Thursday, December 20, 2012

The Downsizing Dilemma

 
With the economy not showing too many signs of getting better and kids out of the house many seniors are thinking of downsizing their home to help fund retirement.  While this sounds like a good plan, there are things you need to consider before you call your realtor.  The Wall Street Journal recently published an article talking about this subject and it mentioned some good points.  Specifically the article mentions:

  • The current real estate market.  During the recent election it seemed that all the real estate news you heard was the market was getting stronger, values were starting to increase, and people were buying homes again.  While this has some truth to it, can you really believe everything the media tells you?  Take a look at your area, is this really the case with people you know who are selling their homes?  If it is then putting you home for sale may be a good option, but if you live in an area that most people live in today, you may want to think twice or at least do some good research before you list your home.
  • Dealing with the emotions of moving.  How long have you lived in your house?  I recently moved from a house I lived in for 10 years and while packing realized we have accumulated A LOT of stuff!  We also had some great memories in our house and it was hard to leave, especially for my wife an children.  How would that have been after living there for 30, 40, or 50 years?  What would my family have said then?  Just a few things to consider...
  • Do you really save money?  An average commission paid to a real estate company to sell your home is 6% and then factor in moving costs you could end up paying a lot of unexpected money to downsize.  Plus is you move into a condo or town home, your payment may be less or non-existent, but you still have HOA fees that can be in the $100's per month.  Make sure you do your research on all the costs first!
  • Do you fit?  As mentioned above we all have a tendency to accumulate stuff over the years.  It's important to make sure all your possessions will fit into your new smaller house.  If not you may be forced to sell items you really don't want to, or pay a fee for a storage unit which will add to your expenses.
There are many things to consider before you downsize your home; if you want to increase monthly cash flow without changing homes there is an alternative.  The reverse mortgage program can be a great way to stay in your home and get rid of your mortgage payment.  To see if you qualify try our reverse mortgage calculator.

If you would like to read the Wall Street Journal article in its entirety click here.


Saturday, November 3, 2012

It's Time To Review Your Estate Plan.

Nest EggHow long has it been since you have looked at your estate plan?  We as humans have the tendency to do a big important project and then put it on the shelf and forget about it.  In Utah I have seen and am guilty of doing this with things like 72 hour kits and food storage; one we feel we are prepared for some future event and have mentally checked that off our list of things to do we can in a sense, "set it and forget it."

Well you should not do that with your estate plan.  Our lives are constantly changing and therefore our plans should evolve too.  After doing some research on the Internet on this topic, I have found 5 good reasons to review your estate plan.

Relationships

Unfortunately things like divorce, death, family and other issues occur in our lives.  You need to review your estate plan to make sure the the beneficiaries are correct and that your relationship with them have not changed.  If one of your children have been divorced you may not want to leave something to the ex-spouse.  This also is true for any beneficiaries outside of your family.

Children

You may have had young children when you first prepared your estate plan; but kids have the tendency to grow up.  Do they still need the protections you originally put in place for them, or do these things need to be updated?  You may also want to add your grand kids which may not have been in the picture before.

Health

What kind of health care directives do you have in place in your estate plan?  Do you have protections in place in case you or your spouse are incapacitated?  One thing for sure as we age, our health seems to age too and this needs to be taken into account when reviewing your estate.

Property

As we go through our lives we tend to accumulate more and more things.  Not only do we buy more stuff we also sell our stuff too.  The car and house you originally had when you set up your estate may be different.  What plans do you have for your property?

Your Legacy

Many seniors I talk to are concerned about leaving a legacy for their family.  Whether it be money, items, or just memories, this is important to most of my customers.  Your estate plan should be reviewed to make sure you are leaving the legacy you want too.  Also something that should be considered is giving while you are still living.  This is becoming more popular (and wise in some circumstances for tax reasons) among baby boomer and seniors because they want to see the beneficiaries life's changed as a result of their giving.  This can truly be a "Living Legacy"

A reverse mortgage can be a great way to help you accomplish your living legacy.  You can still live in your home while you start giving your assets to your heirs.  This is just one of the many benefits of the reverse mortgage program.

Now, if you don't have an estate plan it's not too late.  I have over the years, formed a network of trustworthy and upstanding financial and estate planners who have taken good care of my customers when needed.  If you would like to get in touch with someone in my Utah network, let me know and I'll be happy to assist you.  Email Me or call me at 800-431-9250.

Friday, October 19, 2012

A picture is worth a 1000 words

If you are wondering how a reverse mortgage works, here is a picture that explains it very well. Just remember when looking at the "fees" section, we currently do not charge an origination fee or a servicing fee.

