Do you know your long-term care options and why to consider financing with a reverse mortgage?

Posted on May 7, 2018 by Beth Paterson, CRMP

Education and planning are the keys to making decisions especially when it involves care while aging. You need to be proactive and know what resources and options are available. With the education and a plan you have more options and can be proactive rather than reactive.

As Forest Gump said, “Life is like a box of chocolates, you never know what you’re gonna get.” This is especially true for aging. I was fortunate to participate in and be considered a trusted advisor at a Minnesota Private Duty Home Care Conference, “Keeping Mom and Dad at Home”. During the conference attendees were encouraged to plan the future as they would a trip, looking at what would they put in their suitcase for the journey of aging and be prepared for what isn’t known to happen along the way.

Conference attendees reviewed what is known about seniors and their families. We looked at what is known about seniors:

They underestimate their situations
They don’t want to worry or be a burden to their children
So seniors don’t tell their children what’s going on
They want their families help
Families often don’t have the time or the financial means to help
Role reversal is uncomfortable
They are fearful of nursing homes and moving
93% say they want to stay in their home

Then we looked at what we know about the families of seniors:

They want to help
They are busy; they are the sandwich generation dealing with their own family, careers, life
They see changes but don’t know what they mean or what the warning signs are
They may become frustrated with their parents denials
Role reversal is uncomfortable
It’s generally women who are doing the caregiving.

Consider what’s important to the seniors, what do they want for their journey? It’s important to involve the seniors in the process, the plan, and have them agree with the plan. Discuss their wishes along with what you think is needed. What will provide them their security, independence, dignity and control of their life? Including a mediator and/or trusted advisor is a good idea. If they are resistant to bringing someone else in, discussing their options, or accepting outside help, tell them that they may not need this but that you do.

By being educated and having your plan in place if a crisis occurs means more options will be available along with decreased costs. Being reactive at a time of crisis means less options are available along with greater costs. Emotional and reactive decisions make for poor choices and actions made from regret and guilt.

Part of the education and planning means getting the facts. Unfortunately we have been conditioned to think that seniors will end up in a nursing home; that an assisted living facility provides all the care needed; that home care is short-term and the nursing home and/or assisted living is safer than being at home.

We need to recondition our thinking:

Seniors can live at home indefinitely
Home care can provide a nursing level of care at home
Living at home can be safer; you receive a 1 to 1 ratio of care versus 1.5 or more of care per person
Living at home is affordable

Let’s compare the costs of some options:

Home Care 1	$1,404/month	3-hour visits, 4 days a week, $27/hour
Home Care 2	$3,276/month	4-hour visits, 7 days a week, $27/hour
Home Care 3	$4,914/month	6-hour visits, 7 days a week, $27/hour
Home Care 4	$8,500/month	24-hour or live in care, one-on-one care, $275/day; includes a live in caregiver and frequent visits from a RN
Assisted Living Rent	$3,585/1-bedroom/month	Care packages range from $300 – $2,700; additional care would be charged per hour by a home care agency
Assisted Living Rent & Home Care 1	$4,989/month	One bedroom apartment rent plus additional care at 3-hour visits, 4 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 2	$6,861/month	One bedroom apartment rent plus additional care at 4-hour visits, 7 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 3	$8,499/month	One bedroom apartment rent plus additional care at 6-hour visits, 7 days a week, $27/hour from home care agency
Nursing Home	$8,000 – $12,000/month	Single or double room, level of care and facility amenities

This information and these home care and senior housing figures are a compilation provided by the home care agencies; are approximations and can vary by company and geographic area. Additional home care and senior housing costs were obtained from Genworth Financial, Inc. Cost of Care Survey.

