beth Paterson who first told me about the reverse mortgage to buy I would never have been able to get our beautiful new townhome, which my wife needs because of her mobility to navigate a lot of stairs.  I owe Beth a big debt of gratitude.  She is the best!  She is knowledgeable and she cares and worked tirelessly for us.”

Wayne recommends us stating, “Reverse Mortgages SIDAC is very customer focused and will settle for no less than what the applicant request’s objectives are.  They knew the “system” very well and lead the borrower though it step by step.  Above all, Reverse Mortgages SIDAC is respectful and honest.”

Helping them out of foreclosure, Gary and Cathy* said, “Thanks so much! Beth and Steve you guys are the best!”

Satisfied Reverse Mortgage BorrowerYvonne wrote, “My experience with Beth and Steve was very enjoyable.  I was always able to reach one of them.  I paid off my mortgage, so eliminated the monthly mortgage payment!  It has made a big difference in my quality of life to have that additional income every month.”

To supplement her income, Marilyn did the reverse mortgage, sharing, “I didn’t really want to have to do this reverse mortgage because I’m too proud.  But thank goodness it was there for me.  Steve was so very helpful as was Beth.  At closing all documents were in order perfectly.  I’m very glad I reached out to this company.  Everything went so well.”

Bonnie did the reverse mortgage to “secure my retirement” allowing her to retire.  Of her experience she said, “Beth and Steve were wonderful!  Caring, efficient, thoughtful. All are words that describe them and their service – I had contacted a nationally advertised company but did not feel at all comfortable with them.  I went with Reverse Mortgages SIDAC because they are local and knowledgeable about Minnesota and my needs here.”

“Having Beth and Steve to guide me through every step of the process was the blessing that made a reverse mortgage possible.  We were able to complete the process in time to obtain the maximum possible funds under the old system, making my dream of remodeling possible,” Matthew stated.

These are just a few of the experiences reverse mortgage borrowers have had.  Keep them in mind as you hear about reverse mortgages and are considering one.  Work with a reverse mortgage originator who is local, specializes and has experience in reverse mortgages, is ethical adhering to the NRMLA pledge and takes their time to give you the details so you understand the reverse mortgage and will have a positive experience and find the benefits.  If you’re in Minnesota, give us a call.

*Some names changed to protect privacy.

© 2015 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/p4EUZQ-1bu

Using A Reverse Mortgage for Freedom, Life, Liberty and the Pursuit of Happiness

Using A Reverse Mortgage for Freedom, Life, Liberty and the Pursuit of HappinessAs we celebrate our country’s Independence this 4th of July we think of the freedom’s we have in addition to having the rights to life, liberty and the pursuit of happiness.  Personally we may look at having the freedom to make choices and not rely on others as well being able to pursue the things that make us happy to live life with independence.

Freedom to seniors may mean choosing to remain in their home, not rely on their children or the government financially.  Happiness likely means having the finances to enjoy retirement, maintain their lifestyle, go out to lunch with friends, to take their children or grandchildren out to eat or for a fun activity, maybe to the zoo or a play, or to be able to travel for family reunions or weddings.

Use a reverse mortgage to  feel more free, have choices, or pursue a better retirement lifeI’m guessing you know someone 62 and older who would be like to be able to feel more free, have choices, or want to pursue their retirement life with the following.  I’m also guessing they would feel happier being able to pursue any the things on this list during their retirement.

