Category: Information for Adult Children

The HECM Reverse Mortgage Maturity Event

Posted on by Sara Cornwall

When a conventional mortgage is taken out, there is always a maturity date. This date designates, if the borrower never defaults, the last payment (including all interest and principal) bringing closure to the loan.

With a HECM reverse mortgage there is a maturity event, that is, a designated event in the borrower’s life which makes the loan then due. Reverse mortgage loans do not require monthly payments which can be quite an advantage for a senior entering into a new phase of life – whether their looking to supplement their income, protect retirement assets and investments, or buy a new home. FHA insured reverse mortgages are offered to those 62 and older based on certain guidelines, such as the home the loan is on must be a primary residence and it must meet HUD’s required guidelines.

Maturity event will be a term the borrower will encounter  several times during the application process and required third party counseling.  It’s very important piece for both the borrower and loved ones to understand.

Here are some examples of maturity events:

• The borrower, (or last borrower if married) passes away.
• The property for which the reverse mortgage is taken is no longer in the borrower’s primary residence.
• The property is sold out of the borrower’s name
• The borrower moves out of the primary residence for more than twelve consecutive months, such as moving in with family or assisted living for care.
• The borrower defaults on property taxes, homeowners insurance, or other obligations to the home.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Can I Get a HECM Reverse Mortgage if I have a HELOC on the Home?

Posted on by Sara Cornwall

reverse mortgage advisor connecticutThe short answer is – absolutely.  And as a matter a fact, HECM reverse mortgages are great options to eliminate HELOC payments.

A HELOC is the acronym for Home Equity Line of Credit, and thousands in Connecticut 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.

Seniors 62 or older with a HELOC loan may be able to utilize a HECM reverse mortgage to relieve the financial burden.  The HECM 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 a monthly payments, line of credit, or a lump sum. 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 and are age 62 or older, put HECM 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.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Can I Sell My Home That Has An Existing Reverse Mortgage?

Posted on by Sara Cornwall

Typically when a senior takes out a reverse mortgage loan on a home, they intend to age there.  But on occasion and reverse mortgage loveland fort collins greeley longmont westminster coloradofor various reasons, the homeowners wants to or needs to sell the home before the loan comes due and payable.  So, what now?

Although this is an important factor, it’s not nearly as daunting as it sounds.  Here’s where to start:

Step 1.) Locate your reverse mortgage loan documents and find any pertinent information regarding the sale of the home.  It will vary from lender to lender.  Most (but not all) reverse mortgage loans are FHA insured.  This means even if you owe more on the loan than the home is worth, you will never owe more than the home sells for.  Consult with a real estate or elder law attorney if you have questions or concerns.

Step 2.)  Contact the reverse mortgage lender to get a payoff quote.  This combined with a home appraisal will give you a good idea of what the sale will look like and what amount of funds you could potentially walk away with.

Step 3.)  Find a real estate agent.  When seeking out an agent, be sure to provide your reverse mortgage loan information up front and look for someone who has experience with such a sale.

Step 4.)  Prepare the home for sale.  From here, everything is similar to any home sale.  You want to prep the home, keep it clean for showings, update anything you may need, etc.

Step 5.)  Sell the home, pay off the reverse mortgage loan (consult with a real estate or elder law attorney if you have questions when paying off the loan), then reap the rewards.  Congrats!

HECM reverse mortgages are available to seniors 62 and over all over Connecticut.  To learn more, contact a reputable reverse mortgage lender.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

 

Should You Pay Off A Traditional Mortgage With A HECM Reverse Mortgage?

Posted on by Sara Cornwall

reverse mortgage advisor connecticutA recently released university report by the Michigan Retirement Research Center and funded by the Social Security Administration showed that 55% of those utilizing a HECM reverse mortgage are using some of the proceeds to pay off a traditional mortgage.

So, when is this a good strategy?

1.) They’re living in a house they can’t afford

When many older adults reach retirement, they have to figure out out how to live on a fixed income and how to make their other retirement assets last for what is often decades.  Tapping into a HECM reverse mortgage will both eliminate the weight of the mortgage payment, and often even allow extra funds to be used throughout the remainder of their lives.

2.) They want to purchase a different home

It’s not uncommon for retirees to purchase a home in retirement.  But few know they can do this with a HECM reverse mortgage instead of a conventional one. This allows buyers to either preserve assets and income, or purchase a home that would typically be out of their price range.  Click here to learn more about the HECM Reverse Mortgage for Purchase program.

3.)  They don’t want to interrupt performing assets

For those with retirement investments that are doing well, drawing from these to make mortgage payments could be a bad move.  Using a HECM reverse mortgage to eliminate mortgage payments can be a win-win in the long run.

HECM reverse mortgages use the equity in your home to allow access to cash through monthly payments, a lump sum, or a line of credit while living mortgage payment free.  The borrower and the home must meet certain qualifications, such as age (62 or older), and HUD’s  home eligibility requirements, and they must also continue to pay and maintain certain responsibilities such as property taxes and homeowners insurance.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Banks vs Brokers vs Direct Lenders – Navigating HECM Reverse Mortgage Professionals

Posted on by Sara Cornwall

reverse mortgage advisor connecticutSo, who are these HECM Reverse Mortgage professionals, anyway?  And how do you know which is the right fit for you?  

