Bainbridge Island loan officer says reverse mortgages can be a great option for seniors wanting to increase income and/or decrease expenses without having to deplete other assets.
With market volatility causing savings to shrink, plus the increase in normal monthly living expenses, many retirees are feeling concerned that they may not have saved enough for a comfortable retirement.
“It’s stressful to watch retirement accounts drop in value and see financial concerns arise. When this happens, many seniors believe their only option to reduce expenses is to sell their home and move into a smaller house or apartment. However, with the substantial increase in home prices, higher rents and low inventory, downsizing doesn’t offer the same relief that it once did,” says Kay Johnson, a reverse mortgage loan specialist at Bainbridge Lending Group.
“I want senior homeowners, financial advisors, elder and family law attorneys, real estate brokers and other professionals to know there is another option, and it’s helping many retirees find relief. During the past five years serving seniors in my community, it’s been extremely rewarding for me to see the real life benefits and peace-of-mind that comes with alleviating the stress caused by financial uncertainty.”
How can a reverse mortgage help?
A reverse mortgage can be an extremely beneficial tool in your financial portfolio. Most reverse mortgage products in Washington State require a minimum age of 62 (the age requirement for the youngest borrower). However, there are proprietary products from some reverse lenders on jumbo loans (those over FHA’s maximum claim amount of $970,800) available to homeowners beginning at age 60.
A reverse mortgage can be beneficial in several ways. It can pay off your existing mortgage (if you have one) and eliminate your current monthly mortgage payment. The new reverse mortgage does not require you to make a monthly payment (although you can make optional payments if you like).
You are required to maintain the property and continue to keep current on your property taxes, homeowner’s insurance and monthly homeowner’s association dues if applicable. The elimination of a monthly mortgage payment in itself can be a significant monthly savings to most seniors. The reverse mortgage does eventually need to be paid back and it becomes due and payable when the borrower either sells the home, no longer uses the home as their primary residence or passes away.
In addition to paying off an existing mortgage, reverse mortgages enable homeowners to access their equity to supplement income, pay off other debts, age-in-place, help with long term care needs, travel, start a business or even possibly purchase a vacation home.
“I’m happy to discuss reverse mortgage options and be a local resource for anyone who has questions. Additionally, I offer complimentary reverse scenarios to determine whether a reverse mortgage even makes sense for your unique situation,” Johnson says.
How much can you borrow using a reverse mortgage?
“With home values appreciating at an unprecedented level, homeowners now have access to more home equity than ever,” Johnson says. The amount a homeowner can borrow utilizing a reverse mortgage depends on several factors including the age of the youngest borrower, the home’s value, the balance of any mortgage liens and the property location.
What are the next steps?
Reach out to a local reverse mortgage loan specialist to discuss your current financial needs and goals and evaluate if a reverse mortgage even makes sense for you.
“Reverse mortgages are specialized, so it’s important you get good advice. I take the time to walk through the process with my clients to ensure they really understand their options. I also encourage my clients to include their financial advisor or a trusted family member or friend in the process as well,” Johnson says.
There are regulations and protections in place for reverse mortgages and there are many misconceptions about these loan programs. A lot has changed since these loans were introduced nearly 50 years ago. There is also a perception that reverse mortgages are expensive. Like forward mortgages, there are closing costs involved and mortgage insurance is required on some of the reverse loan programs, but there are ways to mitigate some of these costs with the right lender and product.
Complimentary loan consultations
Kay Johnson is licensed to offer reverse mortgages on primary residences throughout Washington State, but specializes in helping her neighbors in Kitsap, Jefferson and King counties. She offers free, no obligation consultations to assess whether a reverse mortgage is right for you.
Reverse mortgages are more popular than people think. Check out Johnson’s website at www.EquityforRetirement.com and see how many homeowners currently have a reverse mortgage. To request a reverse mortgage quote or schedule a free consultation, call Kay Johnson at 206-451-4024 or email Kay@BLGLoans.com.
Let’s have a conversation.