  • Stay in their home where they may have raised their family, are familiar with the neighborhood and their neighbors and where they usually want to remain.
  • Pay off a current mortgage to eliminate the monthly mortgage payments.
  • Have improved cash flow with no monthly mortgage payments.
  • Protect some of their other retirement funds or investments where there might be taxes or penalties on withdrawals.
  • Purchase a new home to downsize and/or  move closer to family
  • Have funds for emergencies.
  • Have funds for making home improvements or home modifications.
  • Retire and not feeling like they have to work just to have money to pay the bills.
  • Save their home when faced with foreclosure or tax forfeiture.
  • Have cash flow to be able to pay taxes.
  • Have funds to pay for home health care.
  • Have funds for some assistance with home care or companion services.
  • Have funds for adult day services.
  • Have funds for medical expenses and prescriptions.
  • Afford going to the dentist.
  • Afford new eye glasses.
  • Have funds for the needed hearing aid.
  • Have funds to cover long term care expenses.
  • Cover everyday living expenses.
  • Not rely on credit cards.
  • Not rely on children.
  • Have funds for the little extras in life, like:American Flag represents freedom and independence; a reverse mortgage provides financing for freedom and independence in retirement
    • getting one’s hair done,
    • having cable TV,
    • buying groceries,
    • going to lunch with friends,
    • treating their children to dinner,
    • Going to community plays or the theater or a concert,
  • Taking their grandchildren to the zoo or a movie,
  • Being able to do hobbies.
  • Purchase a more dependable car
  • Afford transportation when they can no longer drive.
  • Afford the travel for the family wedding or reunion.
  • Take the vacation they have dreamed of all their life.
  • Reduce financial stress.
  • Have funds to fulfill needs and goals.
  • To live with security, independence, dignity and control.

The equity in your home can provide security, independence, dignity and control through a reverse mortgageA reverse mortgage, a loan with special terms for homeowners 62 and older, may be the financial tool to provide the freedom, life, liberty and pursuit of happiness.

Offering many advantages for senior homeowners, a Home Equity Conversion Mortgage (HECM), the most common reverse mortgage, and only reverse mortgage currently available in Minnesota, has no monthly mortgage payments (borrowers are still responsible for paying property taxes, hazard insurance, maintaining the property), no income or credit score qualifications for determining the interest rate.*  This unique loan allows access to cash from the equity of the home to use through monthly payments, a line of credit with a growth rate, lump sum or a combination of these and pay it back when the home is no longer the primary residence of borrower(s).  When the home is sold any remaining equity goes to the borrower or their heirs.  With the reverse mortgage, if the loan balance is higher than the home can be sold for there is no personal liability to borrowers or their heirs.

While watching fireworks, consider how a reverse mortgage may provide freedom, life, liberty and the pursuit of happiness during retirement years.As you hang your flags, watch parades, gather for picnics, and watch fireworks celebrating the independence of the US, and the freedom, life, liberty and pursuit of happiness we have, ponder and discuss what this means to you and your senior loved ones.  Consider how a reverse mortgage may provide freedom, life, liberty and the pursuit of happiness during retirement years.

Happy Independence Day!

*As of April 27, 2015 income and credit are used for the Financial Assessment to determine borrower’s ability and willingness to pay property taxes and insurance into the future.

© 2014-2015 Beth Paterson http://rmsidac.com/beths-reverse-mortgage-blog/ 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-17Y

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

© 2014 Beth Paterson http://rmsidac.com/beths-reverse-mortgage-blog/ 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://rmsidac.com/?p=4308

Related articles:

– See more at: http://rmsidac.com/beths-reverse-mortgage-blog/#sthash.X7efyTdj.dpuf

© 2014 Beth Paterson http://rmsidac.com/beths-reverse-mortgage-blog/ 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://rmsidac.com/?p=4308

Related articles:

– See more at: http://rmsidac.com/reverse-mortgages-offer-new-products-for-better-options-for-borrowers/#sthash.4OxwRx6J.dpuf

© 2014 Beth Paterson http://rmsidac.com/beths-reverse-mortgage-blog/ 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://rmsidac.com/?p=4308

Related articles:

– See more at: http://rmsidac.com/beths-reverse-mortgage-blog/#sthash.X7efyTdj.dpuf

Think you don’t need a reverse mortgage? Think again… Maybe you’ll WANT one.

Benefit from Reverse Mortgage for Financial and Long Term Care PlanningI sometimes have people say to me they don’t need a reverse mortgage.  Have you said or thought this?  Have you thought  a reverse mortgage should be a last resort or one should wait until they are older before doing one?   Let’s explore how a reverse mortgage can help you with your retirement planning and long term care planning needs.   And why doing a reverse mortgage now rather than later may be to your advantage.  You might then decide you want one.

