Helping Your Parents with a Reverse Mortgage

Posted on by Janis Layman

id-10041109Perhaps your parents raised you in the home they are now ambling about. As you see them begin to slow, or have to jump on a plane every time they wish to see you, thoughts of helping them to have an easier time come across your mind. After all they deserve at this time of their life to relax, do what they wish to do, and be able to manage their health and their finances with comfort.

Considering a reverse mortgage is one good option. It gives more wiggle room to work with when balancing the growing needs of health, home, and retirement.

As you discuss the future and it’s possibilities, there are a few questions to ask yourself and everyone else involved.

First, do you or other siblings have concerns about inheritance and/or equity?  Your parents probably care that all of you feel you have received from them as they pass. While this discussion is not always easy, it is undeniably beneficial. Talking will give clarity, which in turn provides direction. It also gives everyone a chance to be heard.

Second, do you have financial resources to help your parents?  Health needs as we age are difficult to determine, but it is important to build in a buffer for the unexpected.  The stress of aging is enough in and of itself, being able to take care of the costs should not have to be an additional worry for those that raised you.

Another good question that only your parents can answer is, ‘What are my parent’s wishes about staying in their home, especially if their medical needs grow?’ For some, they are ready to let go of the home of their youth and family, wanting to change and simplify their lifestyle. For some, being closer to you is the most important desire. And for some staying in their home as long as possible is the most important wish that could be fulfilled. Since the decision about reverse mortgage as a way to fulfill desires is a big one, looking toward the future and developing a plan will only benefit everyone – and ultimately make your parents happy.

Reverse mortgage is an individualized, specialized loan for those 62 and older that allows seniors to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. If you are planning ahead let your specialist guide you creatively to suit your needs and desires.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Reverse Mortgage Opens Doors to a Fulfilling Retirement

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonRetirement was once considered a “golden age” in decades past. It was held as a time for you to relax and enjoy life after years of hard work for your family and your assets. This can still be possible, even in the ever changing society with it’s unexpected expenses.

Reverse mortgage could be the way for you to fulfill your long held desires.

In years past reverse mortgage was not often considered by financial planners when helping those approaching 62 manage the pieces of their retirement lifestyle – including social security, assets, savings, and all the rest. This has changed.

Reverse mortgage is a strong viable option even in the phase of financial planning. The equity that builds up in the home could rightly be accessed to give you security at the least and make the difference between just making your monthly bills to actually enjoying your life in new ways.

This being the case, a reverse mortgage or HECM (Home Equity Conversion Mortgages) should be a part of the conversation. When choosing a financial planner, find out if they have learned about reverse mortgage options.  Seek a planner that has worked with a credited reverse mortgage specialist that is part of the Better Business Bureau, is an active part of the local community, and is a member of the National Reverse Mortgage Lenders Association (NRMLA).

Involve your children in the process. Find out what they want, express to them what you want and keep the dialogue going.

Reverse mortgage is an individualized, specialized loan for those 62 and older.  If you are planning ahead let your specialist guide you in the many scenarios that are possible. Think creatively about your needs and desires.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

 

How to Purchase Your Dream Home with a Reverse Mortgage

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonWhen we’re working hard and raising a family, there are two things we often hope to achieve in our future – having no house payments and living in our dream home.  As the years close in on retirement, these may still seem unachievable – but they’re not.  With the Reverse Mortgage for Purchase program seniors 62 and over can live mortgage payment free in the home of their dreams.

Here’s how it works:

When a home buyer uses a reverse mortgage to purchase a home, they will be required to provide a down payment.  The amount of the down payment will depend on the amount of the home they are purchasing – but unlike a conventional loan, not only will the lender provide the funds to make up the difference between the home price and the down payment, the new home owners will also be able to live mortgage payment free for as long as they remain in the home, freeing up income for other things – such as medical bills, in home care, or even vacations.

Commonly, when someone has a large amount of cash they want to simply pay cash for a home.  But in today’s housing market, even $200,000 doesn’t go very far.  With a reverse mortgage for purchase that $200,000 can be used as a down payment on a much more expensive and desirable home – AND the buyer will still live mortgage payment free, just as if they’d paid for the home with cash.  As with any reverse mortgage or conventional mortgage, the homeowner will always remain exactly that – the homeowner.  And the loan will not reach maturity until the last borrower passes away or permanently leaves the home.