Reverse Mortgage Infographic

Tuesday, October 16, 2012

3 Reverse Mortgage Videos

Reverse mortgage videosIf you have a big decision to make chances are while you are going through the decision making process you will want to talk to someone who has been through a similar situation.  Getting a reverse mortgage is no exception...it is for most people a very big decision.  The problem is, most people don't talk about what type of home loan they have so it can be hard to know who to talk to when considering a reverse mortgage.  Well, a company called Reverse Fortunes has made it easy for you to learn from others in your situation.  They created three videos of people who have taken advantage of the reverse mortgage program and wanted to talk about their experience.  If you are thinking about a reverse mortgage, take a look at these videos.  It is always better to educate yourself as much as possible before you make a final choice, and who better to have explain things than someone who already is in the program.





Monday, October 8, 2012

When Should I Get A Reverse Mortgage?

Reverse Mortgage DiceA question I often get from potential customers is whether they should wait to take a reverse mortgage or do it now.  The reverse mortgage is similar to social security in that the older you are the more money you qualify for.  The timing of a reverse mortgage is important and there are many things to consider when choosing whether to get it now or to wait a few years.

Reverse Mortgage Qualification

The first thing to consider is how much you qualify for.  If you don't qualify now then the choice is easy, but if you do then there are some other things to consider.  The first thing is what are you going to do with they money?  If you just want to get rid of your mortgage payment then now is as good a time as any.  If you need the money for health or other bills, then sooner is better too.  If you just want to go on a trip, or buy things you don't really need then you should reconsider getting a reverse mortgage now.  The reverse mortgage was set up to supplement your retirement and the money should be used for that.  If you go and blow it then what will you do if you need it in the future.  Yes you will be able to live in a house payment free, but if you can't afford your taxes and insurance you can be foreclosed on!

The other part of qualifying you need to think about is the real estate market.  Many people think that the market is starting to turn around and values may go up.  If the area you live in is prime for an increase in value, then waiting may be a good option, especially if you don't need the money now.  On the other hand, there are still a lot of areas that are not increasing in value.  In these places you should look into the reverse mortgage now because if values go down, it may make it so you don't qualify for as much or at all!

Interest rates also come into play.  Currently rates are at historic lows, so it is a great time to qualify for more money with the lowest interest rate.  If you have been holding out for lower rates, now is probably your time to move forward.

Age and Future Plans

When applying for a reverse mortgage the older you are the more you qualify for.  If you don't need the money now and do not see the house values in your neighborhood dropping in the future, then waiting may be the best way to go.  If you are planning on moving to a new house in the next year or two, then you should wait too.  There is no since paying closing costs to do a reverse mortgage just to sell your home and move in the near future...just wait and do the reverse on your new house.  Another age related issue that comes up is your spouse.  If you are considering a reverse mortgage and your spouse is not old enough, you should in most cases wait so you can both be on the loan.  If you cannot wait, you can still get a reverse mortgage, but there are some risks that need to be considered.

That Darn Government

One misconception about the reverse mortgage is the government can end up owning your home.  I hope if you are a reader of this blog or have spent much time on our reverse mortgage website you would know that is not the case.  What is the case is that the government or more appropriately the FHA insures most reverse mortgages so the lender is not at as great of a risk.  But with about anything the government does they can change their mind.  Budgets get cut, leaders come and go, and things change.  Over the past 3 years, the government has decreased the amount of money it will allow people to qualify for two different times and increased the mortgage insurance amount once. All this did was make it harder for people to qualify for the reverse mortgage and then make those who did qualify not get as much money.

Conclusion

Getting a reverse mortgage can be a big decision and the timing gives you one more thing to think about.  The bottom line is if you do not have an immediate need you need weigh all your options carefully before proceeding.  Our office has specialists who will give you all the details up front so you can have the info to make an informed choice.  Call 1-800-431-9250 to schedule a no obligation consultation today.

Wednesday, September 26, 2012

Should I Downsize My Home?

downsizing your homeAs many seniors get older and the kids move out they are faced with a choice; should I continue living in the home I have lived in and raised my kids in for the past however many years, or move to something smaller?  The 55 and older communities can sound attractive with all the amenities and activities; plus it is nice to not cut your lawn or shovel any snow.  Some people look to a condo or townhouse to move to in their retirement years and others would just as soon buy that big RV bus and travel the country.  Whether you stay where you are or try a new place, there are pros and cons to everything.

The first thing you have to consider are the expenses.  The first expense that people encounter is the cost to sale and move.  Unless you are a great marketer and can sell the home yourself, you will need to hire a Realtor.  Most Realtors are good at what they do, but you have to pay them on average a 6% fee to market and sell your home.  On a $250,000 home this is $15,000 right off the top, not counting the costs to actually move which usually are more than you think.  A smaller home in a retirement community may be have cheaper utility bills every month, but you also have to consider the HOA fees that many of these communities have.  Depending on the amenities, these fees can easily be over $100 a month.

Next you have to consider how your family will feel.  Even though it is not your kids decision with where you will live, they certainly will have some iffy feelings if you sale and move the home they grew up in.  Some kids don't care, but some are very sentimental.  You may even be feeling that way, by leaving the place where you have made so many memories.