A reverse mortgage is a mortgage like any other mortgage, using the equity in one’s home, but has special terms for homeowners 62 and over.  There are no income or credit score qualifications for the interest rate and no monthly mortgage payments required.  Homeowners maintain the title; the reverse mortgage lender does not own the home.  Borrowers are responsible for paying their property taxes and insurance as well as maintaining the home.  Reverse mortgage borrowers are highly protected – more so than with any other loan.

The Loan Amount, referred to as the Principal Limit, of the HUD insured Home Equity Conversion Mortgage (HECM) reverse mortgage is based on the age of the youngest borrower, the lesser of the home value or FHA Lending Limit, the program chosen and the Expected Interest Rate.  HUD allows certain types of properties to qualify: single family homes, duplexes or 1 to 4 unit properties as long as the home owner is living in one of the units, townhomes, FHA approved condos, and manufactured homes that meet HUD’s requirements.

Let’s compare doing a reverse mortgage now to waiting before doing your reverse mortgage.

TODAY

10 Years from Now

 

Barb wrote: “Having a Reverse Mortgage has given me monetary independence and I never realized how important having cash available would be until I fell in October 2013 and broke my right shoulder. Without the Reverse Mortgage money I would have been ‘up a creek without a paddle’.  Financial independence
saved the day.”

AGE

63

73

HOME VALUE

$200,000

$263,000
(based on Moody’s
Analytics Factors)

AVAILABLE (Approximate net after fees)

$92,729

$130,626*

  • Based on open-ended credit with current Expected Interest Rate of 5.21%; Closing costs of $5,871 plus FHA up-front Mortgage Insurance Premium of .5%; drawing 60% or less in 1st 12 months; annual FHA Mortgage Insurance Premium (MIP) is 1.25%.
  • The Expected Rate is used to calculate the Principal Limit/Loan Amount and for estimated projections on the loan.
  • Growth Rate in this example based on assumption of Expected Interest Rate of 5.210%.  Actual Line of Credit Grows based on current interest rate plus 1.25%.  So if interest rate is higher, funds in the line of credit will grow faster.
  • These are estimates, the actual amounts are based on many factors. Different assumptions would result in different numbers.

* If the interest rate is higher, and it is likely that it will be in the future, less funds would be available.

While it may look like it’s to your advantage to wait until you are older, look at what happens if you do the revolving credit reverse mortgage now and leave the funds in a line of credit for your future use.

Funds in the reverse mortgage Line of Credit grow and this is the advantage of doing the reverse mortgage now.  Here’s an example of future funds available if at the age of 63 you draw less than 60% in the 1st 12 months and you have $92,729 in your line of credit initially:

Line of Credit Available*

No Draws

After Draw of $5,600 Each Year

 

Jerry stated, “The Reverse Mortgage enables us to live in our home without mortgage payments.  Line of credit will grow for our future needs.  The whole package is a win-win for my wife and me.”

 Age 68

$136,488

$92,557

 Age 73

$188,364

$101,624

Age 83

$358,756

$134,739

  • Based on open-ended credit with current Expected Interest Rate of 5.21%; Closing costs of $5,871 plus FHA up-front Mortgage Insurance Premium of .5%; drawing 60% or less in 1st 12 months; annual FHA Mortgage Insurance Premium (MIP) is 1.25%.
  • The Expected Rate is used to calculate the Principal Limit/Loan Amount and for estimated projections on the loan.
  • Growth Rate in this example based on assumption of Expected Interest Rate of 5.210%.  Actual Line of Credit Grows based on current interest rate plus 1.25%.  So if interest rate is higher, funds in the line of credit will grow faster.
  • These are estimates, the actual amounts are based on many factors. Different assumptions would result in different numbers.

Consider the amount you will have in the line of credit available for your retirement needs or long term care needs when doing the reverse mortgage now.

You can pull all or some of the line of credit funds out as you desire or the payment plan can be changed during the life of the loan, for example, you may change from having some or all of your funds in the line of credit to receiving monthly payments.(1)

Even when you use some of the funds each year you will be taking advantage of having the additional money you need annually plus still having funds in your line of credit for future use.

