Tag Archives: Lenders

Respect for Oneself Increases With A Reverse Mortgage

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Satisfied MN Reverse Mortgage Borrower“A reverse mortgage has brought me bountiful solutions to resolving financial issues.  Its benefits enabled me to achieve the means to better enjoy living in my own home.  The equity available was spent in several areas for home improvement.  Included were remodeling of my bathroom, new carpeting throughout my home, and installment of a sump pump to prevent basement floodings.  Herewith also personal challenges, as a pledge to my church fulfilled and travel to family weddings and reunion assured.

“With a reverse mortgage you begin to have independence anew and you begin to feel more secure.  Being free from monetary anxiety, you have better control over spending your equity.  Thus a respect for yourself increases.”

Letter from MN Reverse Mortgage BorrowerThis is a letter I received from a borrower who had taken out her reverse mortgage over 5 years ago.  Through the years I have heard from other borrowers on how the reverse mortgage has made a difference in their lives.

Another borrower called a couple weeks ago to tell me that they are moving into a care center because of with his Alzheimer’s she can’t care for him and it’s not safe for him at home any longer.  As we talked she told me how thankful she was for the reverse mortgage and what a difference it and I have made in their life.  They did their initial reverse mortgage over 8 years ago and we refinanced it for them about 3 years ago.  For years the funds from the reverse mortgage allowed them to maintain their lifestyle and go to Florida and escape the Minnesota winters.  No longer able to make the trip to Florida they have used their funds for other needs including medical expenses and home care allowing them to stay at home as long as they could.

Reverse Mortgage Made Difference for MN Man

Reverse Mortgage Made Difference for MN Man

Dick really wanted to stay in his home of many years.  The reverse mortgage funds were used for home improvements and allowed him to participate in a mission trip.  Since his reverse mortgage was taken out in 2002 he has called and shared how the reverse mortgage has helped him live his life comfortably and to stay in his home as he desires.

The reverse mortgage has helped seniors retire and still have funds for their lifestyle.  Using the funds for home repairs has helped seniors keep up their home so they could remain in the neighborhood where they are familiar.  Other times the reverse has been considered a life saver to pay for home care and keep the senior at home where they are most comfortable.

I have specialized in reverse mortgages since 1999 and have helped hundreds of seniors stay in their home with security, independence, dignity, and control.  I hope to continue to receive the letters and calls from my borrowers on how the reverse mortgage and I have made a difference in their life.  It’s a good feeling knowing that seniors have a better life and more respect for themselves.

For more articles on how reverse mortgages have helped seniors, read:

© 2010 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-es

 

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.

Irrational Statements Show Ignorance of Reverse Mortgages

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Makes Irrational Reverse Mortgage StatementsHave you made or heard these statements?  “Stay away from reverse mortgages!”  “I wouldn’t recommend a reverse mortgage.”  “It’s the worst thing you could do.”  “Reverse mortgages are a scam.”  “Don’t do it!  Too many things can go wrong.”  “Reverse mortgages only benefit the banks.”  “The bank owns the home.”  “You can outlive the mortgage.”  These statements get my ire up because it shows people making these statements don’t know what they are talking about when it comes to reverse mortgages.

Let me give you the facts:  A reverse mortgage is a mortgage just like any loan against the home but it has special terms for seniors 62 and older.

  • There are no income or credit score requirements to qualify.
  • No monthly payments required.
  • There is no limitation on how the funds can be used.
  • Funds can be received in monthly payments structured as needed, line of credit (with a growth rate), lump sum, or a combination of these.
  • Social Security and Medicare are not affected because it is a loan.
  • Medicaid can still be received with the reverse mortgage.
  • Borrowers can stay in the home as long as it is their primary residence or in the case of a couple as long as one borrower is still in the home as their primary residence.
  • The loan is non-recourse which means there is no personal liability to the borrower or their heirs if they are not retaining ownership.  So they don’t have to come up with the difference if the loan balance is higher than what the home is be sold for as long as they are not retaining ownership.
  • At the time of sale if the home is sold for more than the loan balance, the borrower(s) or their heirs receive the difference.

Just like any mortgage, borrowers still have the title and are responsible for property taxes and insurance, association dues (if applicable), maintaining the property and abiding by the terms of the loan.

