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Memories Created for Reverse Mortgage Heirs

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Reverse Mortgage Created Memories for Bob and His FamilyOn a Friday I received a call from the niece of one of my Minnesota reverse mortgage clients telling me that Bob had passed away.  After extending my sympathies I answered her questions and helped her understand the process now that the loan is due.   As I talked with Bob’s niece she shared how loving Bob was and how the FHA  Home Equity Conversion Mortgage (HECM) reverse mortgage not only benefited him but also allowed for him to create numerous memories for the family.

During our conversation I shared some memories of my meetings and conversations with Bob and his perspective on how the reverse mortgage had made a difference in his life.  Bob had called me after his trip to Yellowstone with a nephew telling me what a wonderful time he had had and how happy he was to be able to take the trip.  During another conversation he had said he had remodeled his home to be adapted to be wheelchair accessible.  He had also shared how much the reverse mortgage had given him his independence and the ability to remain in his home where he wanted to be with his dog.  I originally shared Bob’s stories in my blog “Reverse Mortgage Helps Minnesota Senior To Be Prepared for Future.”

Apparently Bob’s wife who had proceeded him in death limited Bob from fulfilling his dreams.  It appeared it had to do with not having much money but also her attitude.  With the reverse mortgage he had money like he never had before.  He would tell his niece, “I don’t know how it is that I have money now when I never did before.”  She said he became energetic and interested in life.

The family’s perspective of the  trip to Yellowstone was that it had not only been a wonderful experience for Bob, his young traveling partner had an experience of a lifetime with his uncle and has memories of the trip to treasure.  I was told the expressions on their faces upon their return were smug and they were keeping secrets that will likely never be shared like “little boys” do.

Bob bought gifts for family members like a vacuum cleaner for someone who needed it but didn’t have the funds to purchase it on their own.  What a good feeling it must have been for Bob to be able to help his family.

Reverse Mortgage created memories for familyHe bought tickets to take family members to movies and plays.  I was told that one of those experiences was taking his niece’s family to the play “Sleeping Beauty.”  As they were sitting in their seats the niece looked over and saw the pleasure in Bob’s face as he was watching the expressions on the faces of his family.  What a memory to treasure!  This was only one of several of these types of adventures and memories for Bob and his family.  The pleasure for the family was the kids got to know an uncle and share time with him as they had not been able to previously.

Having less funds available when the loan is due and payable or less of an inheritance is a negative of the reverse mortgage.  But using the funds and creating the memories by spending time together or giving the gifts and seeing the difference it makes while one is still alive can be a treasure which can never be replaced.

As his niece shared the stories I got tears in my eyes. The reverse mortgage had not only changed Bob’s life but the lives of an entire family.  Just before we were hanging up, Bob’s niece said, “Thanks for loving my uncle too.”

Providing security, independence, dignity and control for our seniors is why I believe in reverse mortgages and am in this industry.  It’s a blessing for me to be able to help seniors and their families.  And I do love my clients and hearing their stories.

For the details and facts on reverse mortgages visit our website, www.RMSIDAC.com.

First posted in 2011, re-posting 2014
© 2011-2015 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-Zf

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.

Reverse Mortgage Borrowers Remain in Control

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Reverse Mortgage borrowers remain in control of their homeWhen sitting down with a new prospect the other day I asked what they had heard or thought about reverse mortgages.  Bob responded that reverse mortgage borrowers lost control of their home and their money.  Have you heard this too?  I want to correct this misconception for you.

Reverse mortgage borrowers remain in control of their home.  They own the home, title remains in their name, just like with any mortgage.

They have the option to paint the home the color of their choice, plant trees or landscape as they choose, and to decorate the inside as they desire (or not make changes).

I had one borrower ask if they could paint their house purple.  With a chuckle I responded  they could although the neighbors may not like the color purple.  The point is, as the homeowner they have the option to choose what color they want to paint their house.

Borrowers are, however, responsible for maintaining the home.  This is to the homeowners best interest anyway, and whether they have a reverse mortgage, a conventional mortgage or no mortgage at all.  Maintaining means things like no bare wood or chipped paint, roof replaced when needed, foundation and structure is sound, electrical and plumbing in working order.

In their will or trust the reverse mortgage borrowers still choose who will inherit the home or equity of the home.

While the reverse mortgage borrowers will be using the proceeds for their needs or wants during the term of the loan, when the home is no longer their primary residence, the loan is due and payable.  The loan is generally paid back from the sale of the home with no personal liability to the borrower or their heirs.  If the home is sold for more than the loan balance the borrower or the heirs receive the difference.

If an heir wants to keep the home, they have this option – they would just need to pay off the reverse mortgage balance.  This can be done through a conventional mortgage, their own funds or if they were the beneficiary on an insurance policy.

Note that if the loan balance is higher than the fair market value, the borrower or their heirs only need to pay 95% of the fair market value of the home, they do not need to come up with the difference.  With the FHA HUD insured Home Equity Conversion Mortgage (HECM) the FHA Mortgage Insurance will cover the difference for the lenders.

They have the option to sell when they want and choose the real estate agent.  If they have passed away then their estate chooses the real estate agent.

The way one wants to receive their reverse mortgage proceeds is also their choice.  They can receive the funds in a line of credit, monthly payments, lump sum or a combination of these.

And how they use these funds is in their control – lenders cannot dictate how one spends the proceeds from their reverse mortgage.  Borrowers can and have used their reverse mortgage funds to pay for home repairs, purchasing a new car, traveling, home care or whatever one needs or wants… it’s their choice.

