In Composing a Further Life, cultural anthropologist and author Mary Catherine Bateson (daughter of Margaret Mead and Gregory