Archive for April 2009

HECM for Purchase

April 30, 2009

CB028929Recently, HUD has authorized the use of a reverse mortgage to purchase a home. Sounds a little odd, but is actually a great way for seniors to downsize with the added “No Monthly Payment” that reverse mortgages offer.

Here is how it works. Let’s say that a couple are in a two story home that they really don’t see as a functional house for them as they age and their ability to get up and down the stairs becomes more difficult. Though their income is at a point where they don’t really want to add an additional monthly payment. A HECM for Purchase will allow them to come in with a down payment, likely used from the sale of their home, of anywhere between 35%-40% (depending on the age of the youngest borrower) of the appraised value of the new home and not have any payments for the remaining years of their life while they live at home.

The reverse mortgage comes with all of the guarantees that a typical reverse mortgage would have. Though it was possible to do a reverse mortgage in the past on a purchased home, it could only be done after the original mortgage (we call it a forward mortgage) was approved and completed. The problem with this is that they would have to double pay closing costs, origination fees for both loans. This provides more flexibility and options for those who would like to move, but didn’t feel that they wanted to pay the additional fees upfront.

Be aware that because it is a different type of transaction and that underwriting is more along the lines of a traditional mortgage underwriting, if there are plans to rent their existing home, disclosures of income may be a requirement, as well as other disclosures may be required.

For more details surrounding this new program, visit here.


Funding Long Term Care

April 29, 2009

CB044104It appears that long term care costs continue to increase which is putting a squeeze on those baby boomers who are on the brink of retirement. “Because the costs of long term care insurance and other health related expenditures are rising and the income system is contracting, these latest findings raise major concerns about the retirement security of baby boomers and succeeding generations.” That is the outlook from Alicia H. Munnell, Director of Center for Retirement Research at Boston College.

Options for long term care financing include Long Term Care Insurance, Medicaid, or private pay. And how much does one need in order to cover these expenses? That is a loaded question, but figure a good long term care facility starts at $3,500/month. Private pay as an option could be a spendy one. Medicaid will cover those with few financial assets, but the level of care is minimal, and finding a facility that takes Medicaid can be difficult.

For those who are considering their long term care plan, it would be wise to talk to an expert in the field. Long Term Care Insurance costs vary depending on a lot of factors. If you are concerned about this cost, take a look at how a reverse mortgage may play a role in financing this high cost product. If health history prevents a Long Term Care Insurance policy, then it really does pay to look into the reverse mortgage option. Planning for this type of event is not necessarily a fun thing to do, it may prevent a major headache down the road both for you and your heirs.

For questions about any of these options, please visit my website here. And for a full report on the rising costs of long term care, visit this article.

Check Out My Website

April 28, 2009

f0796_gullifordg1For years I have wanted to develop my own website that provides information about who I am and answers many of the questions that people have about reverse mortgages. I am proud to say that it has finally happened and much thanks goes to Rachel in marketing at Genworth Financial Home Equity Access. It is finally completed and looks great! Check it out at here!

Medicare News

April 28, 2009

42-16163361I am sorry to my readers for including this information in my blog today, but I think it is worthwhile information. With federal, state and local economies bringing out their axes, we are seeing a host of cuts in every industry across the board. It is no different with the medical insurance programs that seniors rely on to cover the majority of their medical needs.

Fast Facts from Medicare Right Center: Only 25 percent of US retirees in 2009 say they are very confident that they will be able to cover the cost of medical expenses during their retirement, compared to 41 percent of retirees in 2007. (Employee Benefit Research Institute, The 2009 Retirement Confidence Survey: Economy Drives Confidence to Record Lows; Many Looking to Work Longer, April 2009).

For many seniors, the increase in costs or the reduction in coverage in Medicare could bring with it critical shortfalls in care and/or a shortfall in senior’s ability to afford such care.  If this is of interest to you, sign up for Medicare Watch.

My Longest Living Reverse Mortgage Client

April 25, 2009

FOW088My longest living client called me the other day. Three years ago I helped her with her reverse mortgage. At that time she was 96 years old. I met with her and her nephew and explained all of the benefits of a reverse mortgage, as well as all of the future implications. She had had her home free and clear and simply needed to supplement her income and have some money left on the side for emergency purposes. A very common situation.

Today she is 99. She called me and in her sweet voice said, “This is Mary Smith . . . do you remember me?” Well, of course, I remembered her. . . . how could I forget her? Though she is 99, she still gets around. Her favorite thing to do is to gamble. Now she doesn’t do it real often, but she has a friend that takes her to the casinos periodically. In fact, the last time she went she won $1,000. But of course, she decided to give it back.

One of Ms. Smith’s favorite things to do is to garden. Even at 99 she keeps up her yard, getting on her knees, and working the soil so that it produces the best harvest possible. She told me that she has done it since she was a little girl. Her mother taught her all of the ins and outs of gardening, and she still loves it today.

My favorite memory of Ms. Smith is how she gets around the house. Yes, she is 99, but she pushes a walker like there is no tomorrow. She knows where she wants to go and she gets there without a bump in the road. Ms. Smith also loves to do puzzles. I suppose that that is why she is so sharp. Her mind is incredible.

It is a gift to be a part of the lives of my clients. We talk periodically and I continue to assist them in any way that I can.  With all of the lender issues occuring today, they are often concerned that the economic conditions will effect their prized reverse mortgage.  I am always happy to tell them that they are safe and secure!

Cash Flow Squeeze

April 24, 2009

j0341897We all seem to be impacted by the current financial crisis, whether it is our income, investment portfolio, interest rate hikes, increased taxes, or whatever, most of us have seen our financial situation negatively impacted. For retirees, it is even more of an issue as they have depended upon their financial portfolio’s to ride them into the sunset. But have you ever looked at the opportunities that exist?

Etan Ewing, president of, a free online portal, tells of the opportunities that lie in front of us that can help us during this time. One of my colleagues describes 8 Ways to Squeeze the Most from Retirement Planning.

Reverse Mortgages: Live Pricing

April 22, 2009

j03826741For years prior, reverse mortgages were fairly constant. That is, we were in a fairly stable environment. Today, with the credit crunch that we find ourselves in, the issue is anything but stable. Where home values are a major problem in all parts of the country, and interest rates are at all time lows, the industry is in a position that it hasn’t ever seen. In fact, I just read a blog recently that did a great job of explaining more of the details and how our products are now based on “live pricing” rather than the stable pricing of the past.  Check out this blog entry to better understand how we got to be where we are today: