I ran across another great article from the National Care Planning Council, of which I am a member. As our population ages, more and more seniors will require assistance in the home, and modifications of their homes. This provides challenges for the kids, and opportunities for senior service providers. The article below gives some great advice.
In addition, accessing the equity of their home with a Reverse Mortgage can help the seniors stay in their home longer by providing the funds to pay for senior friendly remodels, or for in-home care.
To learn more about an Oregon Reverse Mortgage, click here: Reverse Mortgage Facts.
Keeping Mom and Dad Safe at Home
Generally, elderly parents want to remain living in their own home. However, remaining in the home becomes a concern when children see their parents slowing down, perhaps even having trouble with handling stairs and doing general daily activities. Yet, with parents’ mental and physical health currently not creating problems, there seems to be no imminent need to search out support services or other accommodations for aging parents.
This is now the time to evaluate the home to make it safe and secure for your loved ones — now and in the near future — in anticipation of aging disabilities that may occur. Help and support are available. The nation as a whole is more aware of elderly needs and services and products are becoming available at an outstanding pace.
The Bureau of Labor Statistics states,
“Employment of personal and home care aides is projected to grow by 51 percent between 2006 and 2016, which is much faster than the average for all occupations. The expected growth is due, in large part, to the projected rise in the number of elderly people, an age group that often has mounting health problems and that needs some assistance with daily activities.” Bureau of labor Statistics-Occupational Outlook Handbook, 2008-09 Edition
This growing need for aides and services also encompasses
Where do you begin to make sure your elderly family member is safe and managing well in his or her home?
Visit often and at different times of the day and night. Make note of daily activities that appear challenging and where changes might be made to add safety and convenience. Remove rugs that slide — causing a fall — and move furniture with sharp edges. Set the water heater at a lower temperature. This will protect their older sensitive skin from scalds and burns. Be sure smoke detectors and carbon monoxide detectors are in place.
Bathrooms are a hazard area for the elderly. Grab bars by the toilet and shower are a must to help prevent falls. There are easy to install bars at your local hardware store if you want to do the work yourself. Another item that is good to have is a shower stool or chair.
If you are not sure of what needs to be done, consider hiring a professional. There are companies that specialize in home remodeling and accommodation for seniors. Michelle Graham of Accessible Design by Studio G4 says about senior home remodel projects,
“The main thing we incorporate in all of our projects is a careful study of needs and potential needs that may develop throughout a client’s lifespan.”
Keep in mind what future home adjustments might be needed for your parents to “age in place” in their home.
Home safety or medical alert companies provide GPS-based bracelets or pendants to track the elderly at home who tend to wander. Or the companies may provide alarm devices such as pendants or bracelets which allow the elderly to alert someone if there has been a fall or a sudden health-related attack. In the event an alarm has been triggered, a 24 hour monitoring service will alert the family or medical emergency services or call a neighbor depending on previous instructions. In addition there are companies that will install motion sensors in the home to monitor the elderly on a 24 hour basis.
Don’t forget your parents’ community as a valuable resource for helping them stay in their home. Take Margaret Muller as an example. At 82 years of age, Margaret lives alone in her small home. She manages very well with the help of her local Senior Center. The Center’s “Senior Companion” program sees that Margaret is taken to the store for groceries and other needs and checks in with her often to see how she is doing. Once a day, the Senior Center delivers a hot healthy meal to her door. Having these services and visits gives Margaret the help she needs and peace of mind that she is not alone.
Neighbors, local church groups, senior centers and city centers are some places to look for assistance. Most of the time there is little or no cost for these services.
Your state aging services unit is a valuable community resource. The National Area on Aging website www.aoa.gov states:
“AoA, through the Older Americans Act and other legislation, supports programs that help older adults maintain their independence and dignity in their homes and communities. In addition AoA provides funding for a range of supports to family caregivers.” Some of the programs the site lists are: “Supportive Services and Senior Centers Nutrition Services National Family Caregiver Support Program Grants for Native Americans Nursing Home Diversion Grants Aging & Disability Resource Centers Evidence-Based Disease Prevention Long-Term Care Planning Alzheimer’s Disease Grants Naturally Occurring Retirement Communities”
“AoA, through the Older Americans Act and other legislation, supports programs that help older adults maintain their independence and dignity in their homes and communities. In addition AoA provides funding for a range of supports to family caregivers.”