The last thing; What in the world are you going to do with all your stuff?  Over the years we can collect a lot of things.  Sure there are probably a lot of things that can be given to your kids, or just thrown away, but for the things you want to hang onto, will your smaller house have room for them?  There are actually 3rd party companies you can pay to help you decide what you should keep and what you should get rid of.  While this can be a great idea because they are not emotionally attached to your items, this is another expense you will have to consider.

Moving into a smaller house during retirement can be a great option.  Less space to have to clean and upkeep, possibly cheaper mortgage and utilities, and maybe some more opportunities for additional activities.  If this option is for you, then now is probably a great time to buy a new home.  Unfortunately it is a bad time to sell a home.  Many seniors are deciding just like the "stay-cation" has become popular instead of the "vacation" it is better to stay at home during retirement.  If you are feeling this way, the reverse mortgage may be a good option for you.  It allows you to stay in your home and not make a mortgage payment.  If you qualify, it may also give you some extra cash to help supplement your retirement.  If you are looking into downsizing your home to save money, before you do so, check into the reverse mortgage program; you may be surprised at how inexpensive it is along with all the other benefits you get by staying in your home!  To see if you qualify, try our reverse mortgage calculator.

Thursday, September 20, 2012

Help Spread The Word

Spread the word about reverse mortgages in utahI started this blog to help get the reverse mortgage message out to seniors 62 and older in Utah and the response has been great so far.  The amount of page views this site has gotten in just 6 weeks has been amazing, but now I need more help to share this message!

I recently read an article talking about the number of seniors who have heard of a reverse mortgage and I was pleasantly surprised to hear the number was 78%.  I thought it would me lower than that, but I guess I shouldn't be all that surprised with all the TV commercials with high profile celebrities pitching this program.  What I found interesting though was that out of the 78% who had heard of the reverse mortgage, only half of them understood what the program what about, or just 39%.  My guess that most of the 39% either have a reverse or have looked into it before.

These numbers are based on a national survey, but if they hold true for Utah, then 61% of those eligible for this program either do not know what it is or have been misinformed.  If you are reading this and know someone who could benefit by having a reverse mortgage, please spread the word! 

To qualify for the reverse mortgage in Utah and the country you must:
  • Be 62 years old or older
  • have around 50% or more equity in your home
  • have a home or home owners association that is FHA approved.
These are all the things you need to qualify...no credit, no income, no assets, and with the reverse mortgage...NO MONTHLY PAYMENT!

You can share this post with your friends on most social networks with the links below and to the side.  You can email a link to this blog  www.reverseutahblog.com or to our main website at www.reverseutah.com, or better yet, just call me toll free at 1-800-431-9250 and I will be happy to explain the program to you.  There is no pressure.  This is simply to get educated on the different options out there to help supplement your retirement.

Tuesday, September 18, 2012

Cost Of Living And Reverse Mortgages

Cost of living and reverse mortgagesMany in Washington think that Social Security and Medicare are the two most important items on the average seniors mind during this presidential election, but a new report from the AARP shows that is not the case.  According to the anxiety index which was determined by surveying 1852 registered senior voters in July, 75% said they were most worried about prices rising faster than their incomes.

That number is staggering, but not surprising.  I just met yesterday with a perspective reverse mortgage customer that has a paid off home and has enough money from social security coming in every month to pay all her bills, but nothing more.  She is considering the reverse mortgage as a hedge against the rising cost of living expenses, and from the sound of the survey, she is not the only one nervous about this. 

So how can the reverse mortgage ease your mind on these troubling economic issues?  Well as I explained to my customer yesterday, the adjustable rate reverse mortgage allows you to have a monthly payment sent to you for life from the proceeds of a reverse mortgage.  My customer qualifies for a large lump sum, but she does not need that much, just a few hundred dollars more a month will really allow her more flexibility, so that is the option she is most considering.

If you or anyone else you know is worried about the cost of living rising, especially if you are over 62 and on a fixed income, you should really consider the reverse mortgage.  This program can be set up to pay off any debts you have and then any additional money you qualify for can be sent monthly to you to help supplement your retirement.  To see if you qualify, try our reverse mortgage calculator.

Here are some additional statistics found from the AARP survey:

  • 50% of baby boomers don't think they will ever be able to retire
  • 59% say the current economy will make them rely on social security and Medicare more
  • 62% say they are the most concerned about health expenses
  • 73% said not having financial security in retirement causes anxiety
  • 71% are concerned about paying too much in taxes
  • 30% say they regularly worry about keeping up with their mortgage payment
  • 72% of non retired boomers believe they will have to delay retirement

 

Wednesday, September 12, 2012

Reverse Mortgage vs. Home Equity Line

Reverse Mortgage vs a HELOCOne of the biggest reverse mortgages myths are that they are very expensive.  While they do have fees associated with them that are often misunderstood (and a lot lower than they used to be), many financial and estate planners still recommend their senior clients look at a home equity line of credit over a reverse mortgage.  This brings up the debate, which is better...a HECM or a HELOC?