Living in assisted living vs staying at home with a reverse mortgage:

	Selling	Staying in home with a Reverse Mortgage
Details: Home Value $200,000; 80 year old borrower		(reverse mortgage funds available will depend on age, generally the older one is more funds available and the program chosen)
Third Party Closing Costs	$1,811	$1,811
Less Real Estate Agent/RM Origination Fee & FHA Mortgage Insurance Premium	$12,000 (6%)	$8,000 (2% origination + 2% FHA MIP)
Net Proceeds	$186,119	$102,788 in line of credit; $673 a month tenure-for life of the term of the loan and abiding by the terms of the loan; or term draws structured as needed (based on rates of 2/6/2018; rates change weekly.

Now let’s take the net proceeds and compare living in an Assisted Living to living at home and receiving home care.

Selling and Living in an Assisted Living¹

Living at Home using a Reverse Mortgage²

$186,119 ÷ $3,585 (rent only) = $43,020/year or 4 years 4 months

No remaining equity from home.

No rent or mortgage payment as long as you live in the home as your primary residence

The tenure draw of $673 would cover property charges

Borrower is still responsible for household maintenance, i.e., taxes, insurance, utilities and stay in your home as long as primary residence (i.e., approximately $585/month for a $200,000 home)

May have retained equity depending on how long you stay in the home and the home appreciation. The loan is non-recourse.

$186,119 ÷ $4,989 (rent and Home Care) = $59, 868/year or 3 years 1 months

No remaining equity from home.

Roof over head; funds to cover home care 1 with term draws from RM = 5 years 4 months³

Additionally it is likely that there would still be retained equity in the home after the 5.3 years. (Based on 4% appreciation $99,318 in equity would be remaining.)

$186,119 ÷ $6,861 (rent and Home Care 2) = $82,332/year or 2 years 3 months

No remaining equity from home.

Roof over head; funds to cover Home Care 2 with term draws from RM = 3 years 4 months³

Additionally it is likely that there would still be retained equity in the home after the 3.33 years. (Based on 4% appreciation $93,098 in equity would be remaining.)

Then where will you go?

Some assisted living will accept Medical Assistance or other public programs such as Elderly Waiver, however, your choices may be less.

You can stay in your home and have a roof over your head without rent or mortgage payment even after funds from a reverse mortgage are used.

Medical Assistance or other public programs such as Elderly Waiver or Alternative Care can be received even with a reverse mortgage. Reverse mortgage does not impact receiving Medicare or Social Security.

1These rates do not take into consideration rent increases (3%-4% annual according to Genworth Financial, Inc.); it’s likely that the number of years the net proceeds would cover will be less.
2With the reverse mortgage there is a growth rate factor that is passed along to the borrower.
3This time can be extended if you are receiving Medical Assistance or other public programs such as Elder Waiver or qualify for Medicare covered Home Care.

You have choices and can have control over where want to live and the care you receive. You have the right to say, I want to stay in my home (or keep my parents in their home). When educated and with a plan for the journey, life will be easier.

If you’d like to remain at home and have funds for financing your home care, 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.

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

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.

Should you do a HECM Reverse Mortgage or leave an inheritance?

Posted on May 22, 2017 by Beth Paterson, CRMP

Leaving home as inheritance with reverse mortgage? “I want to leave an inheritance for my kids.” “I want my son to get my house.” “The reverse mortgage will eat up my inheritance.” “The reverse mortgage isn’t good for the kids.” “The reverse mortgage should only be done with those who don’t have children.” These are statements that are often seen or heard when a reverse mortgage is mentioned.

My questions are, do the children have the money needed to cover the costs of mom’s or dad’s needs today if they don’t have the money and don’t do a reverse mortgage? Will they have the funds in the future when there are needs? Do the children even want the house?

Even financial planners helping their clients have funds for planning their long-term needs who suggest exploring a reverse mortgage hear, “I want to leave the house to my children.”

Let me share a story. As I always do, I have a discussion on the needs and desires of one who is considering a Home Equity Conversion Mortgage (HECM) or a reverse mortgage. In this one particular situation, the woman, Chris*, was living off her Social Security income of about $600 a month. She needed new teeth, new glasses, some new clothes, and her home needed some repairs. She loved going to plays but couldn’t even afford the community plays for $5 to $10. Doing a reverse mortgage would help Chris “live with more” so she completed the application.

