1. Save your home if you are experiencing financial difficulty and are in danger of a foreclosure.

A reverse mortgage may provide you the cash you need in order to pay off your mortgage completely and avoid your lender foreclosing on you.  There are little or no income or credit qualifications with a reverse mortgage, so, you can qualify despite the credit difficulties.

2.  Providing a monthly cash flow for yourself.

One of the best uses of a reverse mortgage for seniors over 62 is that it can enables you to supplement your retirement income.  Because Social Security and other retirement benefits may be subject to what happens in the market place, a reverse mortgage can provide payments or lump sum amounts to help supplement your income when you need it.  This will help you maintain your financial independence as long as there are funds available in your reverse mortgage.

3.  Pay off your existing debts.

Obtaining a reverse mortgage can enable you to withdraw money and use it immediately for whatever purposes you want.  You decide how you want to have access to your money - as lump sum, monthly checks, or some other combination that will suit your financial needs.  If you have current debts, a reverse mortgage can be the perfect way to pay off those bills and get out of debt.

4. Set aside funds for future medical needs.

Probably the greatest concern of seniors is that there may not be adequate money to meet your medical expenses as you grow older.  A shortage of cash at the appropriate time can bring about the loss of the home and any investment you might have had and wanted to pass on to your heirs.

A reverse mortgage loan makes money available and can relieve family and relatives of future financial obligations in medical care - as long as there is still money available.  Because you do not need to make monthly payments on the loan, this enables available money to be used as needed without having to worry about your home.  The reverse mortgage is repaid when the home is no longer the primary residence for the senior.

5.  Protect your current assets.

Reverse mortgages can be just the financial tool you need to protect your assets.  Money can be used any way you choose - including paying off monthly bills, eliminating your current mortgage or to make home repairs and improvements.  It is also a great alternative to drawing down other retirement assets.  As always, we suggest our clients consult with their financial advisor for more information.

Reverse mortgages can be obtained regardless of income level - as long as you own the home and reside in the property as your primary residence and have some home equity and are 62 years of age or older you are a candidate for a reverse mortgage.  The funds are available to you tax-free (consult your tax advisor), and the reverse mortgage does not become due and payable until you no longer live in the home (provided you continue paying your property taxes and homeowner's insurance).  You retain full ownership of your home during the life of the loan.  Could there possibly be a better retirement planning tool?

TESTIMONIALS from Seniors just like you!

"My husband and I have worked hard all our lives. But like many small business owners we had our good years and bad.  We used the equity in our home to get us through the down years, and, after finally selling the business at age 71, I was updating my resume so we could afford to pay the $1,400 monthly mortgage payment.  Our reverse mortgage was just enough to cover the balance on our mortgage, but now I am looking to go back to work because I want to, not because I have to."

L.M.; Denver, CO

"I have a comfortable life, I own my home, I have friends and family and my day-to-day needs are met.  But at 82 years old I would go to bed every night worrying that if my family or I had any urgent needs, I would not have the money I would need.  Well, I have only used $3,000 of the $133,000 in my reverse mortgage line of credit, but I have never slept so well in my life."

J.J.; Broomfield, CO

"My husband died, I was three months behind on both my mortgage and my car lease, I was behind on my property taxes, the Homeowners' Association had placed a lien on my home, and my phone had been disconnected.  The reverse mortgage did not just save my home, it saved my life."

G.H.; Surprise, AZ

"When I received the notice in the mail that due to an escrow shortage and an increase in my property taxes my house payment was increasing $200 per month, I felt I had no option but to sell my home.  When you told me I could keep my home, have no mortgage payment, and receive monthly income I couldn't believe it.  My only regret is that it took until I was 78 to start enjoying my retirement."

W.T.; Littleton, CO

"Mr. R., age 69, is a single grandfather raising his two grandchildren, one of whom is handicapped.  He was working 50 hours a week still making a mortgage payment and two car payments; one of which was quite large due to the expense of having to retrofit a van to accommodate his grandson's handicap.  At the closing of his reverse mortgage we were able to pay off his mortgage and both car loans and provide a line of credit as a safety net for future unexpected expenses.  This cut the family's monthly expenses in half."