The HELOC stands for home equity line of credit and is available at almost any bank with relatively low fees.  In some cases you can borrow up to 100% of the value of your home using a HELOC and you only pay interest on the money you use.  This sounds good to most people, but there are some other things to know.  Most home equity lines of credit have adjustable rates tied to the prime rate.  This has not been much of an issue the past few years, but once the economy starts to recover the Fed will have to start raising interest rates which directly affect the prime rate.  This rate can change monthly which means your payment can change monthly.  HELOC's also have a monthly payment associated with them that must be paid or else the bank will foreclose.  You also have to show income, assets and a good credit score in order to qualify for a home equity line of credit.

The HECM stands for home equity conversion mortgage or reverse mortgage.  The reverse mortgage is not as radially available as the HELOC, meaning not all banks offer them.  The closing costs for a reverse mortgage are higher than a home equity line as well and depending on your age you can borrow between 62 and 78% of the value of your home.  To get a HECM loan though you do not have to have high income, lots of assets, or good credit to qualify, you just have to be 62 or older and have enough equity in your house.  With the reverse mortgage you have no monthly payment due while you live in your home and the only way to be foreclosed on is if you fail to pay your property taxes and insurance.  The reverse mortgage has a variable rate option with rates comparable to home equity lines of credit as well as a fixed rate loan.

So which is better?  That depends on your situation.  If you have a short term need for some money that you will be able to pay off quickly then the home equity line of credit is probably your best choice.  Or if you do not plan to stay in your home much longer, meaning less than 2-3 years then the HELOC is what you should consider.  On the other hand, if you are on a fixed income and are planning to stay in your home, you should seriously look into the reverse mortgage.  With a fixed income it would probably be harder to take on another payment, especially one that has the potential of changing all the time.  When you have a reverse mortgage once you have the loan, it cannot be taken away.  The HELOC on the other hand can be closed by the bank if they feel you are a potential credit risk, even after the line has been open and even if you are current on your payments!

The reverse mortgage is not for everyone, but if you are looking into taking out a home equity line of credit on your home, before you do so, do some research on the reverse mortgage.  You may be surprised at what you find.

Tuesday, September 11, 2012

Let Us Never Forget

September 11th FlagsToday marks the 11th anniversary of the September 11th terrorist attacks.  I remember how the country came together after that day.  We were not Republicans, Democrats, or devided by religious beliefs.  We were not black or white, or from the North or the South.  We were all Americans!!  It was too bad such a terrible thing had to happen to wake us up and remember that fact, but I hope we will never forget.  Never forget that we are all Americans and citizens of the greatest country in the world and we should be proud to say so.  Never forget that we have overcome so much in our history and that by working together we can accomplish anything!  Please enjoy the pictures and take a moment to remember how blessed we are in this country.
Support Our Soldiers

Proud To Be An American

Never Forget September 11th

God Bless The USA

Friday, September 7, 2012

Choosing a reverse mortgage specialist

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I found a great article online yesterday and because it has such good information I thought I would just post the whole thing here on the blog.  If you are looking into a reverse mortgage and have done some research and have decided it looks beneficial, but you don't know who to go to for help getting the loan...this article is for you.  The article was written by Amara Rose and was posted on HECM World's blog.  The link to the original article is here.

Here is what she says:

Six Steps to Selecting a Reverse Mortgage Professional

You’re retired, have solid equity in your home, and have been seeing ads for reverse mortgage, or HECM (home equity conversion mortgage). You’re thinking this might be beneficial for you now. How do you go about choosing the right professional to assist you?
Here are six guidelines for selecting a reverse mortgage originator (also known as a loan officer):
#1: Experience. In any field, experience is primary, and nowhere is this more crucial than when it comes to your home and financial security. Ask how long the reverse mortgage professional has been doing this type of work, and note from their response whether he or she seems to enjoy it.
A corollary to the above: is reverse mortgage lending all this person does? You want someone who has a passion for serving seniors, and who will be focused on you — not someone who’s dividing their time and attention between other types of loan activity. Because reverse mortgage is unique, it requires a dedicated specialist. After all, you wouldn’t consult a foot specialist for a hearing problem, right?
#2: Education. Like other professions, the reverse mortgage field has licensing standards. An NMLS (Nationwide Mortgage Licensing System) number tells the consumer a reverse mortgage originator has “passed a background check,” so to speak, and is generally competent to handle loan transactions. Another measure of education is how well the professional knows the history of the reverse mortgage industry, and can explain how this impacts you as a potential borrower today.
You’ll also want to ask about continuing education. Someone who has earned their CRMP designation — Certified Reverse Mortgage Professional (NRMLA) — has demonstrated superior knowledge and competency in the reverse mortgage field, and is dedicated to upholding the highest ethical and professional standards.
#3: Reputation. Business, like life, turns on relationships. Ask your prospective reverse mortgage originator which professionals in the community can recommend them. Financial planners, elder law attorneys, CPAs and senior care providers are all good sources who can potentially speak to a loan officer’s reputation.
#4: Resources. You want to be sure the company you choose can meet your needs. Ask whether they offer a variety of reverse mortgage products, such as both the Traditional (Standard) and “Saver” HECM, as well as fixed and adjustable loan rates. A full portfolio of products gives you more options for making the best choice for your specific situation.By the same token, ask, “How large is your organization?” While you don’t need to deal with a huge company, you do want the group you select to have a consistent track record of closing loans and handling consumer needs.
#5: Service after the sale. A reverse mortgage, by its very nature, implies an ongoing relationship. Ask, “What’s your policy after the sale is complete? Will you be available to answer any questions I may have, and later for my children if they need help selling the house?” Ideally, the company you choose will have been around long enough to have assisted the families of those who’ve purchased a reverse mortgage, once it’s time to pay back the loan.
#6: Planner vs. Product Promoter. As noted above, you’ll do best with a loan officer who cares deeply about seniors and is focused on the big picture: your income, your expenses, your health, how long you plan to remain in your home, etc. — all of which helps to shape the type of product you choose. A reverse mortgage professional whose first concern is senior service will be your partner in making a wise financial decision.