Son concerned about inheritance with reverse mortgage A few days later she called to say she decided not to proceed. When I inquired why the change, she replied that her son didn’t want her to do it. After some exploratory questions as to why, she said her son wanted her home after she had passed away so he could rent it out and make money.

How outrageous is this?

Was she really going to do without all the things she needed as basic necessities not to mention just being able to have some money for a few extra things to enjoy life while she’s still alive just so her son could make money off her house after she passed away?

While I was astounded by this response, I kept my tongue in check and calmly asked her if her son was going to provide the money she needed now or was she going to do without the glasses, teeth, clothes, and home repairs so her son could benefit after she passed away. She said, “Of course not, he doesn’t have the money to help me.”

In another situation, the daughter was living with her parents, Gale and Glen*, helping them around the house and with their care. The couple decided to do the reverse mortgage to pay off their current mortgage because when something happened to one of them the other could not afford to make the monthly mortgage payments on their current conventional mortgage.

The daughter was concerned about where she’s going to live when both of her parents are no longer in the home as their primary residence. Even without her parents doing the reverse mortgage, with their current mortgage in place, she would have to figure out a way to pay off that mortgage to remain in the home.

Is living from Social Security check to Social Security check just to get by and maybe doing without some of the things in life that give dignity such as having lunch with friends, getting one’s hair done, or having cable TV really a good option over a reverse mortgage?
Maybe you have some savings, funds in retirement plans, is it enough to cover your long-term care needs?
Why should one be more concerned about leaving an inheritance than having their independence and control of their life and living comfortably?
Why do children think they deserve an inheritance rather than their parents being able to live comfortably, have security, independence, dignity and control of their lives?
Aren’t these the same things every one of us wants?
Why would one deny your parents of living life comfortably?

Even if one’s children are able to help their parents financially today, do their parents really want to be dependent on their children? What happens if “life happens” to their children, they lose their job, get sick, have to come up with money to pay for their kid’s college, etc. and they no longer have the funds to help their parents? This can impact everyone!

Reverse Mortgage provides funds for enjoying life Maybe one doesn’t have immediate needs for funds as Chris did. In planning for the future, using the reverse mortgage line of credit that grows over time, could be beneficial to provide funds when those needs arise. The reverse mortgage funds could mean one doesn’t have to tap their other retirement funds or they could supplement them.

What if one needs home care or has medical expenses? Why should one do without needed care so they can leave an inheritance? Why do children think they should receive an inheritance over their parents having the dignity of paying for their own care and expenses?

If one moves into senior housing, whether independent living, assisted living or skilled care, does one really think there will be funds left to leave for an inheritance? Or will the children have to help pay for the senior housing? Whether private pay or services paid by Medicaid or other government funds, there may not be an inheritance.

And whose money is it anyway? Who should benefit from the use of funds or assets that the senior worked so hard for? Shouldn’t the money and assets be used for whatever one’s parents need or want?

Many seniors say, “My kids are doing better than I am.” This is often the case but even if this isn’t the case, why should one be concerned about leaving money after their gone?

A reverse mortgage is a loan against one’s home to allow seniors 62 and older to remain in their home with security, independence, dignity and control. The most common, and only one available in Minnesota, is the FHA insured HECM. The reverse mortgage offers many benefits including:

No monthly mortgage payment requirements (one must abide by the terms of the loan including paying paying property taxes, keeping hazard insurance on the home and abiding by the terms of the loan)
Income or credit are not used to qualify for a low interest rate.
The loan is due and payable when the home is no longer the primary residence of the borrower(s) or on the 150th birthday of the youngest borrower.
As a non-recourse loan, if the loan balance is higher than what the home can be sold for at fair market value, the borrower or their estate are not responsible for the difference. And the opposite is true too, if the loan balance is lower than what the home is sold for, the borrower or their estate receives the difference.
The borrower remains the owner of the home with the title staying in the name of the borrower(s).

