retirement – Page 2 – Seattle Reverse Mortgage Specialist

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.

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

Posted on April 20, 2016June 21, 2016 by Janis Layman

I 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.

How Reverse Mortgage is Helping the Baby Boomers

Posted on April 6, 2016April 26, 2016 by Janis Layman

While the “baby boomer” generation inches towards retirement, the economy in many areas is still rather dismal. Many took major losses in the 2008 economic meltdown, losing their hopes for a prosperous retirement. In situations such as this, reverse mortgage is becoming an important piece of retirement planning. Seniors, 62 years and older, now have the ability to fund their retirement using the equity in their homes, alleviating mortgage payments, and receive either monthly pay-outs or line of credit as long as the borrower(s) remain in the residence. Reverse mortgages can even be used to purchase a home now. 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. Reverse mortgage funds can be used for any purpose the borrower chooses, and is often used to help with every day expenses or long term medical costs.

According to several sources there are an estimated 60 to 75 million boomers entering or approaching retirement. Financial and retirement planners in Seattle and nationwide are educating themselves extensively on reverse mortgage in order to better use it as tool in future planning. They are working closely with reputable reverse mortgage lenders in order to fill in the gaps where retirees are looking for 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 Terms to Know – Interest Rates

Posted on March 18, 2016March 25, 2016 by Janis Layman

Continuing our tour of the Reverse Mortgage terminology there are a few INTEREST related phrases that are good to know. Although all these phrases may not come up for everyone, if you’re shopping around or learning more about the process, you may run across a few of them.

The CMT Rate is the Constant Maturity Treasury Rate and is used as an interest rate index in the HECM program; while the Maturity is when the loan is due and payable. An Acceleration Clause refers to this point by stating in the contract when a loan may be considered due and payable.

There are quite a few words used to talk about interest such as adjustable and current and expected. All of them refer to something a little bit different. If you choose a reverse mortgage with an Adjustable Rate, that would mean it would change based on the published market rate index. A Cap would be the limit on how much an adjustable rate is allowed to go up or down during a defined period of time.

An Initial Interest Rate (in the HECM program,) is the rate used to determine your loan advance amounts. It will equal one of two things, either a ten year LIBOR rate with a margin or a ten year CMT, Constant Maturity Rate. The LIBOR is the London Interbank Offered Rate and is often used as an index for interest in the HECM program.

Your Current Interest Rate in the HECM program is self descriptive. It refers to the rate of interest currently being charged on the loan.

The last significant term relating to interest is the Expected Interest Rate. This rate equals one of two things. It is either a 10-year CMT or a 10-year LIBOR and is used to determine a borrower’s loan advance amounts. To help determine the Initial, Current and Expected Interest Rates a Margin is added, this is a defined amount.

Seniors 62 and over may be eligible for a reverse mortgage or a reverse mortgage for purchase by utilizing the equity many already have in their homes. Funds can be accessed in different ways including a monthly installment or a line of credit. The homeowner will always retain the title to the home and will live mortgage payment free, and it’s common misconception is that the 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.

If you have any questions about any of these terms, please don’t hesitate to contact me.

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.

Cash Home Buyers Get a Boost with Reverse Mortgage for Purchase

Posted on March 1, 2016March 4, 2016 by Janis Layman

In this day and age, buying a home with cash is rare. And not because of the reasons you may think – such as who has that much cash nowadays? Well, that is part of the reason, but it’s a little more complicated than that. Those who have a substantial amount of cash are finding there are no homes available in their price range and suddenly they don’t have enough cash to be a true “cash buyer”. This diminishes their hopes of living mortgage payment free. For example, if a retired couple sells their home or allots other funds amounting to $200,000 for a new home, they will suddenly be facing a new dilemma – finding a home to meet their needs, that doesn’t need repairs, and is in the community they wish to live – and that is within that price range. With home prices quickly rebounding across the Seattle, Washington area, this scenario is playing out often. The alternative is assumed to be either A) settle for less than what is desired in a home, or B) use the cash as a down payment and take out a conventional mortgage giving up the hope of not having a mortgage payment. But there is another option…

This is where the Reverse Mortgage for Purchase program can provide a solution. Not only will the program add funds to the buyer’s available cash making up the difference needed to purchase an appropriate home, it will also allow that buyer to live mortgage payment free.

Here’s how it works:

For seniors 62 and over, home buyers are able to use a reverse mortgage to purchase a new home. The amount of the down payment required from the buyer 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.

With options like this available to seniors, there is no reason realtors shouldn’t be suggesting their clients look into this opportunity. It’s not right for everyone – but it’s a win-win for many!

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.

Understanding Elder Law

Posted on February 22, 2016 by Janis Layman

Elder law is a relatively unknown segment of law and is often overlooked when seeking legal solutions. But for some seniors and their families in the Seattle, Washington area, an elder law attorney may be exactly what they need. Elder law is very broad and includes things like estate planning, probate, guardianship, real estate, nursing home neglect and a dozen other areas of law that affect the elderly. Typically one lawyer will not have expertise in every area, but will instead work with a network of attorneys who can supplement in specific areas when needed and vice versa. Also, keep in mind just because an individual is elderly does not mean they need an elder law attorney. Elder law is focused on legal problems specific to the elderly. Concerns with other areas of law may best be handled by attorneys dedicated to those areas.

An elder law attorney should be educated and informed on reverse mortgage. It is common for them to receive questions from clients, former clients, and their families about reverse mortgage when establishing estate plans or when they are considering a reverse mortgage for the first time. It is highly encouraged to make sure any question receives an adequate answer – and often elder law attorneys are part of that equation. This can also help with avoiding reverse mortgage scams.

Here are a few questions to ask when seeking out a an elder law attorney:

• How long has the attorney been practicing?
• What percentage of the attorney’s practice is devoted to elder law?
• Does his or her practice emphasize a particular area of elder law? (for instance, guardianship or other specific work)
• How much elder law training has the attorney had, and from what organizations?
• Is the attorney a member of the National Academy of Elder Law Attorneys?
• Will the attorney be able to work within your time limitations?

In addition to a legal network, an elder law attorney should be familiar with the “elder network”, a network of public and private community resources to assist seniors in various capacities. This should include 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.

How are Social Security, Medicare, and Pensions Affected by a Reverse Mortgage?

Posted on January 13, 2016January 20, 2016 by Janis Layman

A very common concern among seniors and adult children when considering a reverse mortgage is how it will affect social security, Medicare, and even certain pensions. For many seniors, these benefits are a large part of their income. Fortunately, because the funds from a reverse mortgage are NOT considered taxable income, a borrower’s benefits will not be affected when taking out a reverse mortgage.

On the other hand, borrowers who have Medicaid, TANF, Food Stamps or SSI may see those benefits affected by this additional income. Because these programs are government sponsored programs with strict approval guidelines based on all sources of income, even non-taxable income, there is a possibility the additional cash flow will need reported. Other supplemental and assistance programs would need to be addressed on a case by case basis. Working with a reputable reverse mortgage lender and required third party counseling will ensure all your questions are answered thoroughly and honestly.

Reverse mortgages are available to homeowners (married or single) 62 and older as long as their is adequate equity in the home, it is the primary residence, and it is a HUD approved property type. The proceeds can be received as monthly installments, a reverse line of credit, a lump sum, or to purchase a new residence – and can be used for any purpose the borrower sees fit. This FHA insured loan allows the borrower(s) to live mortgage payment free.

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.

Tag: retirement