FHA offers and insures the majority of reverse mortgages known as the Home Equity Conversion Mortgage, or HECM, making it the most highly regulated mortgage available.  Lenders are regulated by RESPA (Real Estate Settlement Procedures Act) and HUD (Housing and Urban Development).  Funds are guaranteed by HUD.   Application and Closing documents include many disclosures, in fact at the time of Application it is required that sample closing documents be provided to the borrowers.  Additionally, all borrowers are required to go through third-party counseling by HUD approved counselors.

Fees are regulated and only HUD allowed fees are permitted with no mark-ups.  Even though many times they are considered expensive or high the compare to conventional loans, in fact the difference comes down to FHA Mortgage Insurance Premium.  You can see a comparison of the costs in my article, “Reverse Mortgage Costs – High or Mythical?”

In the last few years HUD and RESPA have implemented more regulations and protections.  And recently HUD has been charging those who have not followed these regulations and even pulled their licensing.

Happy MN Reverse Mortgage Borrower

Happy MN Reverse Mortgage Borrower

The reverse mortgage has been a life saver for many.  According to an AARP report 93% of the borrowers are satisfied.  Based on a survey of our borrowers our company has 100% satisfaction.  I just talked with one borrower last week who told me the reverse mortgage has made a huge positive difference in her and the one her sister had made a big difference in her life also.  (Her sister has now passed away.)  One day we received a call from a man who said, “I want a reverse mortgage because since Jim got his, he’s a new man.”  Some of my other Blog posts share other stories on how the reverse mortgage has made a difference in the lives of seniors: “Finance Retirement With A Reverse Mortgage,” “Know A Senior Who Wants Security, Independence, Dignity, and Control?  A Reverse Mortgage May Be The Answer!” “Reverse Mortgages Finance Home Care,” and  “Reverse Mortgages Answers Prayers.”

I’ve posted some Blog articles addressing the media’s attacks on reverse mortgages, “The Media Needs The Reverse Mortgage Facts,” “But Wait, There’s More… Reverse Mortgage Facts The Media Needs To Know,” and “It Is NOT Reverse Mortgage Fraud When…”  It’s obvious the public needs these facts too when they make the statements that are in the opening paragraph.

When people make such irrational statements they don’t know what they are talking about.  The reverse mortgage is not right for everyone but everyone has the right to get the details and facts so their decision can be based on the truth, not on opinion.  As asked in my Blog, “When You Don’t Know What You Don’t Know About Reverse Mortgages,” would you go to a plumber for health problems?  And to expand on that, would you go to a general practitioner if you have heart problems?  No, you would go to the specialist.  So before making or believing such irrational statements, contact a specialist and get the facts.  Our website, www.RMSIDAC.com is full of information and facts and if you are in Minnesota we’d love to provide the facts for you via phone or in person.

© 2010 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-e9

 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.

A Reverse Mortgage Or A Conventional Mortgage For Senior Homeowners? That Is The Question.

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Calling for MN Reverse MortgageThe call comes in:  “I took a loan out 3 years ago and now I want a reverse mortgage because I can’t make the payments.”  I respond, “Great, the reverse mortgage eliminates mortgage payments and allows borrowers to stay in their home.”   I define that a reverse mortgage is a mortgage like any other loan but with special terms for seniors 62 and older and borrowers still have the title and are responsible for property taxes and insurance, association dues (if applicable), maintaining the property and abiding by the terms of the loan.  Then I also review some other details of the reverse mortgage including that:

  • There are no income or credit score requirements to qualify.
  • No monthly payments required.
  • There is no limitation on how the funds can be used.
  • Funds can be received in monthly payments structured as needed, line of credit (with a growth rate), lump sum, or a combination of these.
  • Social Security and Medicare are not affected because it is a loan.
  • Medicaid can still be received with the reverse mortgage.
  • The loan is non-recourse which means there is no personal liability to the borrower or their heirs if they are not retaining ownership.
  • If the home is sold for more than the loan balance, the borrowers or their estate keep the difference.

Then after further discussion and review of their situation, I state, “Let me get some information so I can see how much reverse mortgage proceeds there are in your situation.”

The reverse mortgage needs to be in first lien position which means any current liens need to be paid off with the reverse mortgage.  There needs to be enough funds from the reverse mortgage to do this.  Often when a mortgage was done a few years ago, when I run the numbers I often find there aren’t enough proceeds to pay off their current mortgage.  Sometimes they are only short a few hundred dollars and they can come up with the funds needed to do the reverse mortgage (sometimes it’s only a matter of a monthly payment).  Other times they are short thousands.  For one couple who called a couple of weeks ago they were short over $40,000 to pay off their current mortgage.  Once I run the calculation with these scenarios I then have the difficult call back to tell this senior that the reverse mortgage is not an option.