Some of the programs the site lists are:
“Supportive Services and Senior Centers
Nutrition Services
National Family Caregiver Support Program
Grants for Native Americans
Nursing Home Diversion Grants
Aging & Disability Resource Centers
Evidence-Based Disease Prevention
Long-Term Care Planning
Alzheimer’s Disease Grants
Naturally Occurring Retirement Communities”
A few thoughts on hiring home care aides or live-in care givers.
The classifieds are filled with people looking for work as aides to the elderly. Many of these aides are well-qualified, honest people who will do a good job; but, of course, there will be some not so reputable. If you are looking to hire someone, be sure you interview and check references and qualifications. You will be responsible for scheduling that person and doing payroll and taxes as well. Be very sure you hire someone trustworthy, as the elderly seem to trust these helpers more than they should and therefore can easily be taken advantage of.
A professional home care service will eliminate your employment concerns. Professionally-provided aides are usually bonded and service is guaranteed. Home care companies take care of the scheduling and payment of their employees. Home care companies cater to the elderly in their homes by offering a variety of services. The National Care Planning Council lists many of these companies throughout the country on its website www.longtermcarelink.net .
These providers represent a rapidly growing trend to allow people needing help with long term care to remain in their home or in the community instead of going to a care facility. The services offered may include:
Thomas Day, Director of the National Care Planning Council states,
“Care in the home provided by a spouse or a child is the most common form of long-term care in this country. About 73% of all long term care is provided in the home environment typically by family caregivers.”
As their caregiver, you can make the difference in the quality of life for your aging parents and if staying in their home is a possibility, you have the resources to make it happen.
A Reverse Mortgage can be helpful to help pay for these expenses if there are not other funds available. Feel free to contact me if you have any questions regarding whether or not a Reverse Mortgage is right for your situation.
Larry Morris, CMPS www.PDX-Mortgage.com www.OregonReverseMortgageNews.com larry@PDX-Mortgage.com 503-431-0096
I found this information and thought it would be extremely helpful to share with anyone considering a reverse mortgage, or anyone helping an aging loved one with this decision. At the end of this post I have a link to a FREE video that explains the basics of Reverse Mortgages. Check it out!
AARP answers your questions:
The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the federal government. HECM loans are insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). The FHA tells HECM lenders how much they can lend you, based on your age and your home’s value. The HECM program limits your loan costs, and the FHA guarantees that lenders will meet their obligations. HECMs Versus Other Reverses HECM loans generally provide the largest loan advances of any reverse mortgage. HECMs also give you the most choices in how the loan is paid to you, and you can use the money for any purpose. Although they can be costly, HECMs are generally less expensive than privately-insured reverse mortgages. Other reverse mortgages may have smaller fees, but they generally have higher interest rates. On the whole, HECMs are likely to cost less in most cases. A notable exception may be the reverse mortgages now being developed by some credit unions.
The only reverse mortgages that always cost the least are ones offered by state or local governments. These loans typically must be used for one specific purpose only, for example, to repair your home, or pay your property taxes. They also generally are available only to homeowners with low to moderate incomes. Who is Eligible
HECM loans are available in all 50 states, the District of Columbia, and Puerto Rico. To be eligible for a HECM loan:
• you, and any other current owners of your home, must be aged 62 or over, and live in your home as a principal residence; • your home must be a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Some manufactured homes are eligible, but most mobile homes are not; cooperatives are expected to become eligible by the end of 2008. • your home must meet HUD’s minimum property standards, but you can use the HECM to pay for repairs that may be required; and • you must discuss the program with a counselor from a HUD-approved counseling agency. Repaying a HECM
As with most reverse mortgages, you must repay a HECM loan in full when the last surviving borrower dies or sells the home. It also may become due if: • you allow the property to deteriorate, except for reasonable wear and tear, and you fail to correct the problem; or • all borrowers permanently move to a new principal residence; or • the last surviving borrower fails to live in the home for 12 months in a row because of physical or mental illness; or • you fail to pay property taxes or hazard insurance, or violate any other borrower obligation. Debt Limit
If your rising HECM loan balance ever grows to equal the value of your home, then your total debt is limited by the value of your home if the home is sold to repay the loan. But if the home is not sold and the loan is repaid with other funds, then you or your estate would owe the full loan balance–even if it is greater than your home’s value. Your heirs would not have any personal liability for repaying the loan.
