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Beth’s Reverse Mortgage Blog has moved

May 22, 2014

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Along with the update our website, www.RMSIDAC.com, I have moved my blog to a new site:  http://rmsidac.com/beths-reverse-mortgage-blog/.  Please visit the new site for future posts and explore our website for facts and information about Reverse Mortgages in Minnesota.  Make sure you subscribe so you receive email notices when a new post has been added.

Thanks for visiting!  Hope to see you on the new site!

BLOG POST’S INFORMATION IS CURRENT AS OF THE DATE POST PUBLISHED, PROGRAM HAS CHANGED OVER THE YEARS AND IS SUBJECT TO CHANGE IN THE FUTURE.   Contact us for current information, 651-762-9648.

This site or information provided is not from, or approved by, HUD or FHA or any US Government Agency or Department.

Photos used are stock photos, not actual borrowers.

Borrowers’ situations and quotes used are real; borrowers’ names changed to protect their identity.

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Memories Created for Reverse Mortgage Heirs

April 18, 2014

Reverse Mortgage Created Memories for Bob and His FamilyOn a Friday I received a call from the niece of one of my Minnesota reverse mortgage clients telling me that Bob had passed away.  After extending my sympathies I answered her questions and helped her understand the process now that the loan is due.   As I talked with Bob’s niece she shared how loving Bob was and how the FHA  Home Equity Conversion Mortgage (HECM) reverse mortgage not only benefited him but also allowed for him to create numerous memories for the family.

During our conversation I shared some memories of my meetings and conversations with Bob and his perspective on how the reverse mortgage had made a difference in his life.  Bob had called me after his trip to Yellowstone with a nephew telling me what a wonderful time he had had and how happy he was to be able to take the trip.  During another conversation he had said he had remodeled his home to be adapted to be wheelchair accessible.  He had also shared how much the reverse mortgage had given him his independence and the ability to remain in his home where he wanted to be with his dog.  I originally shared Bob’s stories in my blog “Reverse Mortgage Helps Minnesota Senior To Be Prepared for Future.”

Apparently Bob’s wife who had proceeded him in death limited Bob from fulfilling his dreams.  It appeared it had to do with not having much money but also her attitude.  With the reverse mortgage he had money like he never had before.  He would tell his niece, “I don’t know how it is that I have money now when I never did before.”  She said he became energetic and interested in life.

The family’s perspective of the  trip to Yellowstone was that it had not only been a wonderful experience for Bob, his young traveling partner had an experience of a lifetime with his uncle and has memories of the trip to treasure.  I was told the expressions on their faces upon their return were smug and they were keeping secrets that will likely never be shared like “little boys” do.

Bob bought gifts for family members like a vacuum cleaner for someone who needed it but didn’t have the funds to purchase it on their own.  What a good feeling it must have been for Bob to be able to help his family.

Reverse Mortgage created memories for familyHe bought tickets to take family members to movies and plays.  I was told that one of those experiences was taking his niece’s family to the play “Sleeping Beauty.”  As they were sitting in their seats the niece looked over and saw the pleasure in Bob’s face as he was watching the expressions on the faces of his family.  What a memory to treasure!  This was only one of several of these types of adventures and memories for Bob and his family.  The pleasure for the family was the kids got to know an uncle and share time with him as they had not been able to previously.

Having less funds available when the loan is due and payable or less of an inheritance is a negative of the reverse mortgage.  But using the funds and creating the memories by spending time together or giving the gifts and seeing the difference it makes while one is still alive can be a treasure which can never be replaced.

As his niece shared the stories I got tears in my eyes. The reverse mortgage had not only changed Bob’s life but the lives of an entire family.  Just before we were hanging up, Bob’s niece said, “Thanks for loving my uncle too.”

Providing security, independence, dignity and control for our seniors is why I believe in reverse mortgages and am in this industry.  It’s a blessing for me to be able to help seniors and their families.  And I do love my clients and hearing their stories.

For the details and facts on reverse mortgages visit our website, www.RMSIDAC.com.

First posted in 2011, re-posting 2014
© 2011-2014 Beth Paterson https://bethsreversemortgageblog.wordpress.com 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/pxPEm-I4

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Can’t Afford To Retire? Maybe There’s An Answer!

April 11, 2014

A Reverse Mortgage may be your solution to affording to retire. Read how it made allowed these people to retire.

Beth's Reverse Mortgage Blog

Able to retire with a reverse mortgage With mortgage payments due, retirement funds decreased or decreasing it is harder for seniors to retire.  However, there may be the option to retirement.

