owners pass away – Seattle Reverse Mortgage Specialist

Helping Your Parents with a Reverse Mortgage

Posted on October 6, 2016October 12, 2016 by Janis Layman

Perhaps 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.

Are You Prepared If Your Spouse Dies?

Posted on September 15, 2016October 11, 2016 by Janis Layman

Regardless of age, losing a spouse is difficult – and the impending “business” that comes along with it doesn’t make it any easier. This is why we should all ask ourselves at some point, “Am I prepared if my spouse dies?”. There are so many various aspects to being “prepared”, and although I can’t help with many of them, I can help with some simple suggestions to making sure you aren’t stuck with unexpected questions.

It’s not uncommon in marriages or partnered relationships for each spouse to take care of different bookkeeping tasks. For example, it’s very common for the husband to manage retirements funds – pensions, IRA’s, etc. While the wife may handle personal address books or paying bills. Take a minute and think about this. Not only what you may not know, but what your spouse may not know.

Here are some suggestions to putting this information in order:

• Begin by making a list over a week or two, and ideally an entire month. Make note of what “business” you do. How many passwords did you need online? How many account numbers on the phone? What about PINs? The results may surprise you. In today’s high tech yet overly scammed world, everything is secured under lock and key.

• Although it is best if both spouses can contribute to this exercise it is not a requirement. Either way, spend some time brainstorming together. We often will remember things when discussing them with someone else.

• It’s important to make a physical list of this information, whether typed or handwritten. What you shouldn’t do though is save this information online. Hackers will seek data that includes account numbers, logins, and passwords and this could lead to compromising your accounts and even identity theft. Even if you think it’s secure, there really is little guarantee that is true. Keeping this list with your most important documents – such as birth certificates, titles to homes and vehicles, etc – is going to be your safest bet, but make sure both spouses know where to find it.

What to include on your list:

Name and phone number of company, account numbers and any PINs associated. If using online management of account, include website URLs of where to login, login name and password, and any auto pay information. If there are specific people you work with at these companies, include their names.

If only one spouse is listed on the account, make an effort to add the other one. I recently witnessed an elderly woman at the DMV who was unable to renew her driver’s license because all the mail that came to the home was in her husband’s name. This is more common than many people realize – and often they don’t even know until they’re caught in jam.

• Home loan
• Home insurance
• Car loan
• Car insurance policies
• Health insurance policies
• Life insurance policies
• Bank accounts
• Credit card accounts
• Pension, IRA, annuities, etc
• Utilities – electric, water, gas, phone, trash
• Facebook, LinkedIn, etc
• Contact information for family and friends
• Contact information of bankers, retirement or financial planners, loan officers
• Contact information for doctors, dentists, pharmacies, veterinarians, etc (and a little info about what each one is for)

These lists will vary from person to person, so make sure to add your own ideas. Also be sure to update it when anything changes or is added – because hopefully you won’t need it for quite a few more years!

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 September 8, 2016October 12, 2016 by Janis Layman

When 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.

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

Posted on July 13, 2016August 4, 2016 by Janis Layman

One 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.

Reverse Mortgage Helps Seattle Widow Buy Home

Posted on June 15, 2016July 4, 2016 by Janis Layman

It’s a scenario many wish wasn’t reality, but often it is…

A spouse passes away leaving behind a widow. The remaining partner wants to move closer to family. But there’s a catch – although the widow’s current home is owned outright, they would typically need to sell it before they could purchase another. And they wish to move to an area where the median home price is much higher than the home available to sell.

Reverse mortgage for purchase may be an excellent option for this widow. Let’s look at the scenario in detail:

Predicament #1: Widow needs to sell current home before purchasing a new home.

Solution: With a reverse mortgage for purchase, this widow would not need to sell the home immediately. Any personal funds or assets used to purchase the new home could be replenished when the current home sells – and the funds from a reverse mortgage would supplement the initial funds needed. This would allow her to move and get settled immediately.

Predicament #2: The cost of a home in the area the widow is moving is much higher than where she currently lives, meaning the proceeds from her current home sale will not cover the entire purchase.

Solution: When utilizing a reverse mortgage for purchase, her out of pocket cost would be substantially supplemented. For example if she anticipates selling her current home for $200,000 and purchasing a home for $300,000, the reverse mortgage may cover the $100,000 difference allowing her to live mortgage payment free and best of all – near her family.