Click HERE to gain access to the FREE Video on Reverse Mortgages- be sure to watch!
Larry Morris CMPS American Nationwide Mortgage Company, Inc. 307 E 2nd St. #230 Newberg, OR 97132 OR License ML-3259 WA License WA-510-LO-51175
Toll Free - 1-888-660-2842 Cell - 503-421-0096 Fax - 1-888-649-6625
www.PDX-Mortgage.com www.OregonReverseMortgageNews.com
I recently posted on my other blog about our recent company and location change. Rather then repeat it all here, I’ll show a few pictures and give a link to the page.
We are still the same group of people, providing the same committtment to serviing our clients as always, we are just in a better location with a company that we feel will help us through these chaotic times.
If you are in Newberg, feel free to drop in and visit. I’ll even buy you a cup of coffee.
Larry Morris
Link to the Blog
Link to the Reverse Mortgage Center on my new website
In a recent article on caregiver burnout (shown below), many seniors are finding it hard to keep up with the stress associated with care for their loved ones. In some cases, a Reverse Mortgage can provide the funds to allow a loved one to stay in their home and either hire professional help to come in and provide care, provide funds for Adult Day Care, or provide the funds to allow the loved one to go into a professional treatment facility while the other remains in their home.
All too often it is felt that the only option is to sell the home to provide for the funds for treatment, or that assets need to be liquidated in order to qualify for a medicaid facility. If there is adequate equity in the home, a properly structured Reverse Mortgage can provide the funds to solve this dilema.
Contact me if you would like to discuss this. 503-421-0096
Caregiver Burnout - Adult Day Care Services to the Rescue
If you are a primary caregiver for a loved one, you are well aware of the daily stress and emotional and physical impact it can have on your health.
Susan learned this first hand when she and her husband, Tom, brought his Mom home to live with them. Mom suffered from dementia and had to be watched constantly. Susan found that when you become a caregiver, you start by giving up a few things you usually do for yourself to make up for the time needed for caregiving. Even though your service is one of love and you are willing to do the sacrifice on behalf of your loved one, you find yourself giving up a lot more as time goes on.
“As a caregiver,” Susan laments, “You are often frustrated that you can’t do enough for your loved one and so guilt and feelings of inadequacy set in. Couple that with feelings of being unduly burdened, of resentment, of stress and then of more guilt at having those feelings.”
She continues, “Now don’t get me wrong, I am very glad that I spent those years in caregiving. There were many cherished moments with Mom that only I experienced.”
In order to enjoy those moments and sustain your caregiving momentum, a little respite is essential.
An article posted on About.com by Carrie Hill, PhD states:
“Caregivers who use respite care often tell me that although caregiving is one of the hardest jobs they’ve ever had, they wouldn’t trade the experience for anything. Helping a family member or close friend who has Alzheimer’s disease can provide a sense of purpose and great satisfaction. Still, the emotional and physical demands of caregiving make it hard to be a caregiver 24 hours a day, 7 days a week. Without respite care — a temporary break from the demands of caregiving — you may be more susceptible to the effects of caregiver stress, such as depression, exhaustion and other health problems.
Carrie Hill, PhD, About.com “Why Caregivers Need Respite CareGiving Yourself a Break Helps You and Your Loved One” Updated: August 3, 2008
Be on the lookout for caregiver burnout. It can creep up on you without your noticing it. Caregiver burnout symptoms can include:
•depression •anxiety, irritability, or anger •feelings of exhaustion •self-criticism •Withdrawal from usual activities •trouble with handling caregiving responsibilities •substance abuse
The need for support for caregivers at home has received national recognition. State Human Resource Departments and Area Agency on Aging Services are offering more counseling and respite services for caregivers. The ARCH National Respite Services is also an organization that is reaching out to educate and support caregivers in many states. There is, however, one service that is highly valuable but very underused:
Adult Day Care to the Rescue!