I hope you enjoyed Amara's article, now here's my plug...  If you are interested in learning more about the reverse mortgage program, I feel like Reverse Mortgage USA's Utah branch meets or exceeds every one of these 6 qualifications.  To learn more, visit our About Us page.

Wednesday, September 5, 2012

Do both the husband and wife need to be on the reverse mortgage loan??

Distressed SeniorAs a reverse mortgage loan officer I make a commission based on the loan amount when the loan closes and funds, so the higher the loan amount the more money I make.  Sounds good right?  I recently ran across two different couples who are now having issues with their reverse mortgages because some greedy loan officer decided to make more money instead of do what is best for the customer.  So in answer to the title question...YES you do not need to have both the husband and wife on the reverse mortgage loan.  BUT there are some risks to this, so read on to learn more!

The first couple I met with got a reverse mortgage about 3 years ago.  At the time the husband was 64 years old and the wife was 61, but would be turning 62 in 3 months.  Instead of waiting until they both were 62 the loan officer pushed them into doing the loan in just the husbands name only.  At the time the loan officer probably said you need to do this now, you never know what home values will be like in 3 months, or what rates will do; all the while thinking to himself I want to get paid now instead of in 3 months.  This is unfortunate because now the couple came to me to add the wife onto the loan (she is now 65), but because they didn't wait 3 months back then, this will now cost them over $20,000 now because the value of their house has dropped since then and they have accrued interest over the past 3 years.  I did not do the loan for this couple although they really considered pulling the money out of their retirement account to make the deal work.  I advised them to talk to their financial planner instead and use a portion of the money they were going to have to bring in to do the reverse mortgage to buy a life insurance policy to cover the difference if the husband passes away prematurely.  I feel bad for this couple, and I hope the loan officer they worked with 3 years ago is not in this business anymore.

The second couple I am working currently with had the exact same thing happen to them only at the time they did the original reverse mortgage, both spouses were old enough to do the loan, but the loan officer at the time again was greedy and only put the loan if the husbands name because he is 12 years older so the loan amount would be bigger so he could make a higher commission.  This couple is in a bad spot now because the husband is being forced to move into a long term care facility because he has early Alzheimer's, so a life insurance policy will not help.  In this situation, the wife is not on the loan and is going to loose the house because the husband has moved out and will not be coming back.  The families estate attorney found me via this blog and my reverse mortgage website and I am now in the process of refinancing the loan for this couple and adding the wife to it.  The situation is the same as the first couple and she is going to have to bring in a large amount of money to to add herself to the loan, but for her, that is better than moving.

Bottom line is; if you are considering a reverse mortgage and your loan officer is counseling you to only have one spouse on the loan YOU NEED TO GET A SECOND OPINION!  There are situations where this is the only option and that is OK, but before you go ahead, think about the long term consequences.  If you are in need of a second opinion, call our company at 1-800-431-9250 and we will be happy to give you all your options, even if you don't use us for the loan.

Thursday, August 30, 2012

Using a Reverse Mortgage to Pay For Home Care

Home health care and reverse mortgagesAging happens.  It's something we cannot avoid.  If you are getting older and are in need of home health care, how are you planning to pay for it?  Unfortunately, Medicare does not pay for home care, you must go to the hospital, but who wants to do that if they don't need to?  If you do not have long term care insurance or a lot of money in the bank you need options!  One option many Utah seniors have is the reverse mortgage.

If you are over 62 and have enough equity in your home, you can borrow a portion of that equity to use for whatever purpose you want, including home health care.  Home care has many benefits, not the least of all being able to stay in your home where you are comfortable and where you want to be.  If you do not require much assistance, or just custodial care where you do not need a licensed professional, you can even pay your children or other family members to help you with your care.  This can be a great option because it allows you to spend quality time with some of your family members, and also gives you the chance to pay them for their help.  For many seniors, a reverse mortgage is all you need to start getting the home help you need.  To see how much you qualify for with a reverse mortgage and to see if it will be worth it for your home care needs, try our reverse mortgage calculator.