In addition, the reverse mortgage has many protections, likely more than any other financial product or service. To learn what these are read, “You Need To Know Reverse Mortgage Borrowers Are Highly Protected.”

I’m happy to say Chris did proceed with her reverse mortgage. And for years afterwards I received at least one call, sometimes a couple calls, a year saying she’s so relieved to have the money to meet her needs. Besides the initial needs, she has had funds to fix her car when it needed some repairs, to cover some medical expenses and she had funds to take a trip to attend a family wedding. And yes, she’s even enjoying the community plays every now and then.

Once Chris passes away her son will have the opportunity to keep the home by obtaining a conventional mortgage to pay off the reverse mortgage. If he’s renting the property out, the rent payments he will be receiving will cover the mortgage payment – he could still make money if priced accordingly. In the meantime Chris is remaining in her home with the security, independence, dignity and control she deserves and enjoying her life.

For Gale and Glen’s daughter when they are no longer in the home, if she wants to stay in that home, she would need financing to pay off her parent’s reverse mortgage. This may be done by obtaining conventional loan, a reverse mortgage if she qualifies, or from funds as a beneficiary of a life insurance policy or other retirement programs.

So what do you think is better? Doing without today just so a child can have an inheritance or the senior being able to fulfill one’s needs and wants while they are alive?

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

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-1ud

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

Posted on April 1, 2017 by Beth Paterson, CRMP

Couple benefits from eliminating monthly mortgage payments There 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.

Traveling: 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.

Funds 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?

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.

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

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

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

Posted on March 11, 2017 by Beth Paterson, CRMP

Senior Homeowners Benefit From Reverse Mortgages Are 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.

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 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 person 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.

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.

Giving Thanks For The Opportunity To Make A Difference

Posted on November 22, 2016 by Beth Paterson, CRMP

Happy Thanksgiving It’s Thanksgiving and the season to reflect and give thanks. I want to take this opportunity to say I’m grateful for all who are in or have been in my life and have touched it in one way or another. I’m grateful for the talents God gave me and my parents taught me to use. And I’m thankful that I have the opportunity to use those talents to assist others and make a difference in their lives.

It’s rewarding to have my reverse mortgage borrowers call and say how much the reverse mortgage has made in their life, for themselves as well as their families. It is because of you, the customer, that I have the opportunity to serve.

This poem is hanging on my office wall as a wonderful reminder it’s because of YOU…

Because the Customer

Because the customer has a need,
we have a job to do.

Because the customer has a choice,
we must be the better choice.

Because the customer has sensibilities,
we must be considerate.

Because the customer has urgency,
we must be quick.

Because the customer is unique,
we must be flexible

Because the customer has high expectations,
we must excel.

Because the customer has influence,
we have the hope of more customers.

Because of the customer,
we exist!

Anonymous

Thank you to my reverse mortgage borrowers, my referral sources, my vendors, my networks and all who help make a difference in the lives of seniors. It is because of YOU I exist and am so rewarded.

May you have a Happy and Blessed Thanksgiving!

Beth Paterson, CRMP
Certified Reverse Mortgage Professional
NMLS #352859

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

Posted on September 15, 2015 by Beth Paterson, CRMP

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

Posted on May 18, 2015 by Beth Paterson, CRMP

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!

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.

Food For Thought to Fulfill Key Roles of Social Workers

Posted on March 4, 2015 by Beth Paterson, CRMP

During March we recognize and honor Social Workers for the value they bring to our seniors.

In a variety of roles, with their knowledge and experience in providing resources, social workers assist our seniors. Social Workers are inspiring to improve lives and assisting with problem solving as well as resolving issues that may negatively impact the community. I’d like to offer some food for thought to fulfill their key roles.

Over ninety percent of seniors want to remain in their home. They are comfortable living in the home and community with their memories where they raised their children, know the neighbors, are familiar with the grocery store and the pharmacy. They feel safe and warm in their familiar surroundings. With the home as their identity it gives them comfort being in their long time home. So let’s talk about a couple ways to help fulfill the desires of seniors, improve their lives and help them stay in their home and their community.

