Senior Living Stories
Senior Living Stories by Scott Underwood
Is retirement in your immediate future? A recent survey found 14% of baby boomers have no retirement savings while the largest majority of boomers (55%) had balances under $100,000. While $100,000 may sound like a lot, it wouldn’t hold up today. The Reagan Administration was able to see into the future back in the late 1980’s and foresaw that the middle aged workforce’s retirement planning might not hold up to life expectancy in the next few decades.
The Home Equity Conversion Mortgage Insurance Program, now called the Reverse Mortgage, was first used by a bank executive in 1961 as an act of kindness to help a struggling widow. By the 1970’s the Veterans Administration was working on a similar concept, and still is considering it today.
In 1988, the Reagan Administration passed the bill for the federally insured HECM program still used by people age 62 and above. Your home’s equity can be used to:
· supplement retirement income by creating a lifetime income with tax free money.
· pay off credit cards.
· age in place – pay for in-home care-giving.
· help family members or fund college.
· eliminate your current monthly mortgage payment.
· help you have many more very merry Christmases!
Misconceptions of the program are common, but mostly untrue. Homeowners always retain title to their home which will still pass to their estate. The built in FHA insurance insures you can’t outlive the loan and the amount owed can never exceed the home’s value. Also, in 2000 HUD started requiring third party counseling to ensure the homeowner understands all of their options.
The Reverse Mortgage program can be a smart choice for homeowners age 62 and above giving them the option to convert built up equity in their beloved home to help support them as they grow older. Unlike a traditional mortgage the Reverse Mortgage does not have any job, income, or credit requirements.
If retirement in your immediate future and you want to learn more about Reverse Mortgages, listen to pre-recorded information by calling (866) 254-1424 ext. 3 or to speak directly with me, Scott Underwood at ext.1.
The Home Equity Conversion Mortgage Insurance Program, now called the Reverse Mortgage, was first used by a bank executive in 1961 as an act of kindness to help a struggling widow. By the 1970’s the Veterans Administration was working on a similar concept, and still is considering it today.
In 1988, the Reagan Administration passed the bill for the federally insured HECM program still used by people age 62 and above. Your home’s equity can be used to:
· supplement retirement income by creating a lifetime income with tax free money.
· pay off credit cards.
· age in place – pay for in-home care-giving.
· help family members or fund college.
· eliminate your current monthly mortgage payment.
· help you have many more very merry Christmases!
Misconceptions of the program are common, but mostly untrue. Homeowners always retain title to their home which will still pass to their estate. The built in FHA insurance insures you can’t outlive the loan and the amount owed can never exceed the home’s value. Also, in 2000 HUD started requiring third party counseling to ensure the homeowner understands all of their options.
The Reverse Mortgage program can be a smart choice for homeowners age 62 and above giving them the option to convert built up equity in their beloved home to help support them as they grow older. Unlike a traditional mortgage the Reverse Mortgage does not have any job, income, or credit requirements.
If retirement in your immediate future and you want to learn more about Reverse Mortgages, listen to pre-recorded information by calling (866) 254-1424 ext. 3 or to speak directly with me, Scott Underwood at ext.1.
To stay or go? “When I retire I plan on moving to a smaller home or I’ll relocate to be closer to my children and grandchildren.”
Although people may make similar statements in middle age, the reality is quite different. One study found the general move rate for seniors aged 55-64 to be just 7.4 percent per year. Clearly, while the idea of relocating to a senior-centric area (such as Florida) or to be nearer adult children might appeal, the pull of the home where they’ve raised those children, built a life, entertained their friends, and created a lifetime of memories is often stronger.
There are emotional and logistical issues to moving and/or downsizing, as well as financial considerations. For some people, moving makes a lot of sense: the house is just too big, or their health isn’t up to caring for it. For the vast majority, however, “Aging In Place” is the way to go. Another study shows that living in your home with in-home care instead or going to a nursing home doubles the remainder of your life!
For most people leaving their long-term homestead means:
· Emotional upheaval. Their house holds a lifetime of memories, as does the neighborhood. They’ve built relationships with everyone from the grocer to the librarian to their auto mechanic; it can be as difficult to let go of these peripheral connections as it is to say goodbye to cherished friends.
· Relinquishing friendships. It’s harder to meet and form new friendships as we age, partly because we don’t have the built-in people access we did when we were younger (through school, work, civic and community activities, health clubs, etc). Some seniors may have decades-long friendships in the town where they’ve lived all their adult lives; losing these friends at this life stage could precipitate depression.
· Logistics. Not only does relocation — especially to a smaller dwelling — necessitate selling, storing, or giving away precious possessions, which is a huge task in itself, there’s also the matter of adjusting to a whole new area, and choosing a new doctor, dentist, hairdresser, grocery store, etc. Many people can find these tasks daunting, depending on their age, mobility and overall health.
The Federally Insured 23 year old Reverse Mortgage program can be a smart choice for most homeowners age 62 and above. The equity in their beloved home can help support them as they grow older.
Survey Says...............................We all remember the days when Richard Dawson host of Family Feud, would utter those famous words, “Survey says’, and viewers, players, and audience members alike would all anxiously anticipate the answer.