If a reverse mortgage alone is not enough, you have other options.  While Medicare does not pay for home care services, Medicaid may.  There is a program called the Cash and Counseling program, that can help cover the costs of home health care, and even pay your children if they are the ones providing the care.  These programs differ in every state so it is important to know you local laws.  Utah is "spend down" state, which looks at your income and if you can not afford the cost of the care, you will qualify for help.  For more info and a list of states you can click here.

Whatever your health care costs are, it is nice to know you have options available to you.

Tuesday, August 28, 2012

Your Grandkids Are Coming! Better Be Ready.

I want to take a break from the reverse mortgage stuff and talk about something else that most Utah seniors have to think about...THE GRANDKIDS!  Having your grandkids over to visit can be a rewarding and fun experience, but it can also be dangerous!  Here are 15 easy tips on how to grandchildren proof your home.
  1.  Pick up or move small items or breakables off lower shelves and tables
  2. Secure any outside doors, especially if they lead to a street or pool
  3. Put all poisonous liquids on a high self or behind a locked door
  4. Install baby locks on any draws or doors you don't want opened
  5. Set your water heater below 120 degrees
  6. Put safety gates on stairways or hallways you don't want them to enter
  7. Get a baby monitor
  8. Keep all hot liquids out of reach and keep pot handles turned inward when on the stove
  9. Invest in a high chair or booster seat
  10. Buy a pack n play for nap and bedtime
  11. If you have a crib, make sure it meets the latest child safety standards
  12. Have some children's books on hand
  13. Keep a box of some toys to play will (make sure they are age appropriate for little ones)
  14. Take lots of pictures
  15. Don't be afraid to have fun and remember most messes can be cleaned up!
A couple of other things to remember are to be well rested before the grandchildren come over; it is easy to forget just how busy they can be and how much more energy they have than you do!  Also if you are physically able, get down and play with them.  Your grandkids will remember the times they got to wrestle, or play cars or dolls with their grandparents.

Thursday, August 23, 2012

Refinancing a Reverse Mortgage??

Refinancing a reverse mortgageThere is a misconception out there that once you get a reverse mortgage you are done; no more watching what the rates do or if closing costs go down.  Once you have a reverse mortgage you can get up to refill your water glass when the mortgage commercials come on while you're watching TV because this now doesn't apply to you.  Many people think that the reverse mortgage is the last loan they will ever get.  While this is true for many reverse mortgage borrowers, the fact is: You can refinance a reverse mortgage! 

Refinancing a reverse mortgage is easy and cheaper to do.  There is never a prepayment penalty with a reverse mortgage so if the rates drop or if your house value goes up, you can refinance to better your situation.  The loan is cheaper the 2nd time because of a new regulation implemented by the US Department of Housing and Urban Development.  Instead of paying the full upfront mortgage insurance premium (MIP) on a refinanced reverse mortgage, the new regulation would enable a borrower to be credited for the amount of MIP paid on the first loan.

In many cases the MIP is the most expensive cost associated with a reverse mortgage, so not having to pay that again can really make a refinance cost effective.  Some of the most popular reasons to refinance a reverse mortgage are:
  • Interest rates drop
  • House value goes up
  • Add a spouse that was not on the original loan
The thing to remember is once you have a reverse mortgage, you are not locked into the loan.  You can refinance it at any time onto a new reverse mortgage if the conditions are better or to a conventional mortgage if the reverse was not right for you.  If you currently have a reverse mortgage and are wondering about your refinance options, check out this reverse mortgage calculator to see your options.

Monday, August 20, 2012

Can I Get A Reverse Mortgage If My Home Is In a Trust?

Many forward thinking seniors have created an estate plan for legal and tax purposes.  While this can be a great thing, it can make it harder to get a reverse mortgage or other type of home loan.  One question I get often is can a person get a reverse mortgage on their home if that home in owned by a Trust?  The answer is simple; it depends.  First lets talk about the different kinds of Trusts.

Revocable vs. Irrevocable

When planning your estate, there are two different kinds of Trusts, revocable and irrevocable.  The revocable or "Living Trust" is simply a Trust that can be changed or modified at any time.  These are the most common types of Trusts because who wants to be locked into something permanent if they don't have to?

The Irrevocable Trust is the opposite, once the agreement has been signed, it cannot be changed in any way.  These types of Trusts are not too common while the Trustmaker is alive.  Most revocable Trusts will be changed to irrevocable once the Trustmaker dies.

There are many benefits for having a Trust such as estate tax reduction, asset protection, and charitable estate planning.  If you are looking for ways to protect your estate for your spouse or children, a Trust is a great way to go.

Reverse Mortgages and Trusts

So, can you get a reverse mortgage while your home is being protected in a Trust?  Like I said before, it depends on what type of Trust you have and also the wording of the Trust.  Most revocable Trusts are set up to allow different types of financing on your home, and if they are not, they can be changed to allow a reverse mortgage.  You can also quit claim out of a revocable Trust which is the easiest way to get a reverse mortgage if you have a Trust.