The Principal Limit or Loan Amount is based on age with the older one is receiving more funds.  At the current Principal Limit Factors the increase is approximately 1% for each year.  This is lower than the line of credit growth rate.  With this taken into consideration, in just 5 years the funds in the line of credit with no draws will likely be higher than if you wait the 5 or 10 years to do a reverse mortgage.

Lucy* stated, “Having done the reverse mortgage has given me a new sense of security.”

Have No Monthly Mortgage Payments, Lower Interest Expense, Funds for Needs or Wants for Retirement Planning or Long Term Care Planning or Needs

In addition to a lower interest rate(2) with a reverse mortgage, eliminating your monthly payment will improve your cash flow because you don’t have to pay out that monthly payment each month.  While the loan balance will rise because you are not making payments, the reverse mortgage is non-recourse which means there is no personal liability to you or your estate if the loan balance is higher than what the home can be sold at fair market value in the future.  When the loan is being repaid, if the loan balance is lower than what the home can be sold for, the borrower or the estate receive the difference.

You have the funds to use during the term of the loan for whatever you need or want.  By doing the reverse mortgage earlier you have use of funds that otherwise would go toward your monthly mortgage payments.  Why not improve your cash flow sooner than later?

You do have the option of making payments with your reverse mortgage – it’s just not required.  You can choose when, how often and how much you want to pay.

If you make the payment(s) on the reverse mortgage, the payments will reduce the loan balance.  And with the adjustable rate, open-end reverse mortgage the payment will increase the Line of Credit meaning the funds are available in the future.  And over time the funds available are likely to exceed the home value at the time the reverse mortgage was initiated.  Additionally, using Moody’s Analytics, the line of credit is likely to grow faster than the home is appreciating.

Consider if you do the reverse mortgage now, let the line of credit grow and in 8 years you have a medical situation.  If you have a conventional mortgage you’ll have to balance paying mortgage payments with paying medical bills.  With the conventional mortgage if you don’t pay your mortgage in a few short months you are likely to be facing foreclosure.

If you are choosing to make monthly mortgage payments on the reverse mortgage, you could stop the payment being they are not required and therefore eliminating the risk of foreclosure from not making the monthly mortgage payments.  You have the option of resuming making payments if you choose.  You still need to pay your property taxes, keep hazard insurance on your home and pay home owner association dues if applicable.

Take advantage of doing the reverse mortgage now while the interest rate is low.  And then when the interest rate does increase, the line of credit will grow even faster (the growth rate is determined by the interest on the loan plus 1.25%).  The line of credit will grow regardless of the home values increasing or decreasing.

In waiting to do a reverse mortgage until you feel you have a need, you are taking risks.  For example:

Reduced Loan Amount or Principal Limit

Over the last few years HUD has reduced the calculation of the Loan Amount (Principal Limit).  We don’t know if HUD may find it necessary to decrease this again and/or increase the FHA Mortgage Insurance Premiums.  Waiting may mean less funds are available if HUD reduces the Loan Amount or Principal Limit.

Higher Expected Interest Rates Equals Less Funds Available

With FHA Reverse Mortgages the Expected Interest Rate is calculated weekly and is used to determine initial funds available.  The Expected Interest Rate is considered a long term projection of future interest rates.  As the Expected Interest Rate changes to a higher rate, in the future less initial funds could be available to borrowers.  It is unknown as to the timing of when the rates may rise but at some point they will likely go up.

Properties that qualify

HUD already has restrictions on condos that are not FHA approved making it difficult to do a reverse mortgage on condos.  (The spot condo approval was removed in 2010.)  We are seeing lenders add manufactured homes, log homes, berm, and rural homes to their list of ineligible homes.  While there are still some lenders who continue to lend on these properties based on HUD’s requirements, this may change in the future and they are likely to tighten the underwriting requirements for these types of properties.  If you are in one of these properties you should look at doing a reverse mortgage now while it’s still an option.