W.R.; Denver, CO

"We all knew that mom's mind was quickly slipping, and we knew as a family we were facing some tough decisions.  My sister lives hundreds of miles from mom, and I am thousands.  We were all very clear on mom's desire to live out her life at home.  The reverse mortgage was the answer to our prayers.  With the proceeds from the reverse mortgage we were able to provide 24/7 care for mom in her own home.  We not only knew mom's wishes were being fulfilled, but we knew she had good care without creating a financial hardship for the family.  This is truly one of the legitimately good government programs."

S.D.; Landcaster, CA

Contact Us for More Information

Customers Love Their Reverse Mortgages, According to Recent Study

Reverse mortgages have been the target of a lot of bad publicity of late, much of it concluding that such loans are dangerous, expensive and generally poor choices.  But new research shows that the folks who have used the loans are overwhelmingly happy with their decisions.

Indeed, the study by Marttila Strategies, Boston, found that seniors with loans that pay them instead of the other way around give the financial product "exceptionally high" marks.

Presented with a 10-point scale, with 10 representing the maximum level of satisfaction, 43% of the respondents gave their mortgages the highest rating possible - 10.  And 32% more graded their loans at between six and nine.  That adds up to a 75% vote of confidence.

Moreover, more than half would "definitely" recommend a reverse mortgage to another family member or friend, and 28% more would "probably" do so.  Only 15% probably and definitely wouldn't recommend the loan.

Yes, the National Reverse Mortgage Lenders Association commissioned the study.  But John Marttila, a highly respected analyst who has conducted research for numerous clients on such topics as national security, health care and foreign policy, says that seldom do respondents give a topic or product such a strong vote of confidence.  "Rarely does a research program provide such decisive results as this one has." Marttila says. "These attitudes belie the negative accounts that have been widely reported in the media."

Marttila Strategies late last year conducted six focus groups and three national research surveys.  The research targeted three demographic cohorts - elder owners who have had reverse loans for at least two years, senior homeowners who owe less than 50% of their home's equity but do not hold reverse mortgages, and adults with at least one surviving parent who indicated that their parents' mortgage balance was less that half what the house was worth.

Apart from giving the product itself superb grades, seniors were "unmistakably emphatic" that they were not misled, according to Marttila.  Nine of 10 current reverse mortgage borrowers said they were not pressured to take out the loan.  Unfortunately, 9% said they were pushed, which is too many.

Furthermore, 75% said they understood what they were doing either "well" or "very well" and 77% received professional counseling before deciding to move forward with a reverse mortgage.  Among that latter group, 86% found the counseling useful.  This is another point the critics tend to overlook.  Counseling with a HUD-approved counseling agency is mandatory.  The counseling isn't gratis, but the charge usually isn't collected until closing.

Critics argue that seniors who take out reverse mortgages will not be able to leave their family homes to their heirs when they die.  But research has found that less than half still live in the same place where they raised their kids.  What's more, most seniors don't care about bequeathing their homes to their children.  And neither do their kids.  Most of those queried (with and without a reverse loan) believe the best financial strategy for their remaining years is to pay their own bills so their children won't have to worry about them.  And nearly 90% of the adult children with a living parent said mom and dad should take care of themselves and not worry about leaving an inheritance.

At the same time, nearly half of the seniors questioned who have a reverse mortgage said they would struggle to meet their monthly expenses without their loans.  Indeed, many - 38% of those with a  reverse loan and 49% of those without - worry that they will not have enough money to lead the kind of life they want going forward.  Additionally, a good share (44% with a reverse mortgage and 17% without one) fear that, without supplemental income, they will have to leave their home.

Finally, for what it's worth, a recent Wells Fargo/Gallup Poll found that at least one-third of investors who have yet to retire expect to rely on their home's equity as a source of income when they decide to retire from the workforce.

PURCHASING A HOME:

• Why would a senior, 62 years of age or older, want to use a reverse mortgage to purchase a home? - To RELOCATE for the following reasons:
  • Seniors are in need of a home with fewer stairs and less maintenance.
  • The current home is too large following the departure of their children or the death of a spouse.
  • The senior would like to relocate to a home closer to work or other family members.
  • The senior wants to relocate to a different climate.

• What is the benefit of using a reverse mortgage to purchase a home?
  • There are little or NO income or credit qualifications.
  • There are NO monthly mortgage payments for the life of the loan so there is no risk of losing one's home due to the inability to make a mortgage payment.
    • Borrowers are required to pay property taxes and insurance.

• What is required to qualify:
  • All borrowers must be 62 years or older.
  • The home they are purchasing must be the primary residence.
  • The home must meet standard appraisal guidelines.

