seniors

Reverse Mortgage Application

What are the steps to apply for a reverse loan?  Is it the same as applying for a traditional mortgage or is it different?

It is just like applying for a regular loan, except the borrower won’t have to make any mortgage payments but they will still be responsible for maintaining their home, paying the property taxes, and Homeowners insurance.

The loan application is standard, but there are many lender, state, and federal disclosures to sign in the  application package.   It does require quite a few signatures and a complete copy of it is left with the applicants to save and review.

Along with the signed application, copies of bank statements, Social Security card, Drivers License, Declaration page for Homeowners insurance, Trust  ( if there is one), and any mortgage statements for the property, plus a signed HUD Counseling Certificate.

The file and documents are sent to a loan processor, Escrow is opened and a Title Policy is ordered, along with an order for an appraisal to be scheduled.

When the loan processor has all the necessary items to make the file complete, it is sent to a Lender for Underwriting.

They review it and make sure it is complete prior to giving it an approval.   Sometimes they may request a few additional items,  but nothing that is unusual.

The next step is to order the loan documents and coordinate with Escrow, assign a Notary to meet with the clients and have them sign the documents.

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The documents are returned to the Closing Department of the Lender, they review them for all signatures, communicate with Escrow to finalize closing figures and after the 3-day Right of Recession, the loan funds and closes.

The entire process takes approximately 45 days as long as the borrower has provided all of the necessary documents that are needed for the file.

Appraisals can cause a delay, or issues with the Title of the property, and sometimes the lack of cooperation from the borrower will cause the loan to take longer to complete.

Applying for a reverse loan is generally not difficult and can be completed in a reasonable amount of time.

 

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Grief, Loss and Christmas

My blog is a place and resource for seniors and their families to explore and learn about reverse loans, but over the years I have written about many issues that concern seniors and what it means to be older.

And this is one of those times when I won’t be talking about reverse mortgages but what it means to have someone die who you loved and how to move through the loss when the pain is so intense.

Everyone experiences death and grief and it is especially difficult the first year and experiencing the Holidays “alone”.  When they are promoted as a time that is supposed to be happy, time with families   ( And that is not always happy, but stressful), someone who is grieving can feel very alone.

I recently met Calista Anderson who is a Certified Grief Recovery Specialist for lunch and we discussed the sadness and grief that too many people are suffering from and the following “post” is her insights and suggestions on how to not shut out grief, but to let it become part of your life and still live fully.

Grief & The Holidays – A Personal Story

Growing up as a child, the holidays were always my favorite time of year. We put my snow globe collection out on display, picked out a healthy Douglas Fir from the Christmas Tree lot and made our rounds through the neighborhoods with the best Christmas decorations. This was a time that encapsulated family gatherings, gift-giving, family unity, and of course, delicious food.  It was also a time when I was reunited with family I didn’t normally see, a pleasant reminder of the love in my life.

While many can relate to the experiences described above, for those who have lost a loved one, the holidays can develop a whole new meaning devoid of cheer. When my mother died in September of 2010, my entire world changed in the blink of an eye. I remember that first holiday season I came to the grave realization that she had been the cohesive force that unified our family. Grief – a five little word that held so much complexity. Not only was our family grieving the loss of my mother, but we were subsequently grieving the loss of each other and the holidays because of her death.

A long and painful eight years passed before I was able to truly heal my broken heart caused by the death of my mother. Despite being successful both professionally and academically, it was evident to me that the memories of my mother haunted me, and her death negatively impacted my happiness, my quality of life, and even my relationships. When a friend had mentioned Grief Recovery, I was a bit taken back – confused about the words “Grief” and “Recovery” next to each other. It was my understanding that “grief” and “pain” were somewhat synonymous and that ultimately the pain from grief was just a sad fact of life every person must surrender to. But, to recover from grief? Needless to say, my skepticism was alive and well.

Prior to Grief Recovery, I had attended grief support groups and benefited tremendously in the short-term from the ability to process feelings, temporarily relieve built-up emotions, and identify with other griever’s experiences. What differed from Grief Recovery, in relation to grief support, was that Grief Recovery was an evidence-based, action- based program that provided long-term relief from grief. In a series of six sessions, I learned all about the misinformation surrounding grief, the proper way to approach myself and others who had experienced a loss of any kind and was able to identify what was left emotionally incomplete with my mother. By going through this process, I was then able to complete the relationship with my mother, resolving my grief, and subsequently transforming my perspective of the memories I shared with her, her death, and my life overall. As a result, the Grief Recovery Method allowed me to re-engage with life in a way like never before. In hindsight, I had no idea how much I was suffering due to my broken heart until I experienced what it felt like to truly heal.