I often hear of 70 and 80 year olds who are taking out a 30 year conventional mortgage and then they have to work in order to make the mortgage payments.  What happens when they can’t work and can’t make their mortgage payment?

I wish they would get the facts on reverse mortgages and get over their fear and do the reverse mortgage instead of a conventional mortgage in the first place.  Instead of doing the conventional loan, if the reverse mortgage would have been done originally the senior would be in a different situation now – a much better one.

Lower home values and higher loan balances contribute to the issue.  While the reverse mortgage rate is historically lower than conventional mortgages and the reverse mortgage has many benefits over conventional loans, there was a fear that made the senior take out a conventional mortgage instead of a reverse mortgage.  Then “life happens” and we get the call and we often have to deliver the bad news, not enough reverse mortgages funds to pay off the currant mortgage.

Closing costs are comparable (See my Blog, “Reverse Mortgage Costs – High or Mythical’), interest rates historically lower, so in the big picture the reverse mortgage costs less.  No monthly payments and options on how the funds can be received, the guarantee of funds and non-recourse features all make a reverse mortgage a better choice for seniors.

Even if one can qualify for a conventional loan today, when “life happens” (health, medical issues, can’t or don’t want to work any more, home repairs or modifications needed) and the monthly payment can’t be made, the seniors get into the balancing act of,  “Do I make my mortgage payment or pay my other expenses.” and if they can’t or don’t make the payments they’ll be at risk of foreclosure.  With the reverse mortgage this risk goes away because no monthly payments are required so they don’t have to worry about deciding between paying the mortgage or their other expenses.

Let’s look at one senior couple.  Four years ago they took out a conventional loan for $25,000 to meet their immediate needs.  Last year because they needed more funds they looked at a reverse mortgage.  Based on their home value of $120,000 and their age they would qualify for $75,000 in reverse mortgage funds, closing costs of $9,000 and a lower interest than their current conventional loan or than what they would qualify for on a new conventional loan.  (Remember to qualify for a conventional loan income, credit, assets and risks are taken into consideration to determine interest rate.  The reverse mortgage interest rate is not affected by income, credit, or assets.)

Yes, the closing costs on the $25,000 conventional loan were lower than the reverse mortgage because the conventional bases the fees on the amount received, $25,000 in this case and the reverse mortgage bases the fees on the full home value – this is because over time they can be access the full home value or even more than the home value.  In their situation the initial loan closing costs were $3,000 for the conventional loan.

With the reverse mortgage they would have had a lower interest rate, no monthly payment requirements and funds in a line of credit that would grow so more would be available for future needs.  One can’t get these benefits with any other loan.

They decide against the reverse mortgage and to do a conventional loan for another $25,000 and pay closing costs of another $3,000.

Now let’s look their situation in another two years:

  • They initially accessed $25,000 with closing costs of $3,000
  • The 2nd loan they accessed for another $25,000 with closing costs of another $3,000 totally $50,000 in funds received and $6,000 in closing costs.
  • Looking at their financial history, in another 2 years more than likely they will be contacting their bank for another loan.  So at this point their situation would be (if they can even qualify) another $25,000 and another $3,000 in closing costs totally accessing $75,000 and a total of $9,000 in closing costs.  This doesn’t include the interest rate expense that would be higher than on a reverse mortgage.

They would have been smarter if the reverse mortgage would have been done initially or at least at this point in time.  Over time would have been able to access more than $75,000 including the growth rate, closing costs would have been the same and interest expense would have been less.  In addition they would not have had to make payments, improving their cash flow through the years, the funds would be guaranteed for them, and the reverse mortgage is non-recourse so in the end they only pay what the home could be sold for without having to come up with the difference, or they get to keep any remaining equity if the home is sold for more than the loan balance.  (On a conventional loan the borrower or the estate could be responsible for the difference if the loan balance is higher than what the home can be sold for.)

