Articles for people who would benefit from a reverse mortgage or for family members of people who would benefit.

Reverse Mortgage Success

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When I talk about Reverse Mortgages, the common reaction is that people who would benefit from them don’t want one.  My response is that during my many years in the mortgage industry, no one has ever come to me wanting a mortgage.

Goal Examples
  • You want to live in a certain home, but don’t have enough cash to pay for it.
  • You own a home and want lower payments, or less interest.
  • You have equity and want to convert the equity to cash so you can buy something.

These same things apply whether it is a traditional mortgage or a Reverse Mortgage.  The critical difference is that with a Reverse Mortgage, the payments are deferred until the borrower no longer lives in the home.  Instead of making monthly mortgage payments, the mortgage payments are added to the loan balance.

parents at door greeting kids

Successes of Clients We Have Assisted
  • Borrowers have come to us for purchase loans when they wanted to move closer to their children. They had equity from the sale of another home, but not enough cash to pay for the home they wanted.  By combining their cash with a Reverse Mortgage, they bought the home they wanted.
  • Another borrower sold a home that was free and clear and bought a more expensive home in a nicer location with a Reverse Mortgage and no monthly mortgage payment. She just had to pay taxes insurance and maintenance while living in the property.
  • One borrower had an $1,100 house payment and about $1,300/month social security. An inheritance allowed her to pay the mortgage down enough to get a Reverse Mortgage, eliminate the mortgage payment and stay in her home.
  • Some borrowers need additional income. By converting the equity to cash with a monthly payment for life, the borrower can get the income they need without depending on children or others.  This option may be beneficial for children because it can eliminate the need to write a check to help parents each month, and may or may not result in a lower inheritance later.
  • A 76 year old lady wanted to move, but did not want a Reverse Mortgage. She could easily qualify for a traditional mortgage.  When I pointed out that a Reverse Mortgage might allow her to give up her job, she became interested.
Reverse Mortgage Requirements

The basic requirements to get a Reverse Mortgage are that at least one borrower must be 62 or older, live in the property as a primary residence, complete FHA approved counseling, and satisfy income, asset, and credit underwriting guidelines.

The reasons for a Reverse Mortgage are as varied as the people who get them. Please feel free to contact me at 303-469-1254 to discuss your current situation and what your goals are.  I would be happy to explain your options and provide a free, no obligation, proposal.

Improve Cash Flow With a Reverse Mortgage

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Reverse mortgages can be used in many ways to increase cash flow for daily living.

Following are some examples:

A single lady came to us with about an $1100/month mortgage payment and about $1,300/month in Social Security income.  This income/outgo situation clearly could not result in a balanced budget.  She owed too much on the home to qualify for a Reverse Mortgage.  When she received an inheritance, she was able to pay the loan balance down to where she could qualify for a reverse mortgage.

An 80 year old man was spending down his retirement accounts at a rate where the money would soon run out.  He chose an option that gave him payments for 10 years that would allow him to make his retirement accounts last.  After 10 years he planned to sell the home and move, but the Reverse Mortgage allowed him to live comfortably in his house for another 10 years.

son helping father with finances

A 99 year old man had a home that was free and clear, but he was reaching the end of his financial resources to pay for care and maintain the property.  A Reverse Mortgage allowed him to buy a new furnace and continue to pay for private pay care so he could continue living in his home.

A 78 year old woman was referred to us because her retirement savings was being depleted such that she would be out of money in 4 years.   She had a home that was free and clear.  A reverse mortgage provided enough monthly income so that she would not have to deplete her investment accounts.
elderly woman at laptop with daughter

A 70 year old couple was depleting their investments at a rate that would leave them out of money soon.  They had enough equity in their home to obtain a Reverse Mortgage that would eliminate the mortgage payment, installment debt, and credit card debt.  By eliminating the debt payments, they have enough income to balance the budget and stay in their home.

A couple that had spent more than 25 years as missionaries owned a home.  It was not paid off, and their missionary support was dropping.  A Reverse Mortgage allowed them to eliminate the mortgage payment and continue living in the home with their available income.

I’m always happy to provide free information to help a buyer understand their options with either a conventional forward mortgage or a Reverse Mortgage.  Please contact me to discover options that may be available to you.