Adult Day Care respite is two-fold. It gives the caregivers much needed time to themselves and gives their loved ones social and interactive therapy with their peers.
Many adult day services offer such things as:
•Social activities; music, movies, crafts, excursions •Meals •Fellowship support •Assistance with daily living •Nursing care •Help with activities of daily living •Medications •Physical therapy •Transportation
Finding an Adult Day Services provider takes a little investigating on your part. It is important to know what you are getting and that your loved one is comfortable with his or her new surroundings.
First: Ask for recommendations.
Check with your local Senior Center, Area Agency on Aging Services, Mental Health Centers, Doctor, Clinic, Family, Friends and neighbors. The best recommendation is by someone who has used the adult day services or is familiar with those who run it.
Second: Call and ask the facility to send you information.
Ask specifically to be sent the application, eligibility requirements and payment information.
Ask to see the calendar of activities, menus, hours and days of operation are needed to be sure to fit your schedule.
Ask about availability of transportation to and from the location and what is the cost.
Ask who runs the facility. Is it private, non-profit or a franchise or part of an assisted living facility or a nursing home?
Third: Visit the Adult Day Care facility.
Go visit the provider location along with the person you are caring for.
See if the staff is friendly.
Check that it is clean and odor free.
Ask about the experience of the staff.
Request a list of references.
Fourth: Find out the cost and payment requirements.
A survey from NCOA/NADSA provides the following information on fees:
“Fees for Adult Day Care providers range from $25 per day to $70 per day, with the average around $50 per day. Many facilities provide services with a sliding fee scale.”
One last word of advice. Don’t feel guilty about taking your loved one to adult day care.
Susan’s mother-in-law complained bitterly about leaving home and going to the adult day care facility, expounding on how Susan just didn’t want her around anymore. This only increased the guilt Susan was already feeling, but Susan was also determined that she needed the respite time the day care would provide and they pressed forward. That evening as Susan picked up Mom and helped her into the car, Mom — who suffered from dementia — exclaimed, “That was the nicest resort I have ever been to!”
To learn more about the AOA National Caregiver Support Program go to:
http://www.aoa.gov/prof/aoaprog/caregiver/caregiver.aspx
The National Care Planning Council supports Caregivers and Adult Day Care Providers
http://www.longtermcarelink.net/a7adultdaycareservices.htm
For more information on how a Reverse Mortgage can help you and your loved ones, please contact me at 503-421-0096, larry@PDX-Mortgage.com or go to my website at Oregon Reverse Mortgage
3.9% of Oregon’s 1st mortgages were at least 30 days late and 1.3% of Oregon homes were in foreclosure in the 3rd quarter of 2008 according to an article in today’s Oregonian, More Oregonians late on Mortgages by Ryan Frank. While these are alarming figures, the upside is that we are still doing better than most of the rest of the country.
I tried to find information on how many of these homes are owned by senior citizens and was unsuccessful. However, I would imagine that the numbers are high. Many seniors are on fixed incomes and if this income is tied to investments, they have seen a reduction in their assets. Many who were able to live off of the interest from these accounts are now having to withdrawal principle.
One of the areas that we are a little luckier then the rest of the country is that our home values have not decreased at much as many other states. According to the Oregon Economics Blog, aside from Medford and Bend we are doing better than the national average.
With foreclosures rising and home values decreasing, we are seeing a nasty trend. When a home goes into foreclosure, it is often sold for less then it is worth. This drives the value of the homes in the surrounding area down, which makes it harder for those owners to sell or refinance. If they are on the verge of not being able to make their payments, this can often result in yet another foreclosure, driving home values down further.
Since many Oregon seniors purchased their homes prior to the boom times of the last few years, and have equity in their homes, they have options that many of their peers in some of the harder hit states do not. Seniors age 62 and older may qualify for a Government Insured Reverse Mortgage.
Structured correctly, a Reverse Mortgage can provide a life line in these chaotic times. Whether it is to pay off the current mortgage, freeing up $500 to $200 per month in mortgage payments that no longer need to be paid, or to provide additional funds to make ends meet on a monthly basis, a Reverse Mortgage might be right for you or your loved ones.