Working a 40 hour week at a very physically demanding job, Len continued to work in order to cover their mortgage payments.  After hearing about a reverse mortgage, they contacted me, got educated with the facts and decided to proceed.  Once their reverse mortgage was closed and their conventional mortgage paid off, eliminating mortgage payments Len was able to retire.  With no mortgage payments, he and his wife, Maricarol are now enjoying their retirement, living in their Minnesota retirement home close to their children giving them the opportunity to spend more time with their children and grandchildren.  They said, “Without the reverse mortgage Len would not have been able to retire.”

Trying to make ends meet and make his mortgage payments, Jack is still working.  Having…

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Reverse Mortgage Borrowers Remain in Control

April 9, 2014

 

Reverse Mortgage borrowers remain in control of their homeWhen sitting down with a new prospect the other day I asked what they had heard or thought about reverse mortgages.  Bob responded that reverse mortgage borrowers lost control of their home and their money.  Have you heard this too?  I want to correct this misconception for you.

Reverse mortgage borrowers remain in control of their home.  They own the home, title remains in their name, just like with any mortgage.

They have the option to paint the home the color of their choice, plant trees or landscape as they choose, and to decorate the inside as they desire (or not make changes).

I had one borrower ask if they could paint their house purple.  With a chuckle I responded  they could although the neighbors may not like the color purple.  The point is, as the homeowner they have the option to choose what color they want to paint their house.

Borrowers are, however, responsible for maintaining the home.  This is to the homeowners best interest anyway, and whether they have a reverse mortgage, a conventional mortgage or no mortgage at all.  Maintaining means things like no bare wood or chipped paint, roof replaced when needed, foundation and structure is sound, electrical and plumbing in working order.

In their will or trust the reverse mortgage borrowers still choose who will inherit the home or equity of the home.

While the reverse mortgage borrowers will be using the proceeds for their needs or wants during the term of the loan, when the home is no longer their primary residence, the loan is due and payable.  The loan is generally paid back from the sale of the home with no personal liability to the borrower or their heirs.  If the home is sold for more than the loan balance the borrower or the heirs receive the difference.

If an heir wants to keep the home, they have this option – they would just need to pay off the reverse mortgage balance.  This can be done through a conventional mortgage, their own funds or if they were the beneficiary on an insurance policy.

Note that if the loan balance is higher than the fair market value, the borrower or their heirs only need to pay 95% of the fair market value of the home, they do not need to come up with the difference.  With the FHA HUD insured Home Equity Conversion Mortgage (HECM) the FHA Mortgage Insurance will cover the difference for the lenders.

They have the option to sell when they want and choose the real estate agent.  If they have passed away then their estate chooses the real estate agent.

The way one wants to receive their reverse mortgage proceeds is also their choice.  They can receive the funds in a line of credit, monthly payments, lump sum or a combination of these.

And how they use these funds is in their control – lenders cannot dictate how one spends the proceeds from their reverse mortgage.  Borrowers can and have used their reverse mortgage funds to pay for home repairs, purchasing a new car, traveling, home care or whatever one needs or wants… it’s their choice.

Reverse Mortgage borrowers remain in control of their homeThe reverse mortgage provides control for borrowers to have funds so they can make their own choices.  For example, where they want to live (in their own home vs government subsidized housing), who they want to care for them (vs the government deciding which home care agency they can use).

Reverse mortgage borrowers do remain responsible for paying their property taxes, having home owners insurance, maintaining the property and paying home owner association dues if applicable, just as they do with or without a conventional mortgage.

Losing control of your home or money with a reverse mortgage is a misconception.  In reality reverse mortgage borrowers have control and in some cases even more control than without doing a reverse mortgage; having funds available gives them more choices and options.

Originally Posted in 2011; Re-posted in 2014
© 2011-2014 Beth Paterson https://bethsreversemortgageblog.wordpress.com 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/pxPEm-HI

Related articles:

Be Cautious on Reverse Mortgages… And From Whom You Are Getting Your Reverse Mortgage Information

April 4, 2014

In light of recent misleading information in the media, I am re-posting this article.

Beth's Reverse Mortgage Blog

Proceed with Caution on A Reverse Mortgage & From who You Receive the Information Cautious is defined as showing or using caution; a warning or having alertness or taking care in a situation.  Therefore I feel you should be cautious of the food you are putting in your mouth, the medications you are taking, the safety of the products you purchase, the credit card you are applying for, how you are spending your money, answering the door when you weren’t expecting anyone, purchasing services from the person going door-to-door, the car you are purchasing, the home you are buying. Should you be cautious of reverse mortgages?  Of course you should be cautious of reverse mortgages.  But you also need to be cautious of who you are getting your reverse mortgage information.

