Colorado Reverse Mortgage near Longmont CO
Colorado Reverse Mortgage near Longmont CO Gives Solid Advice For
A scenario for a Colorado Reverse Mortgage near Longmont CO…
Mace, My husband and I owned our home for 26 years. He died in August two years ago. I love my home but found that the upkeep was more than I can handle. I’ve decided to sell the home to move closer to my daughter and her husband. My agent said that it should sell quickly in my area and that I’m going to clear around $390,000. I’ll be able to buy a modern and more efficient home near the kids with the cash and still have $40,000 leftover that I’ll save in the bank.
My monthly income is adequate for my needs, so I don’t need a Reverse Mortgage to give me income. I know $40,000 is a lot of money, but I also know that life has its challenges and expenses pop up. How long do I need to live in my new home before I can get a Reverse Mortgage?
Sincerely, Joanna J.
The advice…
Joanna, while losing a spouse or any loved one is difficult, I’m glad that you’re taking care of yourself. Moving from your home sounds like it will be the right decision for you. It’ll be a daunting task but I suspect that your children will be a huge help with your transition. As the owner of Colorado Reverse Mortgage (near Longmont CO), I found your letter very interesting and look forward to expand upon it and have a bit to share. Of course, I’ll address how long do you need to live in your new home before acquiring a Reverse Mortgage. Part 1 answers your question; Part 2 is my recommendation.
Part 1
To answer your question directly, there is no required amount of time that you must live in your home before getting a Reverse Mortgage. If you apply within one year of your new purchase, the Principal Limit will be based on the lesser of the sales price or the appraised value.
Over the years, I’ve had a few transactions where a client got a property significantly under the appraised value. In these situations, it made sense to wait for one year to pass before applying for a Reverse Mortgage in order to take advantage of the higher appraised value.
Part 2
Another option that many are not aware of is rather than buying the house first and then getting your RM later… Why not buy the house USING a Colorado Reverse Mortgage product? By doing this, you’ll avoid two sets of Closing Costs.
If this option is attractive to you, then you will need to make a choice.
- Either buy the home with a Reverse Mortgage and bring to closing the entire $350,000 of the sales price. You’ll effectively have a Reverse Mortgage with a very small balance (maybe even $100?). This large Line of Credit will actually grow a little bigger each month. The Line of Credit will be the nest-egg that you were looking to have for your security. This published article was written many years ago. The numbers are no longer valid but the concept discussed is still rock solid. Check it out!
- Or, buy the home with a Reverse Mortgage, but instead of coming to the table with $350,000 like in the first option, you’ll come in with a smaller amount. You didn’t mention your age, so I’ll assume you’re 72 years old in this example. Here you’ll come in with your down payment of $164,000 (plus the closing costs) to close on the transaction. The difference (about $176,000? it depends on how your Purchase Contract is written) between that number and the $350,000 remains with you in your bank account.
In either case, you’re establishing a Reverse Mortgage at the same time you’re buying the new home. Your liquid $40,000 nest egg will now easily exceed $200,000!
Colorado Reverse Mortgage
We are more than just a Reverse Mortgage company and feel it’s important to look at and address a bigger picture. We discuss Reverse Mortgages (of course) but will be happy to share our knowledge and input on a variety of “senior-centric” topics. Mace visits about the importance of Retirement Planning, Estates and Trusts, Social Security, Home Safety, Power of Attorney documents, Senior Abuse (financial, physical and mental), and many other areas. Remember, we’re not just a reverse mortgage company, we’re your neighbors.
Use this Reverse Mortgage calculator. This is a safe site and the calculator will give you a rough estimate. However, an experienced Certified Reverse Mortgage Professional will not only be more accurate but will also know ways to maximize the benefit to a consumer and will do a better job than a generic calculator.