Give me a call if you have any questions regarding your situation or the situation of a loved one.
Larry: 503-421-0096
HUD has recently posted a frequently asked questions regarding the use of a Reverse Mortgage to purchase a home on their web site. Please keep in mind that the lending limit in Oregon, as well as the rest of the country, for a Reverse Mortgage has been raised to $417,000. This does not mean that you cannot purchase a home with a Reverse Mortgage for more than $417,000, only that the amount that you qualify for will be based on $417,000. Your actual Reverse Mortgage qualification amount will still be based on your age and property value.
Here’s the HUD FAQ:
Home Equity Conversion Mortgage for Purchase
Frequently Asked Questions
1. What is HECM for Purchase?
HECM for Purchase allows seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage.
2. What is the purpose of the program?
The program was designed to allow seniors to purchase a new principal residence and obtain a reverse mortgage within a single transaction by eliminating the need for a second closing. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs, i.e., handrails, one level properties, ramps, wider doorways, etc.
3. What activities can be performed prior to January 1, 2009?
Lenders may take application but they may not process or perform services that would result in a charge to a prospective mortgagor.
4. Can lenders refer clients, who are interested in a HECM for purchase transaction, to a HUD-approved housing counseling agency before January 1, 2009?
No. Counseling on HECM for purchase transactions will become available January 1, 2009. Counselors need time to adjust to the new provisions
5. Can a lender lock-in the expected average mortgage interest rate on applications that are taken prior to January 1, 2009?
Yes. Lenders choosing to lock-in at initial application will do so at their own risk of knowing that the 120-day clock begins on the day the FHA case number is issued January 1st or later.
6. What property types are eligible? Existing one-to-four unit properties where construction has been completed and the property is habitable. See ML 2007-06
7. Can a HECM for purchase be used to satisfy outstanding payment obligations associated with a land contract?
Yes, if the property will be used as collateral for the HECM and the mortgage will be held in fee simple, or on a leasehold under a lease for not less than 99 years which is renewable, or under a lease having the remaining period of not less than 50 years beyond the date of the 100th birthday of the youngest mortgagor.
8. Can a lender take application on a property that is under construction and not habitable?
No. The lender may only take application once the Certificate of Occupancy or its equivalent has been issued.
9. What property types are ineligible?
10. Are set asides for property charges (i.e., tax and insurance) allowed
Yes.
11. If the lender suspects the senior has become involved in a property flipping scam, who should be contacted?
If a lender suspects a senior has become a victim to a property flipping scam, the Processing and Underwriting Division of the local HOC should be contacted.
Complaints may be reported to HUD’s Inspector General Hotline at:
HUD Office of Inspector General Hotline, GFI 451 7th Street, SW Washington, DC 20410
Toll free: 1-800-347-3735
TDD: (202) 708-2451
12. Are gifts an acceptable source of funding?
No. Prospective mortgagors may only use their own money or money obtained from the sale of assets. FHA prohibits the use of loan discount points, interest rate buy downs, closing cost assistance, builder incentives, gifts or personal property given by the seller or any other party.
13. What would be an “allowable FHA funding source” for gap financing of the equity portion?
A withdrawal from the mortgagor’s savings or retirement account would be an acceptable funding source.
14. Can prospective mortgagors apply credit card cash advances towards the required monetary investment or closing costs?
No. This would be a violation of 24 Code of Federal Regulations 206.32(a), which requires all outstanding obligations connected to the HECM transaction, purchase or otherwise, to be satisfied prior to or on the date of closing.
15. Are seller concessions allowed?
No. Seller concessions are applicable to forward mortgages only.
16. Is seller financing permitted?
No
17. Is the Real Estate Certification required?
Yes
18. When purchasing a new principal residence, if the HECM proceeds do not cover the sales price, can part or all of the property’s indebtedness be subordinated behind the first and second HECM liens if the existing lien holder is willing to execute a subordinate agreement?
No. All existing liens must be satisfied at the HECM closing.
19. Can prospective mortgagors obtain a secured or non-secured loan from another asset (i.e., car, home equity line of credit, or investment property or second home) to satisfy the monetary investment or closing costs?
No. Consistent with existing policy, bridge loans and other interim financing methods associated with HECM transactions are prohibited, unless the unpaid or outstanding obligation can be satisfied prior to or on the day of closing.
20. Should the lender obtain a credit report for non-borrowering spouses?
Yes. Although one spouse will become the HECM mortgagor, the lender must obtain the credit report for a review of financial obligations, monetary judgments and liens that could jeopardize the HECM lien status/clear and marketable title.
21. Under what conditions may a senior cancel the purchase transaction?
The senior may decide to cancel the purchase transaction at any time prior to the date of closing. If the senior decides to cancel the transaction, he/she must notify all parties in writing. Where earnest money has been provided, the senior should review the sales contract to determine if the earnest money is refundable. The Federal Reserve Board of Governors should be contacted for right of rescission and Truth in Lending Act guidance.
22. Can the HECM mortgage participate in a rent back/leaseback agreement with the seller?
No. When purchasing a new principal residence, the HECM mortgagor has 60 days to occupy the home. Unlike a forward mortgage, there is an increased risk to FHA when the home is not occupied by the HECM mortgagor. Prior to closing, the HECM mortgagor and seller should agree to a date for physical occupancy of the property and the lender should confirm occupancy prior to their submission of the case binder to the local HOC for endorsement.
23. Are the mortgage proceeds paid to the seller through escrow?
The title company (settlement agent) is responsible for disbursing funds in accordance with State law.
24. Are there special procedures for foreclosure homes that will serve as collateral for a purchase transaction?
No. FHA has sufficient valuation guidelines related to comparable sales and declining markets to address the resale of foreclosed properties. HUD has imposed a standard of accountability to which lenders, sponsor lenders, and loan correspondents will be held is the same as the standard used to impose civil money penalties for program violations, and that standard is one of knowing (actual knowledge) or had reason to know.
25. Does FHA have special eligibility requirements for first-time homebuyers?
No. FHA encourages all first-time homebuyers to meet with a reverse mortgage counselor that offers pre-purchase counseling to educate themselves on the responsibilities of becoming a homeowner. Prior to signing a sales contract, FHA encourages a home inspection of all properties that will serve as collateral for HECM for purchase transactions. The inspection serves two purposes, to determine the magnitude, if any, of repairs and/or rehabilitation the home as well as helps the buyer to negotiate the purchase price in situation where a home requires repair or rehabilitation.
Let me know if you have any questions on this or any other matter regarding a Reverse Mortgage.
As of 1/1/2009, seniors age 62 and older can use a federally insured Reverse Mortgage to purchase a home. Under the same HECM program that is being used by many seniors to access the cash equity in their home, seniors now have another tool to use when they look at purchasing a new home.
The FHA insured HECM is a huge improvement to the old Fannie Mae Homekeeper that could be used to purchase a home.
As it currently stands, a senior looking to purchase a home would either have to pay cash or qualify for a mortgage based on their fixed income. For many, this would liquidate their savings or prevent them from buying a home that they felt comfortable living in.
With the new program, a senior could either purchase more home without having a monthly mortgage payment, or free up a significant amount of their cash to live on or invest elsewhere.
While we don’t know all of the details, we can assume that the lending limits for purchases will be similar to the limits for refinances. If so, here are some examples of what you could expect:
A 62 year old borrower could purchase a $250,000 home with an approximate down payment of $120,000. There would be a lien against the property, but there would be no monthly mortgage payment. As with a reverse mortgage used for a refinance, the loan, plus interest would be due and payable upon death or 1 year after moving out of the property.
If this same borrower was 75, the $250,000 home would require a down payment of approximately $90,000.
Look for more details here as the dust settles. Technically, we can’t even take an application until 1/1/09, so I don’t have a calculator that will give me more exact figures.
That said, if you are a senior, and looking at purchasing a home next year, you should at least consider using a Reverse Mortgage.
Call me, Larry, if you have any questions. 503-421-0096
A new exciting component of the recent FHA modernization that was recently passed and signed into legislation is the increase in loan limits for the FHA’s HECM Reverse Mortgage. Previously, loan limits were based by county, and the more rural the county, the lower the limits.
Now, all counties will be at $417,000.
So what does this mean to you?