And a few years from now they may not qualify for a conventional loan so they would have paid the $6,000 in closing costs to receive $50,000 and have made payments through the years.  Then when “life happens” and they can’t afford those payments, they could be facing foreclosure, and maybe not qualifying for a reverse mortgage.  And if they do qualify for the reverse mortgage, they will then have to pay the closing costs adding the closing expense on top of what they have already paid.  All in all, the reverse mortgage would have been less expense in the long run.  View “Is Waiting To Do A Reverse Mortgage The Best Decision” for a comparison of funds now or in the future.  It’s important to note that their banker thought that the reverse mortgage through us was a much better option for this couple.

Satisfied MN Reverse Mortgage Client

Satisfied MN Reverse Mortgage Client

Marlene who initially did a conventional mortgage and then turned to us to do a reverse mortgage said when she did the conventional loan she didn’t understand the reverse mortgage and so was afraid to do it.  At the reverse mortgage closing she said she wished she had done the reverse mortgage in the first place.  She’s just glad that we were able to help with the reverse mortgage when we did.

In conclusion, when one is in their senior years the reverse mortgage is generally a better choice than a conventional mortgage, even if they do qualify for a conventional loan.  If one does the reverse mortgage instead of a conventional loan their retirement years will be so much smoother, less stressful – they’ll have peace of mind along with security, independence, dignity, and control.  And when at a future date they do decide to do a reverse mortgage we won’t have to deliver the bad news that there aren’t enough funds to pay off a current mortgage.  They should have done the reverse mortgage in the first place.

© 2010 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-cz

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.

Changes With The Good Faith Estimate Leave Reverse Mortgage Borrowers Confused And At Risk

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Reviewing Reverse Mortgage Fees

Reviewing Reverse Mortgage Fees

As we welcome in the new year we are also looking at many changes with reverse mortgages.  The first of which is the New RESPA (Real Estate Settlement and Procedures Act) requirements.  These include a new Good Faith Estimate (GFE) and HUD-1 (closing Settlement Statement).  (Note, these RESPA changes apply to conventional loans also – so if you are looking are refinancing or purchasing you’ll want to be familiar with them too.)  The intent is to make it easier for borrowers to compare fees between service providers, application and final HUD-1 Settlement Statement fees, and disclosure of yield spread premiums or lender paid fees.

With the new regulations a GFE will ONLY be provided with an actual application.  It is no longer allowed for the informational or quote package to include a GFE.  The borrowers are at risk because they may just want to receive estimates on the fees when they request a GFE, and not knowing the new regulations they will be signing an application and the broker/lender may start processing the loan even before they’ve made a final decision – especially the unethical originators and lenders.  Besides the info needed for information purposes such as name, address, birth dates, home value/estimated home value, amount of balance of current loans, information that will trigger the application include the Social Security Number, monthly income and assets and other pertinent personal information.  This information should NOT be provided until lender is chosen and ready to proceed with an application.

Included are now three fee categories on the GFE:  those that cannot change, those that have a 10% tolerance, and those that can change without restrictions.  There are areas of allowance for “Changed  circumstances” which will include:

  • Fees that may change due to a difference in the appraised value include, i.e. origination fee, FHA Mortgage Insurance Premium, Title Insurance, MN Registration Tax, inspections, surveys, certifications, etc.
  • Required services not known prior to the application, such as but not limited to roof, foundation, engineering inspections or certifications, and surveys.
  • Recording fees for unknown liens, mortgages, loans, judgements, title changes such as deeds, trusts, death certificates, Power of Attorney, and release fees, etc.
  • Required services by providers chosen by borrower rather than the lender, such as title services and fees, title insurance, and notary fees
  • Other circumstances particular to the borrower of transaction, including the need for flood insurance or environmental problems
  • Acts of God, War, disaster or other emergency
  • Changing from one product to another.
  • Home Owners Insurance

Signing Reverse Mortgage ApplicationA new GFE will need to be provided to the borrower within 3 days for these changes to be permitted at closing.  It is the broker/lender’s responsibility to disclose and document the disclosure of the new GFE to the borrower(s).  If not disclosed properly, the broker/lender will have to pay the difference, it cannot be charged to the borrower(s).

At the time of inquiry and for information purposes only, we, Prestige Mortgage/Reverse Mortgages SIDAC, will, as we have always done, be providing an explanation of closing costs.

While we have always provided accurate GFE’s (usually within only $100 difference between application and actual fees at closing) you can now expect all lenders to be providing the GFE fees to be the same as at closing.

