By Owen Coyle, Market Mortgage
MISCONCEPTION #1: “IT’S TOO GOOD TO BE TRUE”.
THE TRUTH: The money is provided by Fannie Mae and is federally insured by the U.S. Federal Government (FHA). This program is made available from HUD-approved lending institutions. This “Government Insured Program” is 100% safe!!!
MISCONCEPTION #2: “THE LENDER OR GOVERNMENT WILL TAKE MY HOME”
AFTER I DIE”
THE TRUTH: The homeowner remains the owner of the home, title does not change. After the homeowner dies, the home goes to the heirs. The title and the responsibilities of home ownership stay with the homeowners; they must pay the property taxes and homeowners insurance and take reasonable steps to maintain their property.
MISCONCEPTION #3: “I CAN OWE MORE THAN MY HOME IS WORTH”.
THE TRUTH: The homeowner or their heirs can never owe more than the value of the home. Even if you live to be 100, and when you move out, sell your home or pass away, the real estate market is at an all time low, you still cannot owe more than the value of the home. Bankers call this a “non-recourse loan”, meaning that your Reverse Mortgage can never leave your heirs in debt.
MISCONCEPTION #4: “I CAN BE FORCED TO MOVE OUT OF MY HOME”.
THE TRUTH: The homeowner can stay in their home “FOREVER”.
MISCONCEPTION #5: “MY CHILDREN WILL OBJECT TO REVERSE MORTGAGE”.
THE TRUTH: Experience shows that the children are strongly in favor of their parents getting a Reverse Mortgage and enjoying all the benefits it creates. It is a reward for many years of home ownership. The children of every one of my clients were 100% in favor or the Reverse Mortgage.
MISCONCEPTION #6: “IF I HAVE AN EXISTING MORTGAGE, I CAN’T GET
A REVERSE MORTGAGE”.
THE TRUTH: The existing mortgage is paid off with the available Reverse Mortgage funds.
Thursday, February 19, 2009
Reverse Mortgage True or False
1. If I get a reverse mortgage, that means the bank holds title to my home. - False.
Title does not get transferred into the bank’s name. Throughout the life of the loan, you own your home.
2. Even though I have done my research on reverse mortgages and fully understand the product, I still have to obtain reverse mortgage counseling. - True.
All programs require independent, third party counseling by an approved entity, which includes HUD, Fannie Mae or Financial Freedom for the Cash Account product.
3. I am not allowed to hold title in my trust. - False.
The lending institutions will allow you to hold title in your trust as long as you meet all of the lender’s and/or HUD’s guidelines.
4. If I decide to sell my home, the bank will make me payback the loan and will collect a portion of the appreciation. - False.
The lender will only collect the amount that is due to them.If the loan balance is larger than the home value, the lender will only collect the proceeds from the sale. You can never owe more than what your home is worth.
5. If I don’t want to pay my taxes and insurance,the lender can set aside a portion of the loan funds and pay them for me. - True.
If you would like to impound the taxes and insurance, depending upon the lender, they can arrange that for you.
6. I must have good credit to qualify for a reverse mortgage. - False.
The lender will run a credit report for tax and federal liens.All recorded liens must be paid off and property taxes must be paid current at the time of closing so the lender can take first position.
7. My house must be in prime condition if I am to be considered for a reverse mortgage. - False.
The lender requires that the home meet certain guidelines. If you are considering a Home Equity Conversion Mortgage, it must also meet HUD’s requirements. You may also qualify for a repair set-aside if work needs to be done on your home. Check with your lender for more information.
8. I am allowed to change my payment plan after the close of escrow. - True.
You may contact the servicing department and make arrangements to change your plan for a small fee.*
9. The only homeowners that get a reverse mortgage are seniors who can’t afford to make their monthly mortgage payments. - False.
We have found that seniors will use the money to go on vacation,buy a new car, remodel their home, pay for their grandchildren’s education, buy another home, or just to feel secure in their golden years.
10. The older I am, the more money I can get from a reverse mortgage. - True.
A senior that is 80 may receive more money than a 62 year old senior. The loan amount is based off of age, home value, and life expectancy.
*For TX, please make sure to check with your lender on current options available.
Title does not get transferred into the bank’s name. Throughout the life of the loan, you own your home.
2. Even though I have done my research on reverse mortgages and fully understand the product, I still have to obtain reverse mortgage counseling. - True.
All programs require independent, third party counseling by an approved entity, which includes HUD, Fannie Mae or Financial Freedom for the Cash Account product.
3. I am not allowed to hold title in my trust. - False.
The lending institutions will allow you to hold title in your trust as long as you meet all of the lender’s and/or HUD’s guidelines.