An irrevocable Trust on the other hand is not so easy.  Unless the Trust specifically provides an exception for refinancing the home, then you are out of luck.

Bottom line is having a Trust along with a reverse mortgage can be a great way to plan your estate.  If you have a Trust and are looking into a reverse mortgage; before you apply, check to see what type of Trust you have and how it is worded.  If you are thinking about having a Trust created, you may want to look into the reverse mortgage first and then the Trust because it will speed up the reverse mortgage process and paperwork.

If you have additional questions, visit our reverse mortgage website or call 800-431-9250.

Tuesday, August 14, 2012

Reverse Mortgage Scams!

Last month the National Counsel On Aging released their list of 8 reverse mortgage myths.  I have expanded on a few of them in some past posts and want to take the opportunity to talk about the final myth mentioned in the article.  Myth #8 is entitled, "Most reverse mortgage borrowers who end up facing foreclosure were scammed."

It is sad that there are people in our world who look to take advantage of others, especially our seniors!  It is also sad that this happens in the reverse mortgage industry, but that's why the 3rd party counseling is so important!  This counseling is unique to the reverse mortgage; it's also mandatory and should cut down on the amount of misrepresentations made by unscrupulous loan officers.  If you are looking to do a reverse mortgage, you should not just go to the top person on the list that your loan officer gives you.  Ask around to others you know who have done a reverse mortgage and find out who they used.  If you don't know anyone, call everyone on the list your loan officer gives you and choose the one you feel most comfortable with, whether it be by phone or in person.  If you do this, it is pretty hard to be scammed by your lender because a good counselor will catch things that are not right.

The only way you can be foreclosed on in a reverse mortgage is if you fail to pay your property taxes and insurance, and if you let your property fall into disrepair.  As long as you don't do those 3 things, it doesn't matter what else happens to your financial situation, you cannot be foreclosed on!  Most reverse mortgage foreclosures tied to a scam happen when the borrower takes out a lump sum and then invests that money into something they don't know much about or have control over and the money gets lost.  If your loan officer tries to sell you or push you into some financial product with your reverse mortgage proceeds, you need to run like Hell!  This unfortunately is where most of the scams tied to reverse mortgages happen.  It is not the loan itself that is causing the problems, it is what you do with the money.
If you want to invest the money you get from the reverse mortgage, that in a lot of cases is a very wise choice...and even if your loan officer recommends a financial advisor they know that doesn't mean its a scam.  What it does mean is you need to do your homework.  Talk to other financial planners about what you should do with your money, get second and even third opinions.  You may even decide to use the adviser your loan officer told you about, that is fine after you have done your own research!  It is also usually not advisable to get a reverse mortgage and use the money to invest with a family member.  This unfortunately is the cause of much fraud involving revere mortgages.  Remember in most cases you are dealing with your larges asset, don't take that lightly!

Here are a few things to remember when doing a reverse mortgage to make sure everything is on the up-and-up!
  • Take the reverse mortgage counseling seriously.  Make sure the counselor has a copy of the proposal documents your lender gave you.
  • If you are investing the money you received from your reverse mortgage, do your homework.  Use a trusted financial advisor you have used before.  If you lender recommends one, get another opinion.  It's also a good idea to not invest everything.
  • If your loan officer says they are licensed to sell financial products and you should use them to invest your money, call your State Division of Real Estate, this in most cases is against the law to be involved in both transactions at once.
  • Be cautious using they money to invest with a family member.
  • In all cases if you feel like you are being targeted by a scammer, call 1-800-347-3735 to file a complaint with HUD.

Monday, August 13, 2012

Big Reverse Mortgage News!

I want to let you know if you haven't already heard...Reverse Mortgage USA's Utah branch does not charge origination or servicing fees!  If you are considering a reverse mortgage now is a great time to take advantage of record low rates and fees!  Call 800-431-9250 or visit our website to learn more.

This week, look farward to learning about reverse mortgage scams and we answer a pretty popular question..."can I get a reverse mortgage if my house is in a Trust?"

Thursday, August 9, 2012

Is a Fixed Rate The Best?

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The 6th myth spoken about in the National Council on Aging’s 8 reverse mortgage myths article talks about a fixed rate vs. an adjustable rate reverse mortgage. Now I bet if you surveyed 1000 seniors about whether a fixed rate or adjustable rate is better, you would have an overwhelming response that fixed is best. This is just my opinion, but how could someone who probably owned a home back in the late 1970's through the late 80's say anything different—especially if you just happened to be one of the lucky ones who purchased a home in October of 1981 and had a wonderful mortgage interest rate of 18.45%. In many seniors minds, sure an adjustable rate may be at 3% now, but in a year or two it will be back in the teens and then they will be stuck...this is not the case now with rate caps, but that is what is thought so why chance it, just get a fixed rate!

This line of thinking makes sense to most people, but depending on your situation, this may not make the most sense with a reverse mortgage. The fixed rate reverse mortgage has lots of benefits. Most cases it gets you the most money, the rate is fixed, and it is by far the most popular, so it usually is faster to underwrite and close on the loan. The main drawback with the fixed rate reverse mortgage is that you are required to take a lump sum of all the money you qualify for; you don't get a choice, you have to take the money. Depending on your situation this may be perfect for you, but if you don't need all that money looking into an adjustable rate reverse mortgage might be the way to go.

With the adjustable rate option, you can choose to take the money as a lump sum, a line of credit, or a monthly payment. This may be the best choice if you do not need much money right now and don't trust yourself with it once you have it. I'm in that situation...if I have cash in my wallet it tends to disappear. I can't ever seem to account for where it goes, it just jumps out of my wallet and walks away. If you are like me with cash, and now you don't have a mortgage payment plus you have a large sum of money burning a hole in your pocket, this could be a recipe for disaster. Being set up on a monthly payment option or even a line of credit where you only pay interest on the money you use could save you pain in the long run.

Reverse Mortgages can be a great loan for many Utah seniors, but contrary to popular belief, the fixed rate option may not be the best for everyone! To see how much you qualify for on both the fixed and adjustable rate, check out our reversemortgage calculator or call 1-800-431-9250 to get prequalified over the phone.

Wednesday, August 8, 2012

Reverse Mortgage Myths

Last month the National Council on Aging released their top 8 myths about reverse mortgages.  Many of the myths are easy to guess, but there are a few of them that I want to spend a couple blog posts discussing.  The first one is myth #4, "Reverse mortgages should only be used as a last resort".

One of the things I hear people say who I know could really use the reverse mortgage but just can't get off the fence is "We're not to that point yet".  What I always ask is, "what point do you mean".  It seems that many people think the reverse mortgage is only something for the destitute, or those without another choice available to fix some sort of personal financial meltdown.  This however is not the case!  I have done many reverse mortgage loans for people with paid off homes and large monthly incomes who just want to be in control of their biggest asset, not the market!  Besides, to quote the NCOA article; "If you wait until you are in a financial crisis, a little extra income each month probably won’t help. Reverse mortgages are best used as part of  a sound financial plan, not as a crisis management tool."

So take a good look at your situation.  Are you on a fixed income?  Do you or your family have a history of health problems?  Do you have an adjustable rate mortgage?  You may be okay now, but what about when the price of gas goes up another fifty cents or even a dollar a gallon?  What will you do if the interest rate on your mortgage goes up 1/2 a point and your monthly payment increases by $100?  Now is the time to prepare for any what-if's that may be coming in the future.

Along with a reverse mortgage there are many other programs and benefits that you can qualify for to help with day to day needs.  This can be help with anything from property taxes, food and medications, to home energy.  You can visit http://www.benefitscheckup.org/ to find out more.

Tomorrows blog post will discuss another myth mentioned in the NCOA's article.  Stay tunes to see if the fixed rate reverse mortgage is always the best way to go...

Saturday, August 4, 2012

Saturday Solicitation 😄

The phone number to call if you have any reverse mortgage questions is 1-800-431-9250. We are happy to help you get educated so you can decide for yourself if a reverse mortgage is right for you!

Of course if you don't feel like calling you can visit our website at www.reverseutah.com!

Friday, August 3, 2012

Three More Reasons Reverse Mortgage Popularity Will Increase

Reverse Mortgage-Equity to Cash

The 231-page reverse mortgage report by the Consumer Financial Protection Bureau (CFPB) brought up some interesting information about the number of seniors who actually have a reverse mortgage and why they may be joined by many more soon.

According to the CFPB's report, the reverse mortgage, more formally known as the Home Equity Conversion Mortgage (HECM), has yet to reach the vast market of eligible senior homeowners. In 2010, only around 3 percent of the 24 million qualified senior homeowners took advantage of the loan program averaging about 70 thousand newly originated reverse mortgages a year. This was down more than 30 thousand from 2009!

Some developments are, however, expected to change the trend.

Firstly, reverse mortgage-qualified baby boomers are growing in numbers. From the estimated 24 million in 2010, it is up to 32 million in 2012. That's a 33 percent increase or additional 8 million qualified senior homeowners in two years.

Secondly, the report released by the Office of the Chief Actuary in May regarding the possibility that the Social Security Administration may not be able to live up to its promised benefits brought some chilling effect. Seniors, financial planners and even organizations into retirement research started looking for ways to prepare for the coming of this anxiety-causing event.

The third development is tied with the second one. After Social Security, home equity is the largest asset of a typical senior in the country. With the hope of addressing the Social Security's pending deficit, a growing number of financial and retirement planners started looking at the reverse mortgage closely and acknowledged its potential to boost retirement preparedness.

With the economy not looking like it will improve anytime soon, now may be the best time to look into a reverse mortgage to help protect your future.  For more information on the reverse mortgage and to see if you qualify, visit our main reverse mortgage website

Portions on this post were cited from the article "A Personal Take on the CFPB's Reverse Mortgage Report"