Reverse Mortgage for Purchase (aka: HECM for Purchase) is an FHA insured program for seniors 62 and over. To qualify, the borrower(s) must be purchasing an eligible property, have the required down payment, and meet the HECM financial assessment guidelines.

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.

What is FHA Insurance on a Reverse Mortgage Loan in Seattle, WA?

Posted on May 25, 2016July 4, 2016 by Janis Layman

If you’ve taken the time to learn even a little bit about a reverse mortgage in Seattle, it’s likely you’ve heard the term “FHA insured” at least a couple of times. But what exactly does it mean?

Homeowners 62 and over, with significant equity in their home, may be eligible for a reverse mortgage. These loans are typically insured by the FHA and provide non-taxable income to the borrowers based on the available equity in the home. The more equity and the older the borrower, the more funds available. The funds can be accessed via a line of credit, monthly installments, a lump sum, and even can be wrapped into the purchase of a new home. The borrower can always use the funds for whatever they deem fit.

The homeowner will live mortgage payment free for as long as they remain in the home, although they will have a few financial obligations related to the house such as homeowners insurance, property taxes, utilities, and HOA fees. As long as the borrowers keeps current on these few obligations, they cannot be evicted from the home, the home cannot be foreclosed, and they cannot be made to repay the loan. The loan comes due once the borrower (or the last borrower in the case of married couples) has left the home for 12 consecutive months or passes away. At this time the loan will be due and payable with time allotted to allow for transitions. This is where the FHA insurance comes in.

In the case of a death, the home with pass onto the heirs. At this time they have options, with two being the most common – 1) Pay off the loan and keep the home (often through life insurance or sale of another asset), or 2) Sell the home.

In the scenario of loan repayment the heirs will never have to repay any more than the home is appraised for. They will only be required to pay 95% of the appraised home value or the full amount of the loan, whichever is less. Any amount due on the loan above the appraised amount will be covered by the FHA insurance and no one will be held liable.

In the case of a home sale, the heirs will never be required to pay more on the loan than the home sells for as long as the sale price is at least 95% of the appraised value. Any remaining balance will be covered by the FHA insurance. On the other hand, if the home sells for more than the loan balance, the heirs will keep any remaining funds. This is especially important as over the years the housing market shifts.

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.

Curing HELOC Debt With Reverse Mortgage

Posted on May 11, 2016July 3, 2016 by Janis Layman

A HELOC is the acronym for Home Equity Line of Credit, and thousands in the Seattle area have taken advantage of it. When the housing boom was in full swing a number of years ago, the values of personal homes gave their owners a strong resource to draw upon in the form of a loan. Unfortunately many of these loans amortized, leaving the borrowers with higher than predicted payments and long term loans.

Seniors 62 or older with a HELOC loan may be able to utilize a reverse mortgage to relieve the financial burden. The HECM, or Reverse Mortgage, provides the borrower with non-taxable income that will not affect social security or Medicare, and can be used for whatever the borrower sees fit. The funds from the loan can also be received in various options such as monthly payments or line of credit. Seeking the advice of a reputable reverse mortgage lender can help you make these decisions. During the application process, the HELOC will be discussed and a options of paying it off will be laid out.

If you do not presently have a HELOC but are considering one, put reverse mortgage on the table for a consideration as well. There will be advantages to both options giving you a sense of freedom to have choices.

Reverse mortgages are available to seniors from all walks of life, including married couples, and they will incur NO mortgage or loan payments. The amount of funds a borrower can receive is based primarily on two things – the amount of equity in the home and the age of the borrower. Although these are technically loans, they do not need to be paid back until the last borrower leaves the home permanently, at which time there are various 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.

Reverse Mortgage and the Alternatives

Posted on May 4, 2016July 3, 2016 by Janis Layman

Home 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.

Reverse Mortgage Terms to Know – Part 1

Posted on March 9, 2016March 15, 2016 by Janis Layman

If you’re considering a reverse mortgage, you’ve likely read a handful of short articles on them, or Home Equity Conversion Mortgage (HECM). You probably have a sense of what a reverse mortgage is and what it is not. So you read longer more detailed articles and meet with a lender, only to find yourself in a sea of words that leave you swirling. Like any type of contractual agreement in America, reverse mortgage has its own language to give clear definition to the acting agencies, the building blocks involved and the rights and responsibilities of all parties involved.