4. If I decide to sell my home, the bank will make me payback the loan and will collect a portion of the appreciation. - False.
The lender will only collect the amount that is due to them.If the loan balance is larger than the home value, the lender will only collect the proceeds from the sale. You can never owe more than what your home is worth.
5. If I don’t want to pay my taxes and insurance,the lender can set aside a portion of the loan funds and pay them for me. - True.
If you would like to impound the taxes and insurance, depending upon the lender, they can arrange that for you.
6. I must have good credit to qualify for a reverse mortgage. - False.
The lender will run a credit report for tax and federal liens.All recorded liens must be paid off and property taxes must be paid current at the time of closing so the lender can take first position.
7. My house must be in prime condition if I am to be considered for a reverse mortgage. - False.
The lender requires that the home meet certain guidelines. If you are considering a Home Equity Conversion Mortgage, it must also meet HUD’s requirements. You may also qualify for a repair set-aside if work needs to be done on your home. Check with your lender for more information.
8. I am allowed to change my payment plan after the close of escrow. - True.
You may contact the servicing department and make arrangements to change your plan for a small fee.*
9. The only homeowners that get a reverse mortgage are seniors who can’t afford to make their monthly mortgage payments. - False.
We have found that seniors will use the money to go on vacation,buy a new car, remodel their home, pay for their grandchildren’s education, buy another home, or just to feel secure in their golden years.
10. The older I am, the more money I can get from a reverse mortgage. - True.
A senior that is 80 may receive more money than a 62 year old senior. The loan amount is based off of age, home value, and life expectancy.
*For TX, please make sure to check with your lender on current options available.
FAQ for Children and Heirs
1. Will Mom and Dad use up my inheritance?
While tapping into their equity, your parents’ home may be appreciating in value,which could allow for some equity left at the end of the loan. They are also able to live comfortably without having to depend upon family members to support them.
2. Will the bank take their home?
No, the bank will not take their home. Throughout the life of the reverse mortgage, your parents will continue to own their home and retain title.
3. How much money will they owe when the loan has to be repaid?
Your parents will owe the total amount borrowed, accrued mortgage insurance premiums, accumulated interest, servicing fees, and any other costs and fees financed through the loan amount.
4. When do my parents repay the loan?
There are three viable options for your parents. They can sell their home to repay the lender and collect the proceeds, choose to reimburse the lender directly from a personal account, or refinance the loan.
5. What happens to the equity if my parents or I decide to repay the loan by selling the house?
There are two options. Either your parents or the heirs can keep the home and pay the balance due on the reverse mortgage, or they can decide to sell the home and use the proceeds to pay off the reverse mortgage. Either way, the remaininge quity is retained by the owners or heirs.
6. What happens to my mom and dad’s house if they move into a senior care facility?
A reverse mortgage becomes due and payable when the last borrower moves out of his or her home permanently. For instance, moving into a senior care facility, selling the home, passing away or moving in with the children.
7. What happens if the loan balance becomes greater than the value of the home?
The Home Equity Conversion Mortgage (HECM) is a non-recourse loan, which means that the borrower can never owe more than what the house is worth. As HECM borrowers, your parents pay a mortgage insurance premium to the U.S. Department of Housing and Urban Development (HUD). They, in turn, guarantee that the borrower will never owe more than the value of their home when the loan becomes due and payable.
8. What are the risks my parents would be taking in receiving a reverse mortgage?
A reverse mortgage doesn’t affect regular Social Security or Medicare benefits.To find out if it impacts other federal or state assistance or medical programs,contact your reverse mortgage lender, tax attorney, or counseling agency.
9. Are there restrictions on how my parents spend their money?
Your parents can spend their money any way they want. Borrowers have used reverse mortgages to pay for grandchildren’s educations, vacations,new cars, home improvements or to eliminate debts. The money can be used forany thing they desire.
10. Is there any information that provides what all of the fees will be?
The lender is required to provide your parents with the Total Annual Loan Cost, or “TALC” disclosure, which is required by the Federal Reserve Board.The TALC displays the total transaction costs over the projected life of the loan,which will allow your parents to see all costs related to the reverse mortgage.
While tapping into their equity, your parents’ home may be appreciating in value,which could allow for some equity left at the end of the loan. They are also able to live comfortably without having to depend upon family members to support them.
2. Will the bank take their home?
No, the bank will not take their home. Throughout the life of the reverse mortgage, your parents will continue to own their home and retain title.
3. How much money will they owe when the loan has to be repaid?
Your parents will owe the total amount borrowed, accrued mortgage insurance premiums, accumulated interest, servicing fees, and any other costs and fees financed through the loan amount.
