Reverse Your Mortgage

Reverse Mortgage Testimonial

Reverse Mortgage Home Purchase Scenario

“Use a reverse mortgage for purchase, really! How do you do that?” This is often the response when I talk to real estate professionals and potential clients. Purchasing a home with a reverse mortgage is not common place. It is mostly an unknown concept. There are a number of reasons why you would use a reverse mortgage to buy a home.

1.    You need to downsize or move near a family member.

2.    You are living on a fixed retirement income and cannot qualify for a traditional mortgage.

3.    You want more liquid cash for your retirement.

4.    You do not want a house payment.

Just recently I spoke to a potential borrower about a reverse mortgage. She and her husband were very interested in using the proceeds to do some remodeling of their home. During our conversation I asked her what their long term plans were. She shared with me that there was a strong possibility of moving to another state to be near their daughter. I shared with her that now is not the time to do a reverse mortgage. It would behoove them to consider the reverse mortgage for their move to the other state not now. See the following scenario of buying a $350,000 home with a reverse mortgage. There will be no mortgage payments for the rest of their lives.

Home Purchase Price:                                  $350,000.00

Cash to Close:                                                $162,474.00

Reverse Mortgage applied to Purchase:    $187,526.00

If you have a reverse mortgage question, call Angella 866-949-7030 or log onto www.reverse-your-mortgage.com

 

JUMBO REVERSE MORTGAGE PRODUCT INTRODUCED-Is the market stabilizing?

The reverse mortgage industry has not been immune to the chaos of the housing market and the economy.  Three years ago the FHA program appeared to be accomplishing what it set out to do, create a stable market for reverse mortgages.

Congress created the Federal Housing Administration (FHA) in 1934. When the FHA was created, the housing industry was flat on its back:

• Two million construction workers had lost their jobs.
• Terms were difficult to meet for homebuyers seeking mortgages.
• Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over three to five years and ending with a balloon payment.
• America was primarily a nation of renters. Only four in 10 households owned homes.

During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war.[1] These FHA programs promoted the home ownership market.

 The motive is similar for FHA reverse mortgages. In 1988 President Reagan signed FHA reverse mortgage insurance legislation. Just three years ago, it appeared FHA had done its job. We had over 15 proprietary reverse mortgages available in addition to the FHA programs. Now as a result of declining home values and a contracted secondary market, we were again limited to offering just the FHA reverse mortgage programs until now.

 1^st Reverse a subsidiary of Wilmington Savings Fund Society, FSB has launched a jumbo reverse mortgage product called FLEX-XL. But before you get too excited, remember, “The proof of the pudding is in the eating.”

Here are some highlights:

·         All borrowers must be 62 or older

·         Eligible property types include single family homes, condos, PUD’s and 2-4 unit owner occupied multiplex

·         Program offered in: AZ, CA, CO, CT, DOC, DE, FL, GA, HI, IL, MI, MD, NY, NC, NH, NJ, NM, MD, NY, NV, OH, OR, PA, RI, SC, VT, WA, VA, WI

·         Can be used as refinance or PURCHASE

·         Interest rate: 1 month LIBOR plus 5.5% margin

·         All proceeds must be drawn at closing, no credit line is available

·         No credit, or income qualifications

This is a very conservative product; borrowers can expect proceeds of 15-30% of home value. The product is best suited for homes valued at 1.5 million or more.

If you have a reverse mortgage question call Angella, 866-949-7030 or log onto www.reverse-your-mortgage.com.

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[1] http://www.hud.gov/offices/hsg/fhahistory.cfm

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 

• home remodeling services -- making a home more serviceable to the elderly;
• safety alert systems and technology;
• motion sensors to monitor movement;
• telehealth services -- using home-based computer systems for the doctors office or a nurse to monitor vital signs and
• even a pill dispenser that notifies when it is time to take medication. 

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”  

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:

• companionship
• grooming and dressing
• recreational activities
• incontinent care
• handyman services
• teeth brushing
• medication reminders
• bathing or showering
• light housekeeping
• meal preparation
• respite for family caregivers
• errands and shopping
• reading email or letters
• overseeing home deliveries
• dealing with vendors
• transportation services
• changing linens
• laundry and ironing
• organizing closets
• care of house plants
• 24-hour emergency response
• family counseling
• phone call checks
• and much more.

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.