Unfortunately in the process of trying to make sure all fees are disclosed to borrowers the new 3 page GFE (formerly 1-page)  is more complicated and will be more confusing for borrowers.  We will do our best to help borrowers understand the fees, changes, and forms.

Review a comparison of Minnesota Reverse Mortgage costs to conventional loan fees in the post, “Reverse Mortgage Costs – High or Mythical?”

© 2010 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-cg

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 Stories To Warm The Heart

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Enjoying retirement with a Reverse Mortgage

Enjoying retirement with a Reverse Mortgage

As we look to staying warm during the winter season,  I thought I’d share with you a few of the many client stories that have warmed my heart through the years showing where the reverse mortgage made a difference in the life of seniors.

There have been numerous situations where I have done a reverse mortgage and saved a senior’s home from foreclosure.  One in particular had already gone through the sheriff sale.  Working with an attorney we were able to help her buy the home back on the last day.  We had to jump through many hoops to make it happen but the client was able to stay in her home of many years.  She was so appreciative!  It always warms my heart when we can help a senior stay in their home as they desire especially saving the home from foreclosure.

Helen really wanted to stay in her home basically no matter what.  Her husband was in a nursing home and she was having some health issues so initially her family wanted her to move to senior housing.  After talking with them and her social workers I tried to convince Helen to move.  Then I received the call from her family saying Helen really wanted to stay in her home and they wanted me to do the reverse mortgage for her.

It was challenging from the standpoint that Helen had some early dementia and couldn’t remember things unless I wrote the answers to her questions under her question – even though the answers were written in my handouts and in my book, the only way Helen could connect the answer to the question was to have them written together.  I remember spending a day, yes over 8 hours, with Helen to explain the details then another day to do the application and there were numerous phone calls and mailings in between.  She had an attorney involved and had set up a power of attorney but Helen was independent enough to want to be involved through the process.  During followup conversations with Helen I found that she did understand the reverse mortgage as a result of my taking so much time with her.

After many conversations with and then with the blessings of her family, social workers, and attorney we did the reverse mortgage for Helen.  She was able to stay in her home until her death about 5 years later.  Through the years I heard from her caregivers on how the reverse mortgage had made a difference for Helen.  When she passed away the family called and asked me to attend her funeral because I had made such a difference in her life.  Helen was one of the most challenging clients for me but it was a good feeling that I was able to help her fulfill her dream of staying in her home and that I had also made a difference for the family.

Lucy needed some extra funds to be able to stay in her home.  She was cutting back on expenses like getting her hair done, cut off her cable TV service, just the little things that can give a person their dignity.  When we did the reverse mortgage for her she was able to receive the services that returned her dignity.  Lucy was a sweet independent woman that I always enjoyed talking with even after the loan was closed.

Fulfillling dream with a Reverse Mortgage

Fulfilling dream with a Reverse Mortgage

Carol had wanted to see a play in England that was going to end shortly after she had contacted me about doing a reverse mortgage.  We closed her reverse mortgage and it was funded on a Wednesday.  Thursday she was on a plane to London to fulfill her dream and see the last viewing of the play that Saturday.  It gave me great pleasure to be able to help her fulfill her dream.

The reverse mortgage allowed Len to retire so he and Mary could live in their retirement home closer to their children.  At the age of 70 Len was still working many hours and it was difficult for him.  He and Mary owned two homes (one close to work and the 2nd close to their children) and was continuing to work in order to make the mortgage payments.  Doing the reverse mortgage allowed Len to retire because by paying off their current mortgages the mortgage payments were eliminated.  Len and Mary are enjoying their retirement living in the home closest to their children as their primary resident, keeping the 2nd home as their vacation home.  I talk with them several times each year and they are so relieved and thankful for the reverse mortgage.  Their family has also told me the difference I have made in their parent’s life.  This situation too warms my heart because of the difference the reverse mortgage has made in their life.

These are just a few of the stories that have warmed my heart – each and every one of my hundreds of clients have touched me in one way.  I feel blessed to be able to make a difference in the lives of seniors and help them stay in their home with security, independence, dignity and control.

Read some other articles with additional stories at: “ Reverse Mortgages Help Celebrate Independence;” “Reverse Mortgages Finance Home Care;” “Finance Retirement With A Reverse Mortgage;” “Reverse Mortgages Answers Prayers;” and “Know A Senior Who Wants Security, Independence, Dignity And Control?  A Reverse Mortgage May Be the Answer!”

© 2010 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-bV

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.