4. When do my parents repay the loan?
There are three viable options for your parents. They can sell their home to repay the lender and collect the proceeds, choose to reimburse the lender directly from a personal account, or refinance the loan.
5. What happens to the equity if my parents or I decide to repay the loan by selling the house?
There are two options. Either your parents or the heirs can keep the home and pay the balance due on the reverse mortgage, or they can decide to sell the home and use the proceeds to pay off the reverse mortgage. Either way, the remaininge quity is retained by the owners or heirs.
6. What happens to my mom and dad’s house if they move into a senior care facility?
A reverse mortgage becomes due and payable when the last borrower moves out of his or her home permanently. For instance, moving into a senior care facility, selling the home, passing away or moving in with the children.
7. What happens if the loan balance becomes greater than the value of the home?
The Home Equity Conversion Mortgage (HECM) is a non-recourse loan, which means that the borrower can never owe more than what the house is worth. As HECM borrowers, your parents pay a mortgage insurance premium to the U.S. Department of Housing and Urban Development (HUD). They, in turn, guarantee that the borrower will never owe more than the value of their home when the loan becomes due and payable.
8. What are the risks my parents would be taking in receiving a reverse mortgage?
A reverse mortgage doesn’t affect regular Social Security or Medicare benefits.To find out if it impacts other federal or state assistance or medical programs,contact your reverse mortgage lender, tax attorney, or counseling agency.
9. Are there restrictions on how my parents spend their money?
Your parents can spend their money any way they want. Borrowers have used reverse mortgages to pay for grandchildren’s educations, vacations,new cars, home improvements or to eliminate debts. The money can be used forany thing they desire.
10. Is there any information that provides what all of the fees will be?
The lender is required to provide your parents with the Total Annual Loan Cost, or “TALC” disclosure, which is required by the Federal Reserve Board.The TALC displays the total transaction costs over the projected life of the loan,which will allow your parents to see all costs related to the reverse mortgage.
Valentine Parfait - Recipe
2 1-inch-thick angel food cake slices
3/4 cup fresh strawberries and/or raspberries
1 4-ounce container vanilla pudding
1/4 cup whipped cream or thawed frozen whipped dessert topping
1 drop red food coloring (optional)
1. Place the cake slices on a cutting board. Use a serrated knife to cut the cake into 1-inch cubes. Set aside.
2. If using strawberries, place them on the cutting board. Use a knife to remove the green stems. Slice the strawberries, cutting from top of each berry to the bottom. Set aside.
3. Put the vanilla pudding and whipped cream or topping in a small mixing bowl. Use a rubber scraper to gently stir the whipped cream into the pudding. If you like, stir in red food coloring.
4. Using 2 parfait or sundae glasses, place one-fourth of the cake cubes in the bottom of each glass. Add one-fourth of the berries to each glass. Top with one-fourth of the pudding mixture. Repeat the layers. Serve the parfaits immediately. Makes 2 parfaits.
3/4 cup fresh strawberries and/or raspberries
1 4-ounce container vanilla pudding
1/4 cup whipped cream or thawed frozen whipped dessert topping
1 drop red food coloring (optional)
1. Place the cake slices on a cutting board. Use a serrated knife to cut the cake into 1-inch cubes. Set aside.
2. If using strawberries, place them on the cutting board. Use a knife to remove the green stems. Slice the strawberries, cutting from top of each berry to the bottom. Set aside.
3. Put the vanilla pudding and whipped cream or topping in a small mixing bowl. Use a rubber scraper to gently stir the whipped cream into the pudding. If you like, stir in red food coloring.
4. Using 2 parfait or sundae glasses, place one-fourth of the cake cubes in the bottom of each glass. Add one-fourth of the berries to each glass. Top with one-fourth of the pudding mixture. Repeat the layers. Serve the parfaits immediately. Makes 2 parfaits.
Looking for Volunteer Opportunities?
Perhaps you are interested in volunteering for a charity or non-profit, but don't know where to start. The website www.volunteermatch.org was created to help you find different opportunities to volunteer in your community. You simply go to the website and put in your state, city and/or zip code and it will pull up volunteer opportunities within your community. VolunteerMatch has helped hundreds of thousands of people find rewarding volunteer positions.
Volunteering is fun and rewarding, it makes you feel like you are accomplishing something—that you are giving back to the community in which you live—that you are helping people. Volunteering also gives you the opportunity to meet people, make new friends and get out of the house. You can volunteer a day or two a week or in some cases even a few hours a day. Of course there are some seniors that volunteer every day.
But remember when you volunteer you should be prepared to help in any way the organization needs you. You don't necessarily get to choose the areas in which you will work or the time you can spend. Most seniors who volunteer have found volunteering to be very gratifying.