State Attorney Generals, politicians and other government agencies are issuing cautions on reverse mortgages.  Some of their advice is good, unfortunately, with many of these “warnings” the information is not accurate.  Their…

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A Reverse Mortgage Or A Conventional Mortgage For Senior Homeowners? That Is The Question.

April 2, 2014

Are you debating whether to do a conventional mortgage or a reverse mortgage? Read this article before making your final decision.

Beth's Reverse Mortgage Blog

Calling for MN Reverse Mortgage The call comes in:  “I took a loan out 3 years ago and now I want a reverse mortgage because I can’t make the payments.”  I respond, “Great, the reverse mortgage eliminates mortgage payments and allows borrowers to stay in their home.”   I define that a reverse mortgage is a mortgage like any other loan but with special terms for seniors 62 and older and borrowers still have the title and are responsible for property taxes and insurance, association dues (if applicable), maintaining the property and abiding by the terms of the loan.  Then I also review some other details of the reverse mortgage including that:
  • There are no income or credit score requirements to qualify for the interest rate.
  • No monthly mortgage payments required.
  • There is no limitation on how the funds can be used.
  • Funds can be received in monthly payments structured as needed, line of credit (with…

View original post 1,503 more words

At The Eleventh Hour… Reverse Mortgage Used To Save MN Senior’s Home

April 1, 2014

The Reverse Mortgage can still help save homes from foreclosure.

Beth's Reverse Mortgage Blog

We need a reverse mortgage The call came it at 5:00 p.m. on a Wednesday afternoon, “We’re in foreclosure, the redemption period ends in three weeks.  We need a reverse mortgage.”  Ken and Mary, in their 60’s, were in a tight spot and about to lose their home if we couldn’t get the reverse mortgage application taken, processed, closed and funded within the three weeks to the date of the late afternoon phone call.  There were no exceptions to getting an extension of the redemption period.

Being from a smaller town, they hadn’t heard about reverse mortgages previously until they were visiting relatives in another state and heard them advertised.  When back in Minnesota they looked up reverse mortgages and found their way to us.  After an initial two-hour conversation explaining the details and terms of  the HUD insured Home Equity Conversion Mortgage (or HECM) they decided to proceed knowing their only option to save…

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Reverse Mortgages Provide Security, Independence, Dignity And Control

March 28, 2014
Reverse Mortgage Help Their Lifestyle

A Reverse Mortgage Helps Their Lifestyle

When Andrew and Harriet, both in their 70’s, went to their bank to inquire about refinancing their current loan, their banker suggested a reverse mortgage and referred them to us at Reverse Mortgages SIDAC.  They needed some additional funds for home repairs including a new energy efficient furnace.  Anticipating future medical expenses, they liked the idea that with the reverse mortgage they could get money for their immediate needs, eliminate their mortgage payment, and still have funds for their future needs by having a line of credit.

They decided to do a reverse mortgage with the understanding that they would still own their home (as they do with their current mortgage), payments aren’t required, and generally the interest rate is lower than they could qualify for on a regular loan.  They understand they continue to be responsible for their taxes, homeowners insurance, and maintenance of the property and don’t have to repay the loan until the home is no longer their primary residence.  They liked the idea that even if one of them goes into the nursing home, the other one can stay in the home.  Additionally, it was appealing that the funds are tax-free*, Social Security and Medicare are not affected and Medical Assistance and other public benefits can still be received.

A mortgage with special terms for homeowners 62 and older, a reverse mortgage has no income or credit score qualifications and a low interest rate (averaged around 6% over the last 15 years), which offers many advantages for senior homeowners.  Allowing access to cash from the equity of the home to use now and pay back when the home is no longer the primary residence of borrower(s), when the home is sold any remaining equity goes to the borrower or their heirs.  With the reverse mortgage, if the loan balance is higher than the home can be sold for there is no personal liability to borrowers or their heirs.

“When a friend told me she was doing a reverse mortgage I thought, that sounds really good.  I thought, if I do a reverse mortgage, I could do some things to my home, and maybe take a vacation.  After everything was explained to me and my children in detail and in words I could understand I did a reverse mortgage.  I now am getting new windows and siding and am going on vacation with my daughter,” said Judy in St. Paul.

Happy to Repay Son-In-Law from Reverse Mortgage

Happy to Repay Son-In-Law from Reverse Mortgage

A few years ago Patricia had borrowed money from her son-in-law, Brad, to pay off a loan.  Then Brad needed the money back for his own purposes.  After consulting her family and an attorney, she did the reverse mortgage.  She told us she was greatly relieved and the pressure was off her now that she no longer owed Brad money and wasn’t dependent on him.  She added as a result of consulting the attorney, “Other good benefits are that I tended to my will being made, my health directives done, and a trust fund set up.  All that is done now and I’m prepared for the future.”