Looking To Relieve Caregiver Stress? A Reverse Mortgage May Be The Answer!

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Are you a caregiver, one who is taking care of a loved one?  And as a caregiver are you also balancing your career, family, home and life activities?  Are you stressed from all of this?  Are you overwhelmed at trying to handle everything and find options to help your loved one?

When taking care of your loved one are you wishing you could focus on being the child or spouse instead of paying the bills, managing the budget, preparing the meals, ensuring their needs are met, medicines are taken, managing the household or being the nurse?  Are you trying to finance their needs along with your own?  Are you wishing you could just sit and visit, read to them, go for a walk, go out for a relaxing lunch, or go shopping instead of dealing with everything else?

A reverse mortgage may be the answer to help you.  With a reverse mortgage you can reduce your stress and hire the assistance from a care manager, companion service, home care agency, daily money manager and/or find services to help with the yard and household chores.  With the services you can return to your role of child or spouse and do the things you enjoy doing with your loved one.

A reverse mortgage is a mortgage with special terms for senior homeowners 62 and older that allows seniors to remain in their home with security, independence, dignity and control.  The advantage for seniors is that there are no income or credit score qualifications and there are no monthly payment requirements.  The borrowers keep the title to the home and are responsible for taxes, insurance, and maintaining the home.  Unlike a conventional loan the low-interest accrues, increasing the balance with no payments due until the home is no longer the primary residence of the borrowers.  In addition, the reverse mortgage is a non-recourse loan which means there is no personal liability to the borrowers or their heirs for repayment if they our their heirs are not retaining ownership.  When there is remaining equity at the time of sale the funds go  to the borrowers or their heirs.

The funds can be used for any purpose, whatever the needs or wants of the seniors.  The advantage to you, the caregiver, is that funds would be available to get the services to help your loved one so they can remain in their home and not depend on you and you can enjoy your time with them rather than being the nurse, the money manger, the cook, the yard worker, etc..

Some of the resources available to assist you include:

  • A care manager who is a professional such as a social worker or health care professional who can assist you or your family to manage the medical, psychological, and social affairs, through assessments, identifying needs, and then planning, coordinating, and monitoring services and resources to assist you in financial, legal, and housing needs.
  • Daily Money Managers can assist with day-to-day finances such as paying bills, balancing they checkbook, sorting the mail.
  • Companion and home care services are services provided in one’s home ranging form companion and basic home chores to medical care such as nursing, occupational, speech, or physical therapy and other medical therapies.  Home Health Care providers may hold licences and provide skilled cares which are done by licensed professionals such as a social worker, nurse, or home care aide and can provide personal care and assistance such as activities of daily living like bathing, dressing, grooming, transferring, toileting.  Companion oar personal care assistants provide companionship and supervision but cannot provide personal or nursing care.  Their services are available from minimal hours to 24 hours and live ins.

So stop being so stressed, look into a reveres mortgage to see if it is right for your loved ones to have the funds for their security, independence, dignity and control.  It could be a wonderful present to yourself.

Other Blog articles you may find helpful:

© 2009 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-bL

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.

Having Our Seniors Share Their Memories, Dreams and Desires To Receive Security, Independence, Dignity And Control

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Home for The HolidaysWith 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!”

How 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?

Sharing MemoriesHave 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.

As 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?

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 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.

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

“Reverse Mortgages Help Celebrate Independence;”

“Know a Senior Who Wants Security, Independence, Dignity, And Control?;”

”Reverse Mortgages Finance Home Care;”

“Finance Retirement With Reverse Mortgages;”

“Be Educated About Your Options of Care and Financing The Care.”

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.

© 2009 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-bt

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.

Be Educated About Your Options of Care and Financing The Care

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Your Road Map for your journey of agingEducation 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.  In mid November I was fortunate to participate in and be considered a trusted advisor at the 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; Minnesota is #1 in the country for working women.

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 and is often the only option; that home care is short term and the nursing home and/or assisted living is safer than being at home.

