Paul Martin from Security Title Guarantee has once again provided great information for us on Reverse Mortgages. His first article, Take a Stand for Reverse Mortgages, appeared last month.

Here is the second article in his series of three. Thank you Paul!

Hope you didn’t get tired of standing during the last blog, but I wanted you to experience and personalize the value that a reverse mortgage can provide to a senior.

Today, we take a quick look at the “Nevers” of a reverse mortgage. They are:

Never Make a Payment

Borrowers can make payments if they choose, but that defeats the purpose of a reverse mortgage to tap in their home equity without having to make monthly payments. Any payment made increases the line of credit available. We will take a look at the line of credit increase and how a senior could use this to their advantage in the next blog.

Never Give up Title

“Doesn’t the bank get the house?” is a common misconception to almost everyone who considers a reverse mortgage as an option for tapping into home equity. There is the assumption that seniors sign over the Title to the lender when they close. When seniors do use a reverse mortgage to draw out equity, a lien is placed in the form of a Deed that is recorded at the county in which they live just like any other mortgage. BUT the homeowner is still the homeowner!! There is NOT a transfer of ownership since a senior still remains the Title holder.

Never owe more than the Home is Worth or Pass Debt on to the Children

I heard it just the other day. An adult child was very concerned that they would be held responsible for debt beyond the value of the home at the eventual time that their parent was no longer living in the home. Her fears were calmed when she could see in the Deed that there are NO deficiency judgements. The collateral for the loan is the home, therefore no personal liability. Even if there is a shortfall from the price the property is sold verses the balance of the loan, the debt cannot be passed on to the borrower or the estate. Most reverse mortgages are Federal Housing Administration (FHA) Home Equity Conversion Mortgages (HECM) loans. Borrowers pay an up front mortgage insurance premium and a percentage built into the interest rate to FHA for the insurance. It protects them, their heirs and the lender.

Next time…The value of the line of credit and other options for taking loan proceeds.

Paul Martin
Business Development Manager
Security Title Reverse Mortgage Division
303–889–8104
pmartin@stgco.com

Share This

Yesterday my friend Gail and I went to see “The Bucket List”. I laughed and cried. We all have our bucket list even as young people. Some want to get married and have children and others want to make a million and travel the globe. When I got home,  I started my bucket list. I have lots of places I’d like to visit during my lifetime. If Colorado is listed as one of your destinations not to miss, you may want to check it off by visiting in 2008 or 2009. The only problem is going to be how to narrow down where to visit during your time here. So, I’ve broken it down by seasons with a few suggestions.

Winter– What comes to mind? Probably skiing. There are 26 ski resorts in Colorado from tiny Ski Cooper, where my son learned to ski, to the grand daddy Vail with almost 5,300 ski-able acres. If you aren’t a skier, try dog-sledding, ice skating, snowshoeing or another winter sport. If you are a cowboy or girl at heart, the National Western Stock Show is a Denver highlight during January. I’ve never seen so many kinds of chickens and rabbits. Who knew? Frisco’s Gold Rush is in early February and Steamboat has the Annual Winter Carnival in its 94th year.

 

Spring– You’ll find many a die hard rafter in one of our many rivers across the state. While the ride may require a wet suit, the water is the highest at this time of year. Spring skiing is usually great. While the snow may be a little mushy, lots of people ski in shorts. Fruita has the Fat Tire Festival and Mike the Headless Chicken Days, the Grand Valley has Spring Barrel Tasting and Salida and Buena Vista sponsor the National River Cleanup Greenup. Creede has the Silver Chef Competition at the Taste of Creede. If you love jazz, the Estes Park Jazz Fest and Grand Junction Art and Jazz Festival are both in May.

 

Summer– Late June and early July feature amazing wildflowers in the high country. I love to visit Yankee Boy Basin with my camera and brown bag lunch. I can spend all day enjoying the outdoors and amazing views of Colorado. For those bike riders, amazing riding places are available throughout the state. Many of the best ski areas in winter, become wonderful hosts for mountain biking activities. Ride the lift to the top and work your way down the trail on your favorite bike. Buena Vista has the BalloonaVista, Fort Collins hosts the Colorado Brewer’s Festival now in its 18th year and Frisco will make your mouth water with the Colorado BBQ Challenge. You’ll enjoy Music in the Mountains in Durango and the Hot Air Balloon Rodeo in Steamboat Springs.

 

Fall– Fall in Colorado makes me think of all the wonderful fall colors. There are special drives you can take to see some of the most amazing colors in nature. Estes Park has the Scottish and Irish Highlands Festival, Delta hosts the Blues Festival and Grand Junction has the 16th Annual Colorado Mountain Winefest. Glenwood Springs invites you to the 8th Annual Historic Ghost Walk at the Linwood Cemetery and Creede will tempt you with its Chocolate Tasting Festival. Denver sponsors the International Wine Festival and Taste of Colorado. There is never enough wine or chocolate!

 

I’m tired just thinking of all the great Colorado activities and I’ve only just scratched the surface. This doesn’t include the amazing hiking trails, the fourteeners just waiting to be climbed, fantastic museums, national parks and shopping, shopping, shopping. Anytime of year is a great time to visit. And…if you decide to stay, give me a call and let’s chat.

Other Resources:

Colorado Tourism Office
Denver Metro Convention and Visitors Bureau

Share This

President Bush signed the Economic Stimulus package on Wednesday and the impact for Colorado is yet to be determined. At this time it looks like Boulder may be the only area with a median home price high enough to gain an increase from the current $417,000 limit.

1. Loan limits will go up in metropolitan areas with high housing prices. Most experts are estimating that will occur in only 20 of 160 metropolitan areas.

2. The higher loan limits expire at end of the year. With HUD having 30 days to establish where the increase in loan limits will occur, it will be the middle of March before this is set. That will give borrowers about nine months if Fannie Mae and Freddie Mac have a process in place to purchase those loans.

3. The increase in the FHA loan limits may or may not reach our area.

It’s yet to be seen whether or not more borrowers in Colorado will see more of a benefit than the rebate checks. I’ll keep you posted.

For further thoughts and comments from bloggers, visit:

Business Week

Bloodhound Blog

Share This

We still have a few weeks of winter left and if the occasional snowflakes happen to fall when you least expect them, you may want to consider taking one of the wonderful free tours available in the Denver area. Here are just a few suggestions.

I toured the State Capitol and the Mint when I was a child. I look forward to going back. I remember being fascinated, especially by how money is made.

These are all wonderful places to visit on a snowy day, or any other day in fact.

Happy touring!

Share This