Volunteering is fun and rewarding, it makes you feel like you are accomplishing something—that you are giving back to the community in which you live—that you are helping people. Volunteering also gives you the opportunity to meet people, make new friends and get out of the house. You can volunteer a day or two a week or in some cases even a few hours a day. Of course there are some seniors that volunteer every day.
But remember when you volunteer you should be prepared to help in any way the organization needs you. You don't necessarily get to choose the areas in which you will work or the time you can spend. Most seniors who volunteer have found volunteering to be very gratifying.
Tuesday, February 17, 2009
Extra Help Program for Prescription Drug Costs
Are you eligible for Extra Help? Extra Help is a program for people on Medicare that have Medicare prescription drug coverage. The Low-Income Subsidy (LIS) Program/Extra Help, helps pay for Part D prescription drug costs including premiums, deductibles and prescription drug copayments. The program is for people with income (2009) of $16,245 or less for an individual or $21,855 or less for a married couple that is living together. There are some circumstances where you can still qualify if your annual income is higher. Resources (2009) cannot exceed $12,510 for an individual and $25,010 for a married couple that is living together. The good news is that some things such as your home or car do not count as resources.
To get further information or apply for Extra Help contact Social Security at 1-800-772-1213 (TTY 1-800-325-0778).
You may also apply online by completing Social Security’s Application for Help with Medicare Prescription Drug Plan Costs (Form SSA-1020) or visit your local Social Security Office.
This information is courtesy of Sharon Timko, president of Senior Independence, Inc. a nonprofit organization, dedicated to educating seniors, their families, and those that serve our older community. We provide information on programs, resources, and benefits that help our older community remain independent. For more information on our free class call 760-521-9033 or log onto: http://www.seniorindependencesandiego.com/.
To get further information or apply for Extra Help contact Social Security at 1-800-772-1213 (TTY 1-800-325-0778).
You may also apply online by completing Social Security’s Application for Help with Medicare Prescription Drug Plan Costs (Form SSA-1020) or visit your local Social Security Office.
This information is courtesy of Sharon Timko, president of Senior Independence, Inc. a nonprofit organization, dedicated to educating seniors, their families, and those that serve our older community. We provide information on programs, resources, and benefits that help our older community remain independent. For more information on our free class call 760-521-9033 or log onto: http://www.seniorindependencesandiego.com/.
Monday, February 16, 2009
Exercise Tips for Seniors to Start a Healthy 2009
If you're an older adult, the International Council on Active Aging (ICAA) has some tips for seniors to get started exercising and keep them at the top of their game:
Get a checkup. Talk with your doctor about getting clearance to begin a fitness program and making any modifications to suit your situation.
Know your options. Before starting, pick a program you'll enjoy, so you'll do it regularly. Some people, for example, like to go to a gym for structured workouts, while others might prefer a more informal neighborhood walking club.
Determine your participation style. Choose what's best for you -- a class or going solo? Morning or night hours? Indoor or outside exercise?
Start slowly. Most people are overeager and sometimes overdo it. Record a baseline of your regular activities and determine a reasonable schedule.
Make a date. Find a buddy to exercise with you and keep you motivated.
Set specific short- and long-term goals. Plan for activity in your day and make it a priority.
Make a list. Try to make the benefits about things you can control, rather than an outcome (such as weight). Looking to decrease stress and depression, build stronger bones or greater strength, get better sleep? Remind yourself what your goals are.
If it hurts, don't do it. Learn to work around pain, not through it. And once you've reached your goal, treat yourself for the good job you've done, so it will encourage you to continue.
Information provided by: MedicineNet.com
Get a checkup. Talk with your doctor about getting clearance to begin a fitness program and making any modifications to suit your situation.
Know your options. Before starting, pick a program you'll enjoy, so you'll do it regularly. Some people, for example, like to go to a gym for structured workouts, while others might prefer a more informal neighborhood walking club.
Determine your participation style. Choose what's best for you -- a class or going solo? Morning or night hours? Indoor or outside exercise?
Start slowly. Most people are overeager and sometimes overdo it. Record a baseline of your regular activities and determine a reasonable schedule.
Make a date. Find a buddy to exercise with you and keep you motivated.
Set specific short- and long-term goals. Plan for activity in your day and make it a priority.
Make a list. Try to make the benefits about things you can control, rather than an outcome (such as weight). Looking to decrease stress and depression, build stronger bones or greater strength, get better sleep? Remind yourself what your goals are.
If it hurts, don't do it. Learn to work around pain, not through it. And once you've reached your goal, treat yourself for the good job you've done, so it will encourage you to continue.
Information provided by: MedicineNet.com
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