The following will help you speak the reverse mortgage language, starting with the basic overarching terms.

A Reverse Mortgage is a loan taken in lieu of home equity. It gives cash advances to the borrower and does not require repayment until the last borrower passes away or leaves the home permanently. The loan repayment amount is capped by the value of the home at the time of loan maturity. The acronym HECM means Home Equity Conversion Mortgage and is the only program of its kind backed and insured by the Federal Housing Administration.

A Mortgage refers to a legal document. The document makes a home available to a lender to repay a debt. A Non-Recourse Reverse Mortgage is a home loan where the amount owed cannot exceed the home’s value at the time of loan repayment. This type of reverse mortgage is FHA insured. Another type of reverse mortgage is called a Proprietary Reverse Mortgage, which have grown quite uncommon. Proprietary reverse mortgages are privately insured by the banks and mortgage companies that offer them. They are not subject to all the same regulations as HECMs, and for this reason borrowers should ensure they understand these loans thoroughly and beware of scams. They are also occasionally called “jumbo” reverse mortgages.

The value of a home, which implies subtracting out any money owed on it, is called Home Equity and Home Equity Conversion is the process of turning the equity into cash. It allows the one receiving to stay in their home without making monthly payments while there, or still alive. It takes what is due to the borrower wrapped up in the years of paying for their home and makes it available immediately.

For seniors 62 and older a reverse mortgage is an option. Utilizing the equity of the asset you already have can help fund the retirement of your dreams – or just your retirement. You will always retain the title to your home and will live mortgage payment free. How you decide to use this asset is up to you, and a common misconception is that your home will be lost after you pass. With proper education via required third party counseling and retirement planning, this does not need to be the case.

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 FAQ – Part 3

Posted on December 28, 2015 by Janis Layman

This is the third in a three part series of frequently asked questions about Reverse Mortgage. You can find Part 1 here and Part 2 here. If you have questions that are not currently listed, please don’t hesitate to contact me directly.

Will I Lose My Government Assistance If I Get a Reverse Mortgage?

Because a reverse mortgage is not considered income, it does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid or other public assistance, any reverse mortgage proceeds that you receive may affect your eligibility. Reverse mortgage funds that you retain would be considered an asset, just as other bank funds. Working with a reputable reverse mortgage lender will ensure you are properly reporting income and not caught by surprise.

What is a Reverse Mortgage Appraisal?

A home appraisal by an FHA approved appraiser is required for every reverse mortgage loan. Once your reverse mortgage lender has received your application, you will be contacted by an appraiser to schedule a time to conduct the appraisal. The appraisal will consist of an inspection, where the appraiser will walk through your home and possibly take photographs. Once the walk-through is completed, research will be done to determine your home’s worth based on various factors, including comparable home sales in your area. After the research has been done, an appraisal report will be generated which will include all of the factors that went into determining your home’s appraised value.

How Do I Spot a Reverse Mortgage Scam?

Unfortunately con-artists often prey on the elderly through reverse mortgage scams, but there are several ways to spot such activity. Be skeptical of lenders who solicit through means such as television, door-to-door, churches and community centers, direct mailers, or other extensive advertisements. Asking for large amounts of money up front is a very clear indicator. Anything required beyond a routine appraisal deposit of approx $300 is cause for concern. Steer clear of reverse mortgages that are marketed as “Foreclosure Assistance”. A high pressure salesperson is a red-flag, as it is important to clearly understand what you are signing and to have any questions thoroughly answered. Working with a reputable lender is critical when making such a major decision as obtaining a reverse mortgage. Learn more about reverse mortgage scams here.

What Happens if the Borrower Moves Into a Senior Care Facility or Something Similar?

A reverse mortgage becomes due and payable when the last borrower moves out of his or her home permanently. For instance, moving into a senior care facility, selling the home, passing away or moving in with the children. In the case of a married couple, if both spouses are on the loan as long as one spouse remains in the home the loan will continue without hiccup.

What Happens to a Reverse Mortgage After the Owners Pass?

When the homeowner passes – or the last spouse in the case of a married couple – the home will transfer into the estate or a specific person according to the wishes expressed in the homeowner’s will. At this time there are three main options: pay off the remainder of the loan, obtain a conventional loan, or sell the home. For more extensive details about each of these options, read this article on my blog.

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.

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