Reverse Mortgage borrowers remain in control of their homeThe reverse mortgage provides control for borrowers to have funds so they can make their own choices.  For example, where they want to live (in their own home vs government subsidized housing), who they want to care for them (vs the government deciding which home care agency they can use).

Reverse mortgage borrowers do remain responsible for paying their property taxes, having home owners insurance, maintaining the property and paying home owner association dues if applicable, just as they do with or without a conventional mortgage.

Losing control of your home or money with a reverse mortgage is a misconception.  In reality reverse mortgage borrowers have control and in some cases even more control than without doing a reverse mortgage; having funds available gives them more choices and options.

Originally Posted in 2011; Re-posted in 2014
© 2011-2014 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/p4EUZQ-Zd

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.

Reverse Mortgages Provide Security, Independence, Dignity And Control

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Reverse Mortgage Help Their Lifestyle

A Reverse Mortgage Helps Their Lifestyle

When Andrew and Harriet, both in their 70’s, went to their bank to inquire about refinancing their current loan, their banker suggested a reverse mortgage and referred them to us at Reverse Mortgages SIDAC.  They needed some additional funds for home repairs including a new energy efficient furnace.  Anticipating future medical expenses, they liked the idea that with the reverse mortgage they could get money for their immediate needs, eliminate their mortgage payment, and still have funds for their future needs by having a line of credit.

They decided to do a reverse mortgage with the understanding that they would still own their home (as they do with their current mortgage), payments aren’t required, and generally the interest rate is lower than they could qualify for on a regular loan.  They understand they continue to be responsible for their taxes, homeowners insurance, and maintenance of the property and don’t have to repay the loan until the home is no longer their primary residence.  They liked the idea that even if one of them goes into the nursing home, the other one can stay in the home.  Additionally, it was appealing that the funds are tax-free*, Social Security and Medicare are not affected and Medical Assistance and other public benefits can still be received.

A mortgage with special terms for homeowners 62 and older, a reverse mortgage has no income or credit score qualifications and a low interest rate (averaged around 6% over the last 15 years), which offers many advantages for senior homeowners.  Allowing access to cash from the equity of the home to use now and pay 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.

“When a friend told me she was doing a reverse mortgage I thought, that sounds really good.  I thought, if I do a reverse mortgage, I could do some things to my home, and maybe take a vacation.  After everything was explained to me and my children in detail and in words I could understand I did a reverse mortgage.  I now am getting new windows and siding and am going on vacation with my daughter,” said Judy in St. Paul.

Happy to Repay Son-In-Law from Reverse Mortgage

Happy to Repay Son-In-Law from Reverse Mortgage

A few years ago Patricia had borrowed money from her son-in-law, Brad, to pay off a loan.  Then Brad needed the money back for his own purposes.  After consulting her family and an attorney, she did the reverse mortgage.  She told us she was greatly relieved and the pressure was off her now that she no longer owed Brad money and wasn’t dependent on him.  She added as a result of consulting the attorney, “Other good benefits are that I tended to my will being made, my health directives done, and a trust fund set up.  All that is done now and I’m prepared for the future.”

The factors used to determine how much is loaned to borrowers include the home value or FHA lending limit ($625,500 through the end of 2014), the age of the borrower (the older one is the more funds they can receive), and an Expected Interest Rate.  If one doesn’t have a mortgage on their home they benefit from having more funds available to them. Cash flow will improve when the current mortgage payment is eliminated if one does have a current mortgage on their home.

No matter what the home values may be and no matter if one is only 62, it is still a good time to do a reverse mortgage because the interest rates are so low and one can benefit from the Line of Credit growth rate.  When one waits for the home values to be higher or one waits until they are older, there may be more reverse mortgage funds available.  However, if one waits to do the reverse mortgage, the interest may be higher and consequently less funds available.

As with a conventional loan, there are traditional closing costs including an origination fee, appraisal, title fees, title insurance and recording fees.  With the FHA insured, Home Equity Conversion Mortgage (HECM) borrowers pay a mortgage insurance premium.  The fees are often perceived as high but they actually compare to a conventional mortgage with the difference being the FHA Mortgage Insurance Premium.  However, in the big picture the reverse mortgage costs less because of the much lower interest rates.  The only out of pocket expense is the cost of the appraisal.

“It was a blessing when we heard of reverse mortgages.  We were behind in the property taxes and mortgage payments and faced foreclosure.  We were really in a mess.  The reverse mortgage cleared it all up and has lifted a weight from us that we can live in the house and not worry,” said Gwen and Robert.

A reverse mortgage has allowed thousands of Minnesota seniors to remain in their home with security, independence, dignity and control even during trying times.  And if you know a senior who wants to sit back and relax with security, independence, dignity, and control, a reverse mortgage may be their answer.

*consult tax advisor who is familiar with reverse mortgages

Originally posted in 2009, updated in 2014
© 2009-2015 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-Z9

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.

What To Consider When Choosing Your Reverse Mortgage Originator

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When you have decided to explore or to proceed with a #ReverseMortgage you want to make sure you are working with an #originator you are comfortable and has the knowledge and experience to guide you through the process. There is a difference in originators with their expertise, knowledge and experience with reverse mortgages along with the customer service they provide. To help ensure that you are working with an originator who is experienced, knowledgeable and meets the industry’s standards, consider the following when choosing your reverse mortgage originator. http://wp.me/pxPEm-AJ