Click here for more detailed information about how the Reverse Mortgage for Purchase program works.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Reverse Mortgage Terms to Know – Part 4

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonThe preceding “Terms to Know” articles have laid a firm foundation for your understanding the reverse mortgage world lingo, but this final installment of this series will go over a number of terms commonly used to describe the process.

Origination refers to the entire process of preparing the documents and setting up the mortgage. It will include an Appraisal. The Appraisal is the estimate of a house’s market value, or how much it would sell for if put on the market. The terms Appreciation and Depreciation mean what they sound like, that is, the increase or decrease of the value of a home at the time an assessment is done.

Condemnation is unlikely to come into your inquiry around a reverse mortgage for your home, however it is often in the appraisal field of terms. Condemnation is either the government taking private property for public use implying right of the eminent domain or it is a court action saying a property is unfit for use.

The Home Value Limit denotes the largest value in the reverse mortgage program of the home that can be used to decide what the loan advances to the borrower could be. A TALC rate means Total Annual Loan Cost.  It is an annual percentage cost of a reverse mortgage. Unlike the Annual Percentage Rate (APR), which takes into account only the finance charges, the TALC rate considers all costs.

If all goes well, the Origination goes into the Closing.  The Closing is a meeting to seal the deal. All the documents are signed and the mortgage begins at this moment. Even though the mortgage begins upon signing there is a Right of Rescission to protect the borrower. It gives them the right to cancel the home loan so long as it is within three business days of the closing.

Servicing happens after the closing. It is the administration of everything about the loan and includes the keeping of loan records and the sending of statements.

The following articles are also available within this blog – Terms to Know – Part 1, Terms to Know – Part 2, Terms to Know – Part 3, and Terms to Know – Interest Rates.

Reverse mortgages are available to seniors 62 and over, including married couples.  The funds can be accessed in a variety of ways including monthly installments, a line of credit, a lump sum, and to purchase a home.  Homeowners with a reverse mortgage will be able to stay in the home as long as they desire and the will NEVER have a loan payment until the last borrower permanently leaves the residence.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Reverse Mortgage Terms to Know – Part 3

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonPretty soon you will find yourself versed in the language of reverse mortgage. There are a number of reasons this will be helpful. First of all, you can read information on your own and understand the basic meaning. Second, you will be able to understand what your counselor has to share with you as the outline and give the valuable consulting time to deeper questions. And third, you can protect yourself from scams and those who would try to use terminology that could mislead you.  This final installment of “Terms to Know” focuses on terms you may run across when applying for and finalizing the loan.  As with any contract, it’s important to read and understand what is in it.  I hope this will help.  You can find the previous installments to this series by clicking here for “Terms to Know – Part 1” or click here for “Terms to know – Part 2” and here for “Terms to Know – Interest Rates“.

There are a few different kinds of advances to know. The first would be a Loan Advance which simply means the payment to the borrower or their designated party, it is an umbrella term under which the other advances fall. Another would be a Fixed Monthly Loan Advance which is exactly what is sounds like, the payment made monthly that remains the same to the borrower. A Term Advance is the same as a Fixed Monthly Loan Advance except that it is for a period of time and not the length of the loan. The last is a Tenure Advance which is a fixed monthly loan advance for the duration of time the borrower is living in the home.

If you receive the entire loan at closing this is called a Lump Sum. Sometimes a Lump Sum comes from a DPL, or Deferred Payment Loan. This type of loan gives you cash for home repair or maintenance and is usually offered on the local or state government level. From time to time the government may take hold of property for community use, such as building a needed highway, the right to do this is called Eminent Domain. A Credit Line is another way to employ a reverse mortgage for your needs. It is an account that lets the borrower decide how much and when they would like to take money. Line of Credit is another term for the same credit account.

Two terms common to the end of a reverse mortgage and the beginning of repayment are Loan Balance and Leftover Equity. The Loan Balance is the amount owed. It is capped in a reverse mortgage by the value of the home at the time the loan is repaid and will be the sum of principal and interest. If you take the sale price of the home and subtract out the cost of selling it and the amount owed you will get the Leftover Equity. This is what either the homeowner or the heirs will receive.