Home care services are an option to help seniors who need some assistance to remain in their home. Everything from short time-frames to 24 hour care, including recovery care and respite care or even nursing level of care is available. Home care services can help seniors live at home indefinitely. The one-to-one ratio of care versus 1.5 or more of care per person in a nursing home offers safety.

Their services offer:

Companionship and socialization – home care aides can watch TV with them, play cards, do their hobbies, take seniors to the movies or watch them at home, shopping, or even travel with them.
Ensuring meals are prepared and eaten even providing someone to talk with during the meal
Medication reminders
Bathing, housekeeping, running errands
Escorting to appointments
Anything needed to maintain their life in their home

An assumption is often that one needs to move to assisted living, a nursing home or care center. What is not realized is that rent in assisted living can be $3,000 to $4,000 per month. Additionally home care services are added on to the rent bringing the monthly costs to over $5,000 to $8,000. Nursing home care can run $6,000 to $12,000 a month depending on a single or double room, the facility amenities and level of care.

Wondering how to pay for home care and keep the seniors in their home? A reverse mortgage may be the solution. A reverse mortgage is a home equity loan with special terms for senior homeowners 62 and older. Reverse mortgage facts are:

Borrowers own home, no one else does.
Seniors can stay in their home as long as it’s their primary residence (in the case of a couple as long as one is still in the home).
Borrowers won’t lose their home because of a reverse mortgage if they abide by the terms of the loan – they don’t have to make monthly mortgage payments but do need to pay property taxes, hazard insurance and maintain the property or they may face foreclosure.
Funds are generally not considered income for tax purposes.
Loan is government insured and guaranteed to be there for them.
There is no personal liability to them or their heirs when the loan is repaid, as a non-recourse loan the loan is repaid from the property only.
They or their heirs get to keep any remaining equity after the loan is paid off if the home is sold for more than the loan balance.

Consider this…

They can access more funds if their mortgage is currently paid off or has a low balance.
Their cash flow improves when their current mortgage or lien payment is eliminated.
They’ll have extra cash for whatever they need or want!
They can still receive Medical Assistance, Elderly Waiver or other public benefits and do a reverse mortgage.

I have often heard how seniors and their families have benefited from using a reverse mortgage to pay for home care. “Once we realized that we could only relieve the stress on us by contracting 24-hour [at home] nursing care for grandma, a reverse mortgage was the only way to do it.” Liz wrote me. Another borrower, 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.

Ruth had ALS and wanted to stay in her home until she passed. Working with her Social Worker and home care company she did a reverse mortgage. Last week I received a call from her daughter telling me her mom had passed away in her home as she desired. The reverse mortgage had helped her fulfill the dream of her staying in her home and receiving the 24-hour care she needed.

Giving seniors the freedom to stay in their home fulfills their desires of remaining in their home close to their memories and familiar surroundings. Social Workers offering home care and reverse mortgage options fulfill the Social Workers role of inspiring to improve lives, assisting with problem solving and resolving issues as well as having a positive impact on the community.
Happy Social Work Month to all our social workers!

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.

We Were Able To Use A Reverse Mortgage To Purchase Our Beautiful New Home

Posted on August 12, 2014 by Beth Paterson, CRMP

HECM for Purchase allows one to buy a new home with a reverse mortgage “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.”

This was comment I received from Mike after they closed on their HECM for Purchase (H4P) and moved into their new home.

Mike and I had originally talked about 6 years ago when he and Carol were considering a reverse mortgage on the home they had lived for many years. For various reasons they decided to wait. We did talk periodically and I kept them informed of product changes. When Carol was having some issues navigating the stairs they had in their home they decided that it would be better to find a home without all the stairs. This is when I introduced them to option of using use the reverse mortgage to purchase the new home.