If you are 75 and own a home worth $400,000 free and clear and live anywhere in Oregon, under the new limits, you would qualify for approximately $270,000. This is a major increase over the old limits. Previously, this borrower would have qualified for approximately $196,000.
In the above situation, the proceeds could be taken as a lump sum of $270,000, a monthly annuity of around $1700 per month or kept as a line of credit and used as needed.
If your home is worth more then $417,000, then you are still capped at $417,000 in home value. The upside to this is that you will still have a lot of equity left in your home.
The new limits combined with a limit on closing costs will allow more seniors to benefit from a Reverse Mortgage.
Call me for details on your exact situation.
Times are changing and not necessarily for the better. There was a time when we could look forward to working for 30 some years and then retire. We could rely on a pension from our employer, some savings and Social Security. If we were lucky we would have minimal debt and good health. We could look forward to spending our retirement days travelling, enjoying our grand kids or our hobbies.
But not so any more for many seniors, especially those Boomers just entering their golden years. Many have found that their pensions have been dismantled by their employers, or like me, have bounced around too often to really development enough of a pension to rely on. Social Security is in trouble and can’t be relied on for more then another 20 or so years.
In an excellent article, Boomers’ Financial Future Spells: W-O-R-K, Doug Bates of the Oregonian, writes that many seniors will need to continue to work or go back to work to make ends meet. He quotes John Rother of AARP “we estimate that approximately two-thirds of early boomer households, who are aged 54 to 63, are financially unprepared for retirement — that is, they have not accumulated enough savings to maintain their lifestyle as they age. Meanwhile, their predicament is worsening with the fall in home values and stock prices that began in 2007.”
For many, working at least par time will be ok. It will keep them active, help them to meet their needs and stimulate the economy. But for those who were expecting to have a retirement like their parents, there might be a surprise waiting for them.
Just getting rid of their mortgage or debt would allow many to retire. This can be accomplished by accelerating their current payments, or using a Reverse Mortgage to eliminate their monthly mortgage payment. For others, it will be staying in the work force in their current jobs or finding another job more appropriate for their aging bodies.
Those who plan to stay in their current home for many years, and who qualify for a Reverse Mortgage, could find that a wonderful solution is to trade their current equity for a more comfortable retirement. They need to speak with an expert who will put their long term best interests at heart. A properly structured Reverse Mortgage can provide access to he equity and well as protect it. A poorly structured one will deplete the equity quickly and leave the senior with few options in the future.
For those who need to aggressively pay down their debt, or get better advice on retirement planning, a company like Financial Destinations, Inc (FDI) is a good alternative. FDI can provide a blueprint for paying debt off in a fraction of the time as well as access to CPA’s, Financial Planners, Atty’s, 24/7 access to a Physician, discounted prescriptions and an excellent investment product. For more information, visit www.MorrisEquityGroup.com or call me.
If you desire to help others become debt free and financially literate, there is an excellent income opportunity as well. This could be a great way to reduce your spending and increase your income in retirement, or as you approach retirement.
I think that everyone agrees that walking is good for our health. The problem often is doing it. Some of us really enjoy it, others find it boring and a waste of time. Or for me, it’s just finding the time or making it a priority. Once I get started I really enjoy it, but it’s a matter of getting started. My Doctor and wife tell me I need to and I agree….but….there is always something else I feel that I should be doing.
In a recent AARP Bulletin article by Lambeth Hochwald, Walking a Little Can Go a Long Way, she expounds on some of the merits of walking. Included in her list are:
1. It’s great for the heart 2. It cuts breast-cancer risks 3. It helps you sleep 4. It cuts down on aches and pains 5. It makes you happy 6. It keeps you slimmer 7. It staves off senior moments 8. It protects your bones
It’s a nice article, I encourage you to click on the link above and read it.
One of the things that make walking easier is to have a fun place to walk. A new website WalkScore.com has the ability to tell you how walkable your neighborhood is, or those around you. Plug in a city or address and see what’s available. Portland, OR is the 10th best city in the nation. Check it out below. You can also use it find places to visit while you are getting healthier.
What does this have to do with a Reverse Mortgage? Nothing, and everything. A Reverse Mortgage can help you financially stay in your home while walking can help you physically stay in your home.