The factors used to determine how much is loaned to borrowers include the home value or FHA lending limit ($625,500 through the end of 2014), the age of the borrower (the older one is the more funds they can receive), and an Expected Interest Rate.  If one doesn’t have a mortgage on their home they benefit from having more funds available to them. Cash flow will improve when the current mortgage payment is eliminated if one does have a current mortgage on their home.

No matter what the home values may be and no matter if one is only 62, it is still a good time to do a reverse mortgage because the interest rates are so low and one can benefit from the Line of Credit growth rate.  When one waits for the home values to be higher or one waits until they are older, there may be more reverse mortgage funds available.  However, if one waits to do the reverse mortgage, the interest may be higher and consequently less funds available.

As with a conventional loan, there are traditional closing costs including an origination fee, appraisal, title fees, title insurance and recording fees.  With the FHA insured, Home Equity Conversion Mortgage (HECM) borrowers pay a mortgage insurance premium.  The fees are often perceived as high but they actually compare to a conventional mortgage with the difference being the FHA Mortgage Insurance Premium.  However, in the big picture the reverse mortgage costs less because of the much lower interest rates.  The only out of pocket expense is the cost of the appraisal.

“It was a blessing when we heard of reverse mortgages.  We were behind in the property taxes and mortgage payments and faced foreclosure.  We were really in a mess.  The reverse mortgage cleared it all up and has lifted a weight from us that we can live in the house and not worry,” said Gwen and Robert.

A reverse mortgage has allowed thousands of Minnesota seniors to remain in their home with security, independence, dignity and control even during trying times.  And if you know a senior who wants to sit back and relax with security, independence, dignity, and control, a reverse mortgage may be their answer.

*consult tax advisor who is familiar with reverse mortgages

Originally posted in 2009, updated in 2014
© 2009-2014 Beth Paterson https://bethsreversemortgageblog.wordpress.com 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/xPEm

Related articles:

What To Consider When Choosing Your Reverse Mortgage Originator

March 25, 2014

When you have decided to explore or to proceed with a #ReverseMortgage you want to make sure you are working with an #originator you are comfortable and has the knowledge and experience to guide you through the process. There is a difference in originators with their expertise, knowledge and experience with reverse mortgages along with the customer service they provide. To help ensure that you are working with an originator who is experienced, knowledgeable and meets the industry’s standards, consider the following when choosing your reverse mortgage originator. http://wp.me/pxPEm-AJ

Beth's Reverse Mortgage Blog

Reverse Mortgage Originator Explaining Documents to a MN Borrower When you have decided to explore or to proceed with a reverse mortgage you want to make sure you are working with an originator you are comfortable and has the knowledge and experience to guide you through the process.  Originating the reverse mortgage takes patience, kindness, a “social worker” attitude and a teacher aptitude versus a sales approach.  There is a difference in originators with their expertise, knowledge and experience with reverse mortgages along with the customer service they provide.

To help ensure that you are working with an originator (also referred to as Loan Officer/Reverse Mortgage Specialist, Reverse Mortgage Advisor or Reverse Mortgage Consultant) who is experienced, knowledgeable and meets the industry’s standards, consider the following when choosing your reverse mortgage originator.  Yes, the list is long but knowing the answers to this list of questions will help support and protect you.

  • How much experience does the Reverse Mortgage…

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A Reverse Mortgage Should Be A Last Resort… To What?

March 24, 2014

While the financial planning industry has changed their attitude about considering a reverse mortgage as a last resort, many still think it is… but a last resort to what?

Beth's Reverse Mortgage Blog

A Reverse Mortgage Should Not Be A Last Resort So called senior advocates often state a reverse mortgage should be a last resort.  My question is to what?

A Home Equity Loan?  To qualify for a home equity loan or a traditional loan a lender looks at a borrowers’ credit, income, assets, and ability to make payments.  Most seniors don’t qualify for a home equity loan.

Even if a senior does qualify now, if “life happens” and they have to juggle making a mortgage payment or having funds for other expenses, their stress level increases.  And if they don’t make their mortgage payments they could be facing foreclosure.

I receive calls on a regular basis from seniors who did a home equity loan or traditional loan just a few years ago and now they can’t afford the payments.  When I run the calculations more times than not I find there are not enough proceeds from the reverse mortgage…

View original post 829 more words