Receiving Home CareWe need to recondition our thinking to:

  • 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 home care options and assisted living rent and with home care options:

Home Care 1 $1,296/month 3-hour visits, 4 days a week, $27/hour
Home Care 2 $3,024/month 4-hour visits, 7 days a week, $27/hour
Home Care 3 $4,536/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 for 1 person $2,800/month 1-bedroom$3,200/month 2-bedroom Care packages range from $300 to $2,700 and would be above and beyond the rent; additional care would be charged per hour by a home care agency; there is an additional charge for a 2nd person in the apartment
Assisted Living Rent & Home Care 1 $4,096/month One bedroom apartment, 1 person plus additional care at 3-hour visits, 4 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 2 $5,824/month One bedroom apartment, 1 person plus additional care at 4-hour visits, 4 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 3 $7,336/month One bedroom apartment, 1 person plus additional care at 4-hour visits, 4 days a week, $27/hour from home care agency
Nursing Home $6,000 – $12,000/month Single or double room, level of care and facility amenities

Let’s look at selling and moving into an assisted living vs staying at home with a reverse mortgage:

Details: Home Value $200,000; 80 year old (reverse mortgage funds available will depend on age, older one is more funds available)

Selling Staying in home with a Reverse Mortgage
Third Party Closing Costs $2,211 $2,211
Less Real Estate Agent/RM Origination Fee & FHA Mortgage Insurance Premium $12,000 (6%) $8,000 (2% origination + 2% FHA MIP)
Net Proceeds $185,789 $110,108 in Line of Credit; $862/month tenure-for life; or term payments structured as needed (based on rates of 11/24/09)

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

Selling and Living in an Assisted Living1 Living at Home using a Reverse Mortgage2
$185,789 ) $2,800 (rent only) = 5.5 yearsNo remaining equity from home. No rent or mortgage payment as long as you live in the home as your primary residence3Borrower is still responsible for household maintenance, i.e. taxes, insurance, utilities and stay in your home as long as primary residence (i.e. approximately $755/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.
$185,789 ) $4,096 (rent and Home Care 1) = 3.7 years No remaining equity from home. Roof over head; funds to cover home care 1 with term payments from RM = 9.8 years3 Additionally it is likely that there would still be retained equity in the home after the 9.8 years.
$185,789 ) $5,824 (rent and Home Care 2) = 2.6 years No remaining equity from home. Roof over head; funds to cover Home Care 2 with term payments from RM = 3.33 years3 Additionally it is likely that there would still be retained equity in the home after the 3.33 years.
$185,789 ) $7,336 (rent and Home Care 3) = 2.1 years No remaining equity from home. Roof over head; funds to cover Home Care 3 with term payments from RM = 2.1 years3
Additionally it is likely that there would still be retained equity in the home after the 2.1 years.
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 care packages or increases in rent charges so 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, Alternative Care or qualify for Medicare covered Home Care.

Able to Stay in Home with Home CareYou 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,  you will have more choices and life will be easier.

Additional Suggested Reading:

© 2009 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-9A

Note:  This information and these home care and senior housing figures are  reflective of costs in Minnesota and are a compilation provided by the home care agencies at the 2009 Minnesota Private Duty Home Care Conference.  They are approximations and can vary by company, agency, facility and geographic area.

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.

Finance Retirement with A Reverse Mortgage

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Retirement Financed with Reverse Mortgage

Retirement Financed with Reverse Mortgage

Estate planning, protecting one’s investments, traveling, and supplementing one’s income are desires of retirement   Large monthly payments, high interest rates, foreclosures, home repairs and modifications, and medical expenses can all be issues facing seniors.  A solution for those 62 and older to finance their retirement no matter what their circumstances may be a reverse mortgage.

A loan with no income or credit qualifications and no required monthly payments can provide tax-free cash for whatever one wants or needs.* (See below for updates implemented in 2015.)

Larry and Carol did a reverse mortgage so they could pay off their current mortgage and eliminate the payments.  Not having to make payments, Larry was able to retire, a much awaited and deserved event at the age of 70.  With $45,000 remaining in their line of credit, which grows so more money is available to them in the future, and a good estate plan, they can live comfortably without financial pressures.

Wayne and Barb were having financial problems because of high credit card debt and medical expenses.  Even though they don’t have remaining funds, with their reverse mortgage their cash flow has improved because they don’t have to make the monthly payments.  With a plan and a budget, they thanked us stating, “The reverse mortgage has helped us in our time of need to change our financial situation.  It has made a big difference in our lives.”

Working with an estate planner, a reverse mortgage helped Mary plan her retirement so she has funds for emergencies, medical expenses, traveling, leaving something for her heirs, and enjoying life without being dependent on her children.