Their search ensued until they found a beautiful townhome not too far from their current home in Minnesota but easier for Carol to navigate now and into the future. Still interested in the idea of not having a mortgage payment, we met and discussed the H4P so they would have an understanding of the program. We also met with their real estate agent and the builder to educate them on how this unique option worked.

Like it did for Mike and Carol, the HECM Home Purchase Program provides financing to those who desire to re-size, move closer to children or purchase a new home without having mortgage payments.

The advantages of using a reverse mortgage to purchase a home:

There are no monthly mortgage payments required (borrowers are responsible for paying property taxes, insurance and maintain the property).
Preserves cash savings and investments rather than liquidating savings and investments to pay all cash for the home purchase.
It is a way to leverage funds to make it possible to purchase a higher valued home.
Provides financing so one can re-size to a lower maintenance home, one-level home, a home more suitable for aging in place, move to be closer to children or even purchase one’s “dream home.”

Keep in mind, a reverse mortgage is a mortgage but has special terms for those 62 and older. It offers the most flexibility on how the funds are received and when the loan needs to be repaid.

The steps to do purchase a home with the reverse mortgage are the same as with the regular reverse mortgage. However there are some unique points for this beneficial home purchase option that one needs to be aware.

Eligibility requirements:

All borrowers going on title must be 62 years old or older.

The properties that qualify must be residential and include:
- single family
- 1 to 4 family dwelling units if the borrower/owner resides in one unit
- FHA approved condos or manufactured homes that meet HUD’s standards

To determine how much is available from the reverse mortgage for the purchase, we run our calculations on the lessor of the final appraised value, sales price, or FHA mortgage limit for a one-family residence (currently $625,500).

For example, if the purchase price is $250,000 and the appraised value is $275,000, we would use the $250,000. Or if the purchase price is $285,000 and the appraised value is $275,000, we use the $275,000.

The proceeds available to the borrower are calculated the same way as with any reverse mortgage, having all the closing costs (origination and FHA MIP, reports, title and escrow/settlement fees) included in the loan so there are no out of pocket expenses other than the appraisal and potentially any inspections. The “Net Principal Limit” is the amount available to the borrower after costs.

Note: When I’m working with those exploring homes, I run several calculations at various possible home values so when the borrower and their real estate agent are looking for a home, they will have an idea of the home value and the cash the borrower will need at close.

The borrower will need to have the difference between the Net Principal Limit and the purchase price available. For example:

If the purchase price and the appraised value is $275,000 and the Net Principal Limit is $165,000, the borrower will need $110,000* to purchase the $275,000 home.

Rather than using all reverse mortgage funds, more personal funds can be used for the purchase so the reverse mortgage can be set up with a line of credit option. (HECM LIBOR option only; the fixed rate requires you to pull all available funds at close and does not offer the line of credit option.)

For example, if a borrower has $150,000 in funds they want to use to purchase the same $275,000 home, they could combine their $100,000 with the $165,000 from the reverse mortgage proceeds to purchase the home and then have $40,000 in their reverse mortgage line of credit.

The funds the borrowers use must be from cash on hand, cash from the sale, liquidation of assets or Gift funds (must meet HUD’s approved funding sources and source of funds needs to be documented).

The additional funds cannot come from Builder incentives, Seller financing, Seller contributions or concessions, any person or entity that financially benefits from the transaction or third party that is directly or indirectly reimbursed by any of the parties benefitting in the transaction or Credit Card advances, sweat equity, trade equity, rent credit. Purchasers cannot use loan discount points, interest rate buy downs, closing cost down payment assistance, gifts or personal property given by the seller or any other party involved in the transaction. Seller can pay their share of taxes and Home Owner Association fees if applicable.

The borrower may choose any of the options/interest rate options:
- HECM Adjustable
- HECM Fixed

For calculation purposes our rates change every week. The rate cannot be confirmed until the week of closing. However, on the adjustable rate LIBOR we have a Principal Limit Rate Lock which means we can use the rate at the time of application or closing, whichever is the most favorable to the borrower. For the process of planning how much will be available to the borrower, I initially use the rate and amount of the program chosen at the time of application.

