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.

 

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.

Only 3% of Seniors Use a Reverse Mortgage to Buy A Home – But Why?

Posted on by Janis Layman

Reverse Mortgage Seattle Lynnwood Edmonds Shoreline WashingtonA recent statistical survey showed that only 3% of senior home buyers were even considering using a reverse mortgage to the make the purchase, compared to 48% who were planning to use a conventional mortgage.  But why is this?

The Reverse Mortgage for Purchase program is not new, but knowledge about it is.  This program efficiently wraps the home purchase and the reverse mortgage into the same transaction allowing the home buyer to purchase the home they want AND live mortgage payment free as long as they live in it.  Available to seniors 62 and older, reverse mortgages are available in various forms – a lump sum, monthly installments, a line of credit, and yes, even a home purchase.  The first options are widely advertised and information about them is broad.  But the last option, the home purchase option, is still relatively unheard of.

Here’s why I think this home purchasing tool is so broadly under-utilized:

• Realtors aren’t educated enough on the option, therefore they don’t suggest it.  When someone is considering purchasing a new home, the realtor is often the first point of contact.  If more realtors understood how this powerful program works AND how it can help their own bottom line, it would be used more frequently.

• Buyers are starting with a conventional mortgage company seeking pre-approval to determine how much they can obtain a loan for and how much the payment would be.  Even if the buyer has taken this route prior to looking at homes, they should still be informed about the Reverse Mortgage for Purchase program for two very important reasons.  One, it increases their purchasing power allowing the buyer to shop in a market that may be well above what a conventional mortgage would approve.  And two, they will live mortgage payment free unlike is possible with a conventional mortgage.

• Cash home purchases are very enticing.  For buyers considering using cash from retirement, inheritance, insurance, another home sale or asset liquidation the idea of being able to buy a home outright is gold.  Again, two problems can be encountered here. One, the housing market is booming and a cash buy often results in less home, while a reverse mortgage will contribute to the cost of the home allowing for more house for less money.  Two, these seniors will tie up all their cash in a home making them “home rich” but “cash poor.”  The reverse mortgage purchase allows the buyer to keep a hefty chunk of their cash, or combine the home purchase with other forms of a reverse mortgage, such as a line of credit.

There will always be senior home buyers that are not a fit for the Reverse Mortgage for Purchase program, but any professional in the real estate industry is doing a disservice to not make sure their clients understand this option.  For more detailed information about this program, click here.  Retirement Funding Solutions often hosts detailed webinars open to all real estate professionals.  If you’re interested in being informed when one is scheduled, subscribe to my e-newsletter and you will receive the notices directly from me.

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.

 

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.