Seniors and Real Estate

The life changes that come with aging can be overwhelming for some Seniors. Health and finances play a role in many parts of a Senior’s life, including the place they call home.

For some, the stairs in a two-story house they bought when their children were young become a tiring nuisance. Others find themselves struggling to make the mortgage payments with a retired person’s income. In the past, Seniors could sell their houses to downsize, upsize or move into assisted living facilities or with family. However, the state of the current housing market has eliminated that as an option for some.

“In today’s market if they can wait, they should,” said Ron Starling of American First Mortgage.

An alternative option for Seniors is a reverse mortgage. This is a loan against your home that you do not have to repay as long as you live in the home. Reverse mortgages are regulated by the federal government and are reserved for people 62 and older. The main benefit of a reverse mortgage is that people can remain in their home and get money out of their house in a lump sum or in payments to spend as they choose, such as helping with living expenses.

With a reverse mortgage an appraisal is done on the house to determine its value. Then the homeowner can receive a line of credit or a lump sum for the value of the house minus closing costs and the amount, if any, that is owed on the previous mortgage. A third option is to receive monthly payments based on the homeowner’s age. The older the person, the higher the monthly payment they receive.

Starling said people who currently have mortgages on their homes are still eligible for a reverse mortgage. Although mobile homes are not eligible, condos, town homes, some manufactured homes and duplexes are eligible as long as the owner is living in the home. There are no income or health requirements for a reverse mortgage, and there are minimal credit verification requirements.

Starling said the benefit he offers to Seniors is that he is a Senior himself and can therefore identify with their needs.

“Not everyone sells for the same reason,” Starling said.

The 66-year-old is a certified Senior Real Estate Specialist who was trained to meet the specific needs of Seniors. He maintains his real estate license, but went inactive because he feels he can better help Seniors by introducing them to reverse mortgages.

“I get a lot of satisfaction out of helping people who didn’t have the money before,” Starling said.

Starling said there are some videos available about reverse mortgages. But he finds that the subject can be confusing to learn through a video, which is why he makes house calls and meets with people face to face.

“We also encourage the family to get involved,” Starling said.

He said family members are sometimes concerned with their inheritance. But many times the family members are too much in debt to help their aging parents financially, so it leaves Seniors with little choice.

The reverse mortgage lets Seniors get the equity out of their home through a loan that does not have to be repaid until after both homeowners die or move out of the home. So if one spouse dies, the other will not be kicked out onto the street. And when both pass away, their heirs will have nine months to pay back the mortgage, sell the home or relinquish it to the bank, Starling said.

Starling said some argue that it costs too much to get a reverse mortgage because the closing costs are higher than those of just selling the house. However, the closing costs of selling one house and buying another are about equal to those of the reverse mortgage.

Another category of people who get a reverse mortgage are those who are financially stable and would like to invest the money they get from the mortgage to have a cushion in case something happens. Because there are no limitations on what the homeowner can do with the money, Starling said this is one of the smartest options people choose. Still others use the money to remodel the house so they can sell it when the market picks back up.
Starling said reverse mortgages are not for everyone. People who cannot live in the house any longer because of physical limitations should go ahead and sell, he said. The key is educating Seniors to make the best possible decision.

“We’re conditioned to think everything’s a scam,” said Shirley Bloodworth, director of the PrimeTime Institute. PrimeTime offers classes and seminars for Seniors through Santa Fe Community College.

Starling agrees that there are a lot of people taking advantage of Seniors. However, because the federal government regulates reverse mortgages, he assures Seniors they are safe.

To find a Senior Real Estate Specialist click here: http://www.seniorsrealestate.com/ 

Starling will be at Santa Fe Community College on Feb. 21 at 3 p.m. to talk with Seniors through the PrimeTime Institute about local real estate concerns and the option of reverse mortgages.

For more information:
Contact Shirley Bloodworth or Ron Starling