Higher Valued Home Owners Should Do A Reverse Mortgage Before The Lending Limit Is Reduced

Currently the FHA HECM (Home Equity Conversion Mortgage) Lending Limit is $625,500.  At some point this rate could be reduced to a lower national limit or be based on a lending limit in the county where one lives (as is currently with a Forward FHA).  What this means is that if your home is valued more than the Lending Limit amount you can receive is based on the Lending Limit rather than the home value.  For example if your home is appraised at $700,000, currently we would use $625,500 to determine the reverse mortgage Principal Limit.  A lower Lending Limit would make a big difference on the amount one can receive.  If you have a higher valued home look at doing your reverse mortgage now instead of waiting.

Reverse Mortgage Financing Retirement

What would it be like for you to have security knowing you readily have funds available in your Line of Credit during your retirement years and the benefit of improved financial health?

You may not need a reverse mortgage now but it may benefit your retirement and long term care planning if you do one now.


(1)Consult with an Elder Law Attorney or financial consultant regarding the impact of pulling all your funds from a line of credit will impact Medicaid.
(2)Historically the HECM open-end credit reverse mortgage interest rate has been lower than what one can generally qualify for with a conventional mortgage.

Some information used in this article obtained from nu62(sm)

*Name changed to protect privacy

*As of April 27, 2015 income and credit are used for the Financial Assessment to determine borrower’s ability and willingness to pay property taxes and insurance into the future

Topic first published 2009; Updated 2014
© 2009-2014 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/pxPEm-FD

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Without The Reverse Mortgage Money I Would Have Been “Up The Creek Without A Paddle.”

My reverse mortgage was a good decisionI recently received the following letter from a reverse mortgage client of mine outlining why a reverse mortgage was a good decision.

Dear Beth,

I am writing about why a Reverse Mortgage was a good decision for me.  I have had mine since 2010.  My husband died in 2009 and although I was able to keep up with my monthly bills, I would run short of cash when Auto Insurance, Fire Insurance, Property Tax and other unexpected bills would arrive.

My family would always be willing to help me with those bills but I did not want to be a burden to them.  My daughter-in-law Nancy belongs to a Women’s Group with you, Beth Paterson, and suggested that I may want to look into a Reverse Mortgage.  The family was with me throughout the whole procedure and they agreed that it was a good choice for me.

Having a Reverse Mortgage has given me monetary independence and I never realized how important having cash available would be until I fell in October 2013 and broke my right shoulder.  I needed care-givers two times a day.  Without the Reverse Mortgage money I would have been ‘up a creek without a paddle’.  I simply filled out a form, mailed it to the mortgage company and they transferred the needed funds into my bank account.  Financial independence saved the day.

Barbara H.

A reverse mortgage is a mortgage like any other mortgage, using the equity in one’s home, but has special terms for homeowners 62 and over.  There are no income or credit score qualifications for the interest rate and no monthly payments required.  Senior homeowners maintain the title as the reverse mortgage lender does not own the home.  Borrowers are responsible for paying their property taxes and insurance as well as maintaining the home.  Reverse mortgage borrowers are highly protected – more so than with any other loan.

The HECM Adjustable Rate program allows for borrowers to receive their funds in monthly payments, line of credit, lump sum or a combination of these.  The monthly payments can be structured as tenure payments, for life of the loan, or as they need.  The line of credit grows so more funds become available in the future.  There is also a HECM Fixed Rate option which is favorable if one is pulling all their funds out in a lump sum.

As a non-recourse loan there is no personal liability when repaying the loan, the loan is repaid from the property only.  This means if the loan balance when due and payable is $200,000 but the home can only be sold for $150,000 the borrower or the estate do not have to come up with the $50,000 difference.  The loan is generally repaid from the sale of the property when the home is no longer the primary residence of the borrower, usually when they move, die or sell.  If the home is sold for more than the loan balance the remaining equity goes to the borrower or the estate.

Barbara has the line of credit option which, with the growth rate, has grown over time.  The line of credit is there for situations like hers.

Are you or do you know someone who would like to have access to funds providing financial independence and not rely on others?  Consider a reverse mortgage!

*As of April 27, 2015 income and credit are used for the Financial Assessment to determine borrower’s ability and willingness to pay property taxes and insurance into the future

©2014-2015 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-Z2

Related articles:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.