Let’s pretend for a brief moment that I, Scott Underwood, am the host of Family Feud. The question is: ‘What income do Senior Citizens rely on to make ends meet in their retirement years?’
· Expect to work beyond retirement years
· Live on Social Security alone
· Rely on savings
· Rely on relatives
· Take advantage of the Federally Insured Reverse Mortgage Program
Truth is anyone of these answers could fit your situation. There is no one size fits all answer. Some of the surveys that I have recently read stated 75 percent of middle-income people between ages 45-65 surveyed expect to have to work into their retirement years. Another survey said, the percentage of economically insecure seniors has surged 75-percent, according to the Institute on Assets and Social Policy’s brief titled: From Bad to Worse: Senior economic security on the rise. According to a July, 2011, Research and Policy Brief, circumstances for retired seniors have gone from bad to worse, as household budgets are increasing while household assets are draining away.
Today more and more people age 62 and above are using the 23 year old Federally Insured Reverse Mortgage program so they can retire at their desired retirement age or supplement their current retirement income. Many people just want to get rid of their mortgage payment. But it’s not just the homeowners that are reaching out to me; now it’s also their adult children trying to find the funding to keep their parents in their familiar home by using the equity to pay for in-home care.
To fight senior fraud and abuse, the FHA constantly updates safeguards to ensure people in my industry aren’t “doing the wrong thing”. One of the best safeguards that I can offer you is to furnish you with a list of ten HUD Certified Counseling Agencies, so you can choose the agency of your choice. Reverse Mortgages require third party counseling just to make sure that seniors fully understand the entire process of Reverse Mortgages.
One key component of the Reverse Mortgage program is that you can never owe more than your house is worth thanks to FHA mortgage insurance which is an integral part of the Reverse Mortgage program. The loan is not due and payable until the borrowers no longer occupy the home as a principal residence.
Get a check each month instead of writing one! A 70 year old window named Margaret allowed me to help her with a government insured Reverse Mortgage. She lives in a $200,000 home that is completely paid for, but she is unsure about her financial future. She looked at 2 options; receiving a payment of $730 a month for life or $125,000 lump sum cash. If she didn’t have a paid for house and she would have had a mortgage or home equity line, we would have paid the mortgage off and she would have received the remainder. For instance, paying off a $50,000 mortgage, Margaret would still receive $400 a month for life. Yet another example would have been if Margaret had a $125,000 mortgage. Even though she would have only received enough to eliminate her mortgage, she would be relieved of the $750-$850 a month mortgage payment for life.
Get a check each month instead of writing one! A 70 year old window named Margaret allowed me to help her with a government insured Reverse Mortgage. She lives in a $200,000 home that is completely paid for, but she is unsure about her financial future. She looked at 2 options; receiving a payment of $730 a month for life or $125,000 lump sum cash. If she didn’t have a paid for house and she would have had a mortgage or home equity line, we would have paid the mortgage off and she would have received the remainder. For instance, paying off a $50,000 mortgage, Margaret would still receive $400 a month for life. Yet another example would have been if Margaret had a $125,000 mortgage. Even though she would have only received enough to eliminate her mortgage, she would be relieved of the $750-$850 a month mortgage payment for life.
Greener grass this summer for one man! How many summers have you dragged the garden hose and sprinkler around the yard? Recently I helped a couple in their 70’s with an F.H.A. Reverse Mortgage. They told me a rather funny story that most of us can relate to. The husband had been dragging the garden hose and sprinkler around their yard since 1967 making sure the grass received plenty of water to stay green. He had done this task a few hours a week each summer and his wife had been cleaning up his mess because he didn’t take off his shoes when he came indoors. After getting a Reverse Mortgage, he splurged and had an automatic in-ground sprinkler system installed in the front and rear yard. Who did this really benefit most, the husband of the wife? Its seems like it benefitted them both. What could you do with a little more retirement income? Relax after eliminating your house payment, payoff credit cards, being able to pay for medicines during the donut hole, or spend more money on grandchildren.
Reverse Mortgages are not just for cash-strapped people; or as a last minute option in an emergency. Many people have used this financial tool for home modifications; in-home care; dream vacations; stopping foreclosure; financial security; medical bills; to eliminate mortgage payments; help out family during these rough economic times, or just to replenish their nest egg.
It all depends on how you look at it? I find that the same view of one aspect of a Reverse Mortgage is very different. A homeowner with a $150,000 house with a $93,000 mortgage balance owed and payments of $850 a month might qualify for enough from the Reverse Mortgage to pay off the $93,000 mortgage and eliminate the $850 per month payment. One person might say that’s not worth it if I can’t walk away with cash as well, but the next homeowner might say that’s $10,000 a year to supplement my retirement income, so I look at it like I’m getting $850 a month from the Reverse Mortgage.
Virtually anyone can qualify if you are at least 62 and live in your home as a primary residence.
The amount of reverse mortgage benefit for which you may qualify, will depend on, your age at the time you apply for the loan, the reverse mortgage program you choose, the value of your home, & current interest rate.
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
The loan is not due and payable until the borrower or borrowers no longer occupy the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries.
For additional Reverse Mortgage information, caluclations, information, or to schedule a metting call (205) 908-2993, 256-677-9767, 1-866-254-1424 or Email Scott Underwood