• What is the first step?
  • Get PREQUALIFIED
  • Call us at 1-800-325-2062 or use our online contact form.
    • Cherry Creek Mortgage, through its reverse mortgage division, 1^st Reverse Mortgage USA, is recognized regionally and nationally as an expert in reverse mortgage lending and is among an elite group of lenders who are authorized by HUD to underwrite, close and fund Reverse Mortgages.

• A real life example of how a reverse mortgage for purchase can make a difference in the life of a senior:

"His doctor told him he needed to move.  Between the stairs in his home and the yard maintenance, at his age and with his health, it was not the right living environment for him.  From the sale of his home we expected to net approximately $185,000 which was far less than the $300,000 purchase price of the ranch patio home he wanted to purchase.  By using a reverse mortgage he was able to purchase this home, keep $42,000 of the proceeds from the sale of his home in the bank, and he will have no mortgage payments for as long as he lives in the home.  After the closing he told me, "I'm not so sure I could explain to someone else exactly how this all worked, but I am one happy camper."

Re/Max Agent, Littleton, CO

ADVANTAGES AND DISADVANTAGES OF A REVERSE MORTGAGE:

For many people, a reverse mortgage is a good way to increase their income in retirement - positively affecting their quality of life.

Advantages of a Reverse Mortgage

The main advantage of reverse mortgages is that they are an extremely flexible financial planning product with very few - if any - restrictions on how you receive and use the money.

To many people, a reverse mortgage simply sounds too good to be true.  But, there really are no catches.  Given the right set of circumstances, a reverse mortgage can be an ideal way to increase your spending power in retirement.

Key advantages and benefits of reverse mortgages include:

• No risk of default:
  • Unlike a home equity loan, as long as you pay your taxes and insurance and maintain your property, your home can not be taken from you for reasons of non-payment (because there are no monthly mortgage payments required!).  If you default on your home equity loan, you could lose your home.
  • Reverse mortgage lenders have no claim on your income or other assets. Your property is the sole collateral on the reverse mortgage.

• No downside: With a reverse mortgage you will never owe more than your home's value at the time the loan is repaid, even if the reverse mortgage loan balance is greater than the value of the home.  This is a particularly interesting advantage if you secure a reverse mortgage and then home prices decline.

• Tax-free: The money from a reverse mortgage is typically tax free, since funds received are considered proceeds from a loan (please consult your tax advisor).

• No Restrictions on Use of Funds: How you use the funds from a reverse Mortgage is not restricted - go traveling, get a hearing aid, purchase long-term care insurance, pay for your grandchildren's college education - anything goes.

• Flexible Payment Options: You can receive the reverse mortgage funds in the form of a lump sum, a monthly check, credit line or a combination of the above.

• Easy Pre-Qualification: There are little or no income or credit qualifications for a reverse mortgage.

• Home Ownership: With a reverse mortgage, you retain home ownership and the ability to live in your home for as long as you choose.

• Federally Insured: The Home Equity Conversion Mortgage (HECM) is the most widely available reverse mortgage.  It is managed by the Department of Housing and Urban Development and is FHA-insured.  This is an important feature, as you will continue to enjoy the benefits of your reverse mortgage even if your reverse mortgage lender defaults on their obligations.

Disadvantages of a Reverse Mortgage:

A reverse mortgage may not be for everyone.  Consider the following:

• Beware if you are eligible for low-income assistance: If you are currently or will be eligible to receive low-income assistance from the federal or state government (such as Medicaid), you will want ensure that the funds received from a reverse mortgage do not disqualify you from that assistance.  (NOTE: Social Security and Medicare are not impacted by a reverse mortgage.)

• Reconsider if you are planning to move in the near term: There are upfront closing costs involved (which are financed into the loan).  If you only plan to live in your home a short period of time, the expense might not be justified.  Also, keep in mind that a reverse mortgage loan is due if your home is no longer your primary residence.

• Evaluate if you are willing to reduce your heirs' inheritance: Many people dismiss a reverse mortgage as a retirement option because they want to be sure their home goes to their heirs.  A reverse mortgage decreases your home's equity - affecting your estate.  However, you can still leave your home to your heirs and they will have the option of keeping the home and refinancing or paying off the mortgage or selling the home.  Any remaining equity stays with you or your heirs.  There are numerous potential estate and retirement planning benefits to a reverse mortgage - see "6 Ways to Use a Reverse Mortgage As a Financial Tool" for more information on these options.