A reverse mortgage is a loan similar to a conventional mortgage but with different terms to help seniors remain in their home with security, independence, dignity and control.  The borrowers keep the title to the home and are responsible for taxes, insurance, and maintaining the home.  Unlike a conventional loan the low-interest accrues, increasing the balance with no payments due until the home is no longer the primary residence of the borrowers.  In addition, the reverse mortgage is a non-recourse loan which means there is no personal liability to the borrowers or their heirs for repayment if they our their heirs are not retaining ownership.  Remaining equity goes to the borrowers or their heirs.

One can have a trust, life estate, or receive Medical Assistance, Elderly Waiver or other public benefits and use the reverse mortgage for estate planning.  Not considered income, Social Security and Medicare are not affected.

It may sound too good to be true, however, it is a safe way to access cash for retirement and remain in your home as long as you choose.

Enjoying Retirment with His Reverse Mortgage

Enjoying Retirement with His Reverse Mortgage

As Myrna stated, “It is really great not to have to be concerned about where the money will come from for my long term care insurance policy payment and emergency repairs.  It has relieved us of a great deal of stress and makes grocery shopping a lot easier too.”  Reverse mortgages have helped many finance their retirement, how can it help you?

*In April 2015 a Financial Assessment was implemented to determine borrower’s ability and willingness to pay property taxes and insurance into the future.  This safeguard help make the reverse mortgage more sustainable so borrowers can remain in their home.

For more uses of the reverse mortgage, read

© 2009 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-9e

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 Finance Home Care

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Reverse Mortgage paid for grandma's home care

Reverse Mortgage pays for grandma’s 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.

Last week I talked with a daughter who said that moving her dad to a nursing home would “kill him,” causing him to die faster than if he stayed in his home.  I constantly hear, “You’re going to drag me out of here (home) in a wooden box.”  “I want to go home, not to a nursing home,” is a common statement children hear from their parents after a hospital stay.”  But the challenge is how to make this happen.

Are you trying to figure out how to keep a loved one at home and have the financing to meet their needs?  Home care can provide the care and a reverse mortgage may be your financing solution.  The reverse mortgage can help seniors stay in their home and receive the care they need whether it’s long term or short term, a couple hours or 24 hours of care.  Just been released from the rehab center Margaret needed a home health care aide to assist her so she could remain in her home as she recuperated.  The reverse mortgage allowed her to hire the home care agency of her choice.

Did you know for seniors 62 and older, by converting the equity of their home into cash with a reverse mortgage…

  • They own home, no one else does.
  • They 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).
  • They 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 payments.
  • Tax-free money is government insured and guaranteed to be there for them (consult your tax advisor).
  • There is no personal liability to them or their heirs when the loan is repaid as long as they or their heirs are not retaining ownership.
  • They or their heirs get to keep any remaining equity after the loan is paid off.
  • There are no out of pocket costs, income or credit score qualifications for the loan.

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!  For example:
    • Paying for care at home
    • Make home repairs or modifications
    • Cover medical expenses
    • Pay taxes or debts
    • Cover everyday living expenses
    • Strengthen personal and financial independence

Reverse Mortgage pays for Home CareHome care and a reverse mortgage can help fulfill a senior’s wish of staying in their home when some extra help is needed.  Consider the desires of the senior, what are their wishes?  What will make them comfortable and give them peace of mind?  Don’t deny a senior based on your opinion of reverse mortgages.  Don’t let reverse mortgage closing costs scare you, they compare to the costs of conventional loans but with a lot of additional benefits and protections.  If they want to stay in their home, don’t tell them to sell, realize there are solutions right under their roof.

Know the facts about reverse mortgages and work with a lender who has knowledge and expertise in reverse mortgages – it can make a difference for your satisfaction and making your life easier.  I’m proud to have received this statement from Liz whose grandma I assisted with a reverse mortgage:  “We make phone inquiries to 7 different reverse mortgage companies. Beth at Reverse Mortgages SIDAC had the best combination of resources, years in the field, step-by-step explanation of the process, investigating and appraising us of the options, comprehensive written materials sent promptly, advanced sills in communication with us and grandma, and high degree of emotional sensitivity. We were under pressure to have the funds to pay for grandma’s care, so their skillful management of the process proved to be critical. We appreciate Reverse Mortgages SIDAC and would recommend them without reservation.”

© 2009 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-8T

Additional suggested reading:  Be Educated About Your Options of Care and Financing The Care

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.