Reverse mortgages are available to seniors 62 and over, including married couples.  The funds can be accessed in a variety of ways including monthly installments, a line of credit, a lump sum, and to purchase a home.  Homeowners with a reverse mortgage will be able to stay in the home as long as they desire and the will NEVER have a loan payment until the last borrower permanently leaves the residence.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

 

5 Surprising Ways To Put a Reverse Mortgage to Work for You

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonOne of the biggest perks of a reverse mortgage is it’s up to the borrower to decide how to use the funds, as well as how to receive those funds.  And with the rapidly improving reputation of today’s reverse mortgage, those uses are being suggested more often and are becoming more creative.  This wonderful financial tool, available to seniors 62 and over, is now being widely accepted by financial advisors across the nation.  Here’s a few reasons why…

1.) A reverse mortgage can eliminate existing housing debt.  In 2010 42% of seniors age 62 and over had housing debt.  This is a dramatic increase compared to the 1992 estimate which was only 24%.  Housing debt can be a huge financial burden to aging Americans, whether it’s because they’re on a fixed income or because it interrupts the dreams they once had for their golden years.  Using a reverse mortgage to pay off a conventional mortgage, or even a HELOC (Home Equity Line of Credit), can relieve some serious pressure in the borrower’s life, as well as adult children.

2.) A reverse mortgage line of credit can protect a retirement portfolio.  During the 2008 economic crisis we all saw first hand how retirement investments are not guaranteed.  But an FHA insured reverse mortgage line of credit is.  Using home equity to take out a reverse mortgage line of credit now offers a second level of protection against economic pitfalls and the impact they may have on a retirement portfolio in the future.   And unlike a conventional home equity line of credit, the reverse mortgage line of credit is not accompanied by a loan payment.

3. ) Age at home and fund in-home care with a reverse mortgage.  One of the most common things I hear from those seeking a reverse mortgage is that they want to age at home as long as possible.  Why wouldn’t they?  The funds from a reverse mortgage can allow the elderly to do just that and fund the care they need if assistance becomes a need.

4.) Delay Social Security payments until the maximum benefit is available at age 70.  The funds from a reverse mortgage can be used as a bridge to put off tapping into Social Security payment before they’re worth their max.  Then once the Social Security is accessed, the borrower will receive funds from both.

5.) Reduce tax burden by reducing taxable income.  The funds from a reverse mortgage are not considered income, meaning they are not taxed.  This can be a huge benefit when other options to bring in cash include taxable incomes such as working and withdrawing from taxable retirement investments.

For seniors 62 and over reverse mortgage is an excellent option.  Homeowners can access the equity in their home, live mortgage and loan payment free, and no repayment is due until the last borrower passes or permanently leaves the home at which time there are options.  For some retirees, it could mean the difference between living and living well.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Can Reverse Mortgage Rescue A Looming Retirement Crisis?

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonNumbers are being released showing that the impending retirement crisis may be worse than originally thought.

Half of Americans have less than $10,000 in savings.  Nearly half of the oldest Baby Boomer generation have insufficient resources to pay for basic retirement living expenses and healthcare costs.

The Center for Retirement Research at Boston College estimates that our “retirement income deficit” is $6.6 trillion. That number represents the gap between pension and retirement savings that American households have today and what they should have to maintain their standard of living in retirement.

Over 6 million American seniors are living in poverty.  This number is expected to grow by 33% by the year 2020.

These stats are concerning not only for the retirees, but also their families. A reverse mortgage can help by becoming an important piece of retirement planning. Seniors, 62 years and older now have the ability to fund or protect their retirement using the equity in their homes, alleviating mortgage payments, and receiving the funds via a line of credit, monthly payments, or at times a lump sum.  In addition, a reverse mortgage can now be used to purchase a home!

For many, this option makes a world of difference, allowing for the sought after prosperous retirement years instead of barely scraping by on a budget. And the reverse mortgage funds can be used for any purpose the borrower chooses, and is often used to help with every day expenses, for long term medical costs, or to guard assets.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Should a Reverse Mortgage be Part of Your Retirement Portfolio?

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonFor the past quarter century seniors have easily managed to retire on three things: company pension plans, social security, and personal savings.  But with an always uncertain economy facing us today and in the future, many baby boomers are taking a second look at their retirement portfolios.  Previously, tapping into home equity for retirement has been considered a last resort.  But should it be?

