running out of money

November 26, 2018 Reverse Mortgages No Comments

HECM or Jumbo Reverse Loans

Due to some recent changes in the last year, the FHA reverse loan has lost some “traction”, due to the return of the historical MIP calculation, a reduction in the amount of funds available to the borrower, and most recently a collateral review of each applicant’s appraisal.

And if there are any concerns that the first appraisal may have been inflated, a second one will be required at a cost to the borrower and no one would like being told that they might have to pay for an additional appraisal.

This latest policy change will cause the loan processing period to possibly extend out an additional two weeks, but this will be another post for a later date.

But like the Calvery coming to the rescue, Jumbo reverse loans might very well be an ideal solution for some senior homeowners as there are more options to consider then there were in the past.

Jumbo reverse loans are less expensive than the FHA option and ideal for those properties that would be considered “high value”, such as 1MM or more and for California, that could apply to many seniors who own a home which might exceed the current HUD Lending Limit of $679,650.00.

Another name for this option is a proprietary reverse loan, meaning it’s not a government program as the FHA loan is, but is offered though investors and they work exactly like the traditional reverse mortgage.

And what are the new proprietary loans like and how similar are they to the FHA reverse loan?

I will share those details in the next post very shortly.

August 10, 2018 Jumbo Reverse Loans, Reverse Mortgages No Comments

Reverse Loan Choices

Most of the reverse loans that are originated are the FHA HECM program and over the years has been the “workhorse” for allowing seniors to utilize their home’s equity without having to qualify for a mortgage payment.

And as of this post, that continues to be the most commonly used reverse mortgage, however, in the last few years, another option has become available to seniors, especially those who have expensive properties at one million dollars or more.

The FHA HECM loan has a cap on the value of the subject property ( As of 2018) of $679,650 and the new loan will use that as the maximum appraised value, a percentage of “that” and the youngest borrower’s age to determine the amount of money the senior will receive at the close of escrow.

But what if you want more money than it will provide or you have a large mortgage you want to be paid off, but the funds in the HECM are insufficient to achieve this goal?

A Jumbo proprietary reverse mortgage might be the solution because the loan will consider properties valued as much as 6MM and as low as $700,000 and the interest rates are “fixed”. An additional benefit would be if someone lives in a Condo that is not on the approved FHA Condo list (That means they cannot do a HECM), a proprietary Jumbo reverse loan is the answer to this common problem.

An additional benefit to using this loan is that the Closing Costs are less than the FHA HECM because the borrower is not being charged the MIP insurance premium that all FHA loans require. And some are not charging an Origination fee, making the loan much more inexpensive to the borrower in comparison to the HECM.

As more lenders are offering Jumbo reverse loans and the industry evolves to meet the demand for them, I am sure that there will be new programs and opportunities for seniors to access the equity in their homes into the future making their retirement years more affordable and comfortable.

July 24, 2018 Reverse Mortgages No Comments

Decision Making and Fears

I think it tends to be human nature in that for some people, they hesitate to make a decision for just about everything that requires one. Whether it is getting married or maybe divorced, having children, taking a leap at a new career or choosing a paint color for their house.

And it’s prudent not to blindly rush into anything, you should be well informed before making decisions that are especially crucial to your life.

Most of the time these decisions are minor, but what about the ones that are not and could potentially have a huge impact on your life and future?

Sometimes this hesitation comes from looking for the best price for something if you are considering doing a large purchase, but other times it comes from a place of being worried about the possibility of making a “wrong” decision.

See what my clients are saying!

Or not being educated enough about whatever it is you are considering. So, you put off making any decision about it indefinitely.

A good question to ask yourself is, “what is the worst thing that could happen if I make a decision and it turns out to be awful?” Asking yourself that question can potentially take away your fear and help you to move forward.

However, hesitating or waiting can continue for a very long time and it can be costly. And what is the “cost’ of waiting?

If you are hesitating in learning about reverse loans because you have heard “bad things” about them, why are you allowing yourself to be influenced by other’s opinions that generally are incorrect instead of doing some research with a professional?

What is this inertia costing you every month that you wait to find out how much money you could possibly receive from the HECM loan?

It’s fear.

June 21, 2018 Retirement Planning No Comments

There Are a lot of Boomers

10,000 Americans each day are turning 62 and few of them have any funds saved for retirement and those that do, are underfunded in their retirement portfolios and they may not have enough funds to protect them as they grow older and face medical expenses due to aging and other unplanned life events.

I feel that the FHA and proprietary reverse loans will become part of everyone’s retirement plan, because a home is a senior’s greatest assist and why not use the equity in it to pay for unplanned expenses and still be able to remain in their home?

Seniors will start to see that by using a reverse loan to assist in funding their retirement as a viable option to protect them from drawing down on their retirement funds too often and also potentially avoid tax consequences such as paying Capital Gains on any withdrawals.

It’s an obvious and safe solution and should not be overlooked by any senior homeowner and they owe it to themselves to consider the loan as a possible solution allowing them to eliminate their concerns, age in place and not be afraid to consider its use as a possible solution to remaining financially secure.

http://reverseloanmoney.com

May 11, 2018 Caring for aging parents No Comments

The Costs of Care Giving

As the Boomer population ages and the reality begins to loom that at some point they may need someone to provide them with “care giving” but no one wants to talk about this possibility happening to them.

But as we age and I’m going to be 72 myself ( Yikes, when did that happen?) our bodies are going to start to give us trouble as we begin our slide down the slope of aging and at some point, we may need help.

Ideally the Boomer generation has taken better care of themselves then our own parents did and we certainly are much more active than their generation who smoked, didn’t exercise and had high fat diets.

But at the least, they didn’t have as much stress in their lives as we seem to have in our’s and their generation lived a much slower daily pace compared to the hectic lifestyles so many of us have in this period of time.

Hopefully those of you who are reading this post and are of a “certain age”, will manage to dodge falling apart and having to rely on a care giver. But what happens if you need one and you don’t have Long-Term-Care Insurance?

Medicare will not pay for this service in case you were under the impression it would, you have to pay for it.

You will have to rely on your own retirement funds if you happen to have any and pay a professional care giver or rely on family members to take care of you. And that’s a terrible option.

There are two kinds of “costs” in this equation, the actual monthly expense that can run $4000 or more each month while you are helpless or the physiological and turmoil and burden to your family members who will be overwhelmed by the responsibly of taking care of you.

And if you don’t have enough funds to cover this expense, it will be up to your children to pay for it and in many family situations, the adult children will fight among one another and it typically will fall to one of the children to pay for all the expenses and also to attend to your needs. And the one’s who refuse to help in any capacity, will disappear.

As for paying for the care of a professional, licensed and Bonded care giver that expense could be paid by the funds from a reverse loan and it will become a safe and valuable option for money to cover the costs and relieve the adult children from using their own funds to pay for your care.

It’s something to think about, utilize one’s equity to pay for your own needs and not rely on your adult children and keep your dignity and keep your family intact.