When Reverse Mortgages Make Sense

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A common situation where a Reverse Mortgage is helpful is when a person over 62 wants to move, but the equity in the old home is not adequate to pay cash for the new home.  Some recent examples:

You may be able to move and not have to worry about having a mortgage payment

A lady was living in Utah home without a mortgage.  After her husband died, she wanted to move closer to her children in Colorado.  Because of the difference in home values and the costs associated with the move, the proceeds from the sale of the old home would not pay for a replacement in Colorado.  We used a Reverse Mortgage to help her buy a townhome that met her needs without a mortgage payment.

A couple had a home in Nevada where property values had declined.  They had a mortgage on the old property, but wanted to move closer to children in Colorado.  The equity from the home in Nevada was not enough to buy a replacement home in Colorado.  A Reverse Mortgage along with the equity from the sale of the Nevada property allowed them to buy a home in Colorado without a mortgage payment.

mature couple

You may be able to buy a home you originally thought to be financially out of reach

A single lady owned a home with no mortgage and wanted to buy a more expensive home.  She did not have enough cash to buy the home she wanted without a mortgage.  She did not have enough income to qualify for a regular amortizing loan, but she was able to buy the home she wanted with a Reverse Mortgage.

You may be able to stop working and still be able to afford the home you want

A 76 year old widow wanted to move from a regular house to a townhome so she wouldn’t have to deal with exterior maintenance.  She had a mortgage on the old home and needed a mortgage to buy the home she wanted.  We made the arrangements for a conventional loan using the equity from the old home as down payment.  She had enough income from her job and social security to qualify to the loan she wanted.  I pointed out that a Reverse Mortgage might allow her buy the townhome she wanted and give up the job she needed with a forward mortgage.

I’m always happy to provide free information to help a buyer understand their options with either a conventional forward mortgage or a reverse mortgage.
Please contact me at 303-469-1254 so I may assist you with your specific scenario.

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Where does your mom want to live?  Where do you want her to live?

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The background to these questions is that as we all age, our living arrangements often need to change.  The changes can be the result of employment changes, health changes, or death of a spouse. The employment changes typically come as a person reaches the end of their full time employment.  Health changes can be a result of typical aging or other issues.  Death of a spouse may result in a desire for a change of scenery, often moving closer to children.35085010_m

Option 1 -Recombine Households

For some, the answer is to recombine the households of parents and children again after decades of living apart.  This could mean a child moving into the parent’s home as a care giver.  It could mean parent moving into the child’s home, or it could mean parents and child buying a home together.  Any of the above can be a solution for a particular family.  We can offer names of people who help facilitate these kinds of combinations.  They often involve a need to downsize the total accumulation of “stuff”.

Option 2 -Move to a Senior Community

For some, the answer is to move to a senior community.  There is a wide range of communities offering various levels of service to make life easier for mom as she ages.  The services range from independent living to full skilled nursing care.  Moves to these kinds of communities often involve selling the family home and using the proceeds to pay for life in the new community.  We can offer recommendations to people who will help you find the right community for mom.  This involves not just cost issues, but also finding people with similar capabilities and interests. These professionals are often paid by the community, much like a real estate agent, so there is no cost to the person moving in.  We can recommend real estate agents who will maximize the value received from the home being sold to pay for the move.

Option 3 -Mom Lives in Her Own Home

Surveys consistently find that the preferred choice is for mom to live in a home of her own.  The preferred option typically is for mom to live in a home she owns without a mortgage, but sometimes there are issues that go along with this option:

  • In some cases, when dad passes away, there is a reduction of income. One option to close the gap and keep mom in the home is for the child/children to write a check each month to subsidize her income.  Another option is to use a Reverse Mortgage to spend the equity in the house.
  • In other cases, a move to a different home is best case. In many cases, the move may be to move closer to the children/grandchildren.  The move may involve moving to another city or state.  If the move is from a higher cost to a lower cost market, there may be enough cash from the sale of the old home to pay cash for a new one.  The children may want to buy and pay for a home for mom to live in.  If mom has enough income to qualify, a traditional mortgage may close the gap between the equity available and the purchase price.  If none of the above solves the funding gap, a reverse mortgage combined with the equity from the sale might be enough for mom to buy the home she wants.

Contact me at 303-469-1254 for resources to help with any of the above.  We know people in many professions that can help with life’s transitions.  Just tell us what you are searching for.  We would be happy to connect you with people who can help.  If a traditional of reverse mortgage might help, we are happy to explain the options.