Both company pensions and social security benefits face much uncertainty down the road, and if you’re lucky enough to have a somewhat stable retirement investments, protecting them will be high priority.  When adding home equity into the retirement equation, statistics show most baby boomers 51 and over have enough to retire comfortably.  So where does this leave reverse mortgages?

For seniors 62 and over reverse mortgage is a feasible option.  Homeowners can access the equity in their home, live mortgage and loan payment free, and no repayment is due until the last borrower passes or permanently leaves the home at which time there are options.  For some retirees, it could mean the difference between living and living well.

When looking down the road toward financial planning for retirement, ask yourself a few questions and determine if a reverse mortgage might fit into your Plan A or your Plan B.  Discuss it with your spouse and with your financial planner.  Learn the facts about reverse mortgage and how it will affect your loved ones after you pass.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

 

Reverse Mortgage and the Alternatives

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonHome equity accounts for approximately 70% of a senior’s assets, not including social security or pension.  Often times tapping into this equity becomes inevitable when facing health crisis or financial restrictions in retirement.  Using home equity should be part of a larger financial plan and there are a few ways it can be incorporated.

Reverse Mortgage

A reverse mortgage is available to seniors 62 and older, including married couples.  Homeowners who obtain a reverse mortgage will have NO mortgage payments, and they will be able to access the equity in their home via monthly payments, a line of credit, a lump sum, or even to purchase a different home.  The loan does not have to be repaid until the last borrower passes away or permanently leaves the home, at which time there are options available to heirs.  The amount of the loan depends on the amount of equity in the home and the age of the borrowers – the older the borrower, the more money they can receive.  This is an excellent option for seniors across the board – whether on a fixed income or already affluent looking to protect their retirement portfolio.

Home Equity Loan

A home equity loan (HELOC) also taps into equity by borrowing money against the home.  This type of loan will be processed as a conventional loan and standard income and credit restrictions will apply, as well as monthly payments will need to be made to the lender.  Any health or future financial concerns should be thoroughly thought through prior to taking out a home equity loan.  Loading up the home with debt during retirement can be risky and could result in loss of the home if the borrowers are unable to make their monthly payments.

Downsize

Another option would be to downsize all together by selling the existing home and moving into a more modest situation.  Depending on the amount of equity in the home, a homeowner may be able to sell the home for enough money to comfortably be able to make rent or mortgage payments for 10 to 20  years.  Just as with a home equity loan, this option could be risky for a person with health concerns as the funds set aside for housing could be needed elsewhere.  If an owner is considering a move, they should also consider the Reverse Mortgage for Purchase, as this may offer the best bang for their buck when purchasing.

Before making any major decisions regarding how to effectively use the equity in your home, it is best to consult with a financial adviser and a reputable reverse mortgage lender.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.

Using a Reverse Mortgage to Fulfill Retirement Dreams in Seattle, WA

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonI recently ran across a hard hitting article titled “Do I Have to Die Early to Avoid Poverty?”.  What a powerful title.  But the truth is, I meet people everyday who are forced to ask this questions of themselves.  Our whole lives, we work hard, raise a family, save for retirement, hope we’re blessed enough to watch our grandchildren and even our great-grandchildren grow – but then for many, as we age, the thought of funds running out before we die becomes a looming worry.  Often, regardless of strategic retirement planning, the elderly live on a strict budget with monthly allotments of funds and will have calculated that based on the age they will likely pass away.  But what if they are lucky enough to live beyond these projections?

Using reverse mortgage as a retirement planning tool can make a world of difference for those wishing to live fulfilling lives and not face the scenario described above.  Sometimes this looks as simple as supplementing income to make sure everyone is comfortable throughout the golden years.  Other times it means drawing from reverse mortgage in a lump sum with the desire to spend it on family while the borrower is still alive and can reap the personal rewards, instead of waiting until after they’ve passed to distribute inheritance.  Other times it can be a line of credit or monthly installments to prevent savings and retirement funds from running out.

Reverse mortgage is available to homeowners (single, widowed, or married) 62 and over.  Funds can be used for any purpose the borrower sees fit.  Reverse mortgages are more frequently being utilized as a retirement or financial planning tool as planners are working with reputable lenders to ensure their clients are fully informed of their options.

Janis Layman is a Reverse Mortgage Specialist serving the Seattle, Lynnwood, Edmonds, and Shoreline areas of Washington.  Contact Janis and learn if reverse mortgage is right for you.