Seller has to be the owner of record for 90 days prior to the date of the sales contract (based on when recorded). (This is to protect against property flipping.)

Prior to completing an application HUD requires the Certification of Occupancy.

The Original Purchase Contract or Certified Copy of the Purchase Contract is needed for underwriting.

Counseling must be completed by a HUD approved HECM counseling agency that has been approved to provide reverse mortgage counseling. Minnesota requires that the counselor be located in Minnesota. We will provide a you a list of HUD approved counselors.

The property must be livable at the time of closing. Any required repairs must be completed prior to closing by the seller – no repairs or repair set asides are allowed.

Funds are provided at closing, as there is no rescission period.

The new property has to be the primary residence and occupancy must happen within 60 days of closing.

One’s existing home may be retained as rental property or if purchasing current home prior to the sale of existing home, income verification will be required to document the ability to maintain both properties. (This is prevent the practice of “buy and bail.”)

Using the reverse mortgage to finance the purchase of your new home may be your solution to meeting your goals without having a monthly mortgage payment.**

Like Mike and Carol, if you or someone you know are 62 or older and want to…

…downsize
…move to a townhome so they don’t have to do the yard work
…move to a one-level home
…move closer to their children
…move to a larger home to have space for when their family comes to visit

The HECM for Purchase program may be your financing option!

*You may also need funds for property taxes, initial hazard insurance premium, home owner association dues, etc.
**Borrowers are still responsible for paying property taxes, hazard insurance, maintaining the home and abiding by the terms of the loan.

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:

– See more at: http://rmsidac.com/beths-reverse-mortgage-blog/#sthash.3C3ljz4F.dpuf

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:

– See more at: http://rmsidac.com/beths-reverse-mortgage-blog/#sthash.3C3ljz4F.dpuf

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.

This site or information provided is not from, or approved by, HUD or FHA or any US Government Agency or Department. – See more at: http://rmsidac.com/#sthash.vv8MiYI8.dpuf

This site or information provided is not from, or approved by, HUD or FHA or any US Government Agency or Department. – See more at: http://rmsidac.com/#sthash.7ZcOk1EU.dpuf

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:

– See more at: http://rmsidac.com/beths-reverse-mortgage-blog/#sthash.3C3ljz4F.dpuf

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

Posted on July 2, 2014 by Beth Paterson, CRMP

Using A Reverse Mortgage for Freedom, Life, Liberty and the Pursuit of Happiness As 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 life I’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:
- 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 mortgage A 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.

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.

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

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

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Minnesota Reverse Mortgages SIDAC

Minnesota Reverse Mortgage Information, Facts and News from the Experts Excelling in Service

Tag Archives: Care Management

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Giving Thanks For The Opportunity To Make A Difference

Because the customer has a need,
we have a job to do.

Because the customer has a choice,
we must be the better choice.

Because the customer has sensibilities,
we must be considerate.

Because the customer has urgency,
we must be quick.

Because the customer is unique,
we must be flexible

Because the customer has high expectations,
we must excel.

Because the customer has influence,
we have the hope of more customers.

Because of the customer,
we exist!

We Were Able To Use A Reverse Mortgage To Purchase Our Beautiful New Home

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

Because the customer has a need, we have a job to do.

Because the customer has a choice, we must be the better choice.

Because the customer has sensibilities, we must be considerate.

Because the customer has urgency, we must be quick.

Because the customer is unique, we must be flexible

Because the customer has high expectations, we must excel.

Because the customer has influence, we have the hope of more customers.

Because of the customer, we exist!

Because the customer has a need,
we have a job to do.

Because the customer has a choice,
we must be the better choice.

Because the customer has sensibilities,
we must be considerate.

Because the customer has urgency,
we must be quick.

Because the customer is unique,
we must be flexible

Because the customer has high expectations,
we must excel.

Because the customer has influence,
we have the hope of more customers.

Because of the customer,
we exist!