I was recently asked by a borrower’s attorney to take over a loan application, because after two months nothing, and I do mean nothing, had been done by the original reverse mortgage 
broker!  It’s frustrating for me to see situations like this when I know full well that borrowers have alternatives – but the borrowers usually don’t know this.  Here’s some information I think anyone considering a HECM reverse mortgage needs to know about the various professionals who work in the industry:

Banks and Credit Unions – Most local banks and credit unions do not offer reverse mortgage loans, although sometimes the larger ones will.  Unfortunately seeking a loan through them can often mean little or no face-to-face time, and it’s not uncommon for these banks to leave the industry down the road.  At one time Wells Fargo and Bank of America were in the business, but they quit, leaving their borrowers with loans that few employees can understand. 

 Brokers – A reverse mortgage broker is a third party individual that is licensed by the state but doesn’t work directly with a lender, instead they essentially shop the marketplace.  When working with a broker, borrowers will pay higher fees because they will have to cover the costs of the broker!  In addition, because all transactions run through a third party, things can easily get slowed down – or even stalled – like in the situation I mentioned above.   

Direct Lender Advisors – This is the category I fall into.  Working directly with a lender that specializes in FHA insured HECM reverse mortgages, such as Retirement Funding Solutions, I’m able to offer local, personal, face-to-face time with clients, and eliminate the need for costly third-party fees.  (Be forewarned most lenders do not offer face-to-face meetings or allow you to work with the attorney of your choice.)  I’m able to do all this while ensuring the smoothest, most efficient transaction possible because I am handling the loan and not farming it out to another company.

HECM reverse mortgages are available to individuals and married couples age 62 and older.  These FHA insured loans allow homeowners to live mortgage and loan payment free until they pass away, permanently leave the home (meaning 12 consecutive months), or they default on financial responsibilities associated with the home, such as property taxes or homeowner’s insurance.  The funds are available via monthly installments, a line of credit, a lump sum, or even to purchase a home. 

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Today Show : Part 1 – How To Help Your Aging Parents Find The Best Place To Live

Posted on by Sara Cornwall

Recently, financial expert, Jean Chatzky, did a three part series on the Today Show called “Taking Care of Mom & Dad”.  Each of these segments specifically touched on real questions adult children have regarding what to expect as their parents age.

The video featured here is Part 1 – How To Help Your Aging Parents Find The Best Place To Live.

Take a few minutes to watch this well done, informative short video.  Find Part 2 here, and Part 3 here. 

 

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Today Show : Part 2 – Is A HECM Reverse Mortgage Right For Your Aging Parents?

Posted on by Sara Cornwall

Recently, financial expert, Jean Chatzky, did a three part series on the Today Show called “Taking Care of Mom & Dad”.  Each of these segments specifically touched on real questions adult children have regarding what to expect as their parents age.

The video featured here is Part 2 – How to Handle the Cost of Aging Parents: Is a Reverse Mortgage Right For You?

Take a few minutes to watch this well done, informative short video.  Find Part 1 here, and Part 3 here. 

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Today Show : Part 3 – Helping Parents Make Legal, Medical, and Financial Decisions

Posted on by Sara Cornwall

Recently, financial expert, Jean Chatzky, did a three part series on the Today Show called “Taking Care of Mom & Dad”.  Each of these segments specifically touched on real questions adult children have regarding what to expect as their parents age.

The video featured here is Part 3 – Helping Parents Make Legal, Medical, and Financial Decisions. 

Take a few minutes to watch this well done, informative short video.  Find Part 2 here, and Part 1 here.

 

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

The Reverse Mortgage Home Appraisal

Posted on by Sara Cornwall

reverse mortgage advisor connecticutGetting assessments on just about anything can seem laborious or tedious; who wants to have something close to them looked at with a magnifying glass? But appraisals for HECM reverse mortgage loans are not only very helpful for everyone involved, they’re required by the lender.  Part of what determines the amount of funding available from a reverse mortgage is the appraised value of the home.  Luckily the process is pretty simple.

First, after talking with a reputable reverse mortgage advisor, you will submit your application. The advisor or lender will be the one to contact an appraiser who will in turn contact you to set up a time for them to look at your home.

The procedure is standard and involves three steps, the inspection, the research, and the report.

Inspection:

The appraiser will walk through your home with you, he or she might take photographs. It will document features that add value to your home. If the appraiser takes a picture of something in need of repair it lets you know that it matters and gives you a chance to fix it.

Research:

Once the walk through is done, the appraiser’s work continues as they research factors that influence the value they place on your home. Home sales in your area are one area of research. Others include multiple listing services, tax assessor’s records and public records come into play. Anything that will help to give the present value will be taken into account.

The Official Report:

This is the synthesis of the appraiser’s home visit and all the research. The report is used with your loan request. If photographs were taken, they will be included as well.

The appraiser gives this report to the lender who will give you a copy and an updated reverse mortgage figures taking into account the new information.

Reverse mortgage is an individualized, specialized loan for those 62 and older that allow older individuals and married couples 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 reverse mortgage advisor guide you in the many scenarios that are possible, and the two of you can discuss your needs and desires.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

Do You Need A Connecticut Elder Law Attorney?

Posted on by Sara Cornwall

reverse mortgage advisor connecticutElder law is a relatively unknown segment of law and is often overlooked when seeking legal solutions.  But for some older individuals and their families 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 are nearly exclusive to the senior citizens and 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 older does not mean they need an elder law attorney.  Elder law is focused on legal problems specific to the older demographic.  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 HECM reverse mortgages.  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.  Although reverse mortgages can be an excellent and safe tool for many homeowners, they are not for everyone and are most effective when used as part of a financial and/or estate plan.  They 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 advisor.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.