One of the most magical gifts Grief Recovery has given me is the ability to fill my mother’s shoes during the holidays. With my heart mended, I can now be the cohesive force that unites my family during the holiday season. While we will always miss her, she is irreplaceable, and the holidays will never be the same without her, I am grateful that our family is back together. Equally as important, I have fallen back in love with my favorite time of year.

If you are suffering from a death or non-death related loss, or resonate with anything mentioned above, you can contact the author directly at:

LivingBeyondGrief.net

(323) 475 1080

 

Calista Anderson

Certified Grief Recovery Specialist, Living Beyond Grief

(323) 475 1080 | LivingBeyondGrief@gmail.com

LivingBeyondGrief.net

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Reverse Loan Choices

When I first started in the reverse loan industry over 17 years ago, there was only one loan option at the time.  And it was the FHA Home Equity Conversion Mortgage, affectionally known as the HECM.   It is a Line-of-Credit and remains the most popular reverse mortgage that seniors apply for.

Initially, there was one interest rate and no other choices,  but now there are several different rates that a borrower can select, of course depending upon what is the most beneficial to them and their particular goals.  And there are also Fixed-rate mortgages for those who may be sensitive to interest rate fluxations.

And although the FHA loan remains very popular there are additional options for the borrower to choose from, especially if their home exceeds the HUD Lending Limit that as of this writing, is $679,650.00 and they want to access more of their equity than the HECM would provide to them.

So what is the solution to this question when a home’s value is much more than the HUD Lending Limit and especially in those states such as California where the average home value is quite often above 1MM?

A Jumbo reverse loan of course.   And in the last few years what started out as a single offering, has developed into several options allowing more benefits to a senior homeowner.

My next post will share some of the details about them, how they function and whether or not they are always the best choice for a senior who is considering a reverse mortgage.

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Seniors Seeking Additional Money

I have been sharing different ideas in my last couple of posts about the options for a senior if they want to borrower equity out of their home and whether or not they are a good or ideal solution to solve a financial problem or simply wanting extra funds to be available to them for any use.

I’m going to continue this discussion in this post and one more that will follow it in a few days.

In the last couple of days, I talked about the traditional HELOC, the one that every Bank offers to their customers and now  let’s pick up where I left off.

The HELOC will allow interest only payments for the first 5 years, but then will adjust to a much larger payment. Plus, the lender at any time can “freeze” the account and the funds in it will not be available to the borrower.

Too often the borrower is unaware that the loan will be “reset” in the future and if they no longer have the same income as they did when they initiated the transaction, they may not be able to afford the new and higher payment.

Sometimes a senior will use one of these loans for additional income to pay on going expenses, but obviously they will eventually run out of money in the HELOC and of course, will have mortgage payments for the term of the loan.

This can be disastrous for a senior and possibly result in them losing their home through foreclosure if they are unable to afford the payments.

The next possible choice, would be to do a traditional fixed rate 2nd Trust Deed. At least you will know what the payment will be each month, but again the borrower is obligating themselves to a mortgage payment for 15 years and they may not have the income in the future to continue comfortably making the payment each month.

And if they are a senior and or hoping and or planning to retire within a few years, will they be able to afford this obligation every, single month?

So would be the next choice?

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Seniors Don’t Want to Sell Their Homes

In my previous post I shared several reasons why seniors might use a Reverse loan and without being redundant, I won’t repeat those reasons in this one.

If a senior homeowner opts to sell their home and not use a Reverse loan for whatever their goals are, here is what must be taken into consideration.

  • Preparing their home for Listing and doing any necessary repairs and or “sprucing” up the property before it goes on the market.
  • The costs for whatever those repairs and cleaning up might be.
  • Agreeing on a Sales price and Broker fee  ( typically 6%) and entering into a Contract.
  • Allowing strangers to walk through your home that can be disruptive and annoying.
  • Cleaning out years of stuff that have accumulated over time and this can be quite “daunting”.

Now, that’s just the business side of selling a home, but what about the emotional and psychological component?

  • Leaving a home that you have loved for many years and is filled with a lifetime of memories.
  • Possibly leaving behind good neighbors, friends and a community that you are comfortable with.
  • Giving up connections to your Doctors and other professionals who’s services you use to assist with your life.
  • Leaving behind a part of “you” that is ingrained in your home and leaving that part of “you” behind for the rest of your life.
  • Grieving over this experience of leaving…..
  • And the serious question;   “Where will I live and how long will the money I receive from the sale of my home, last”?

Sometimes well meaning family members, think that this is the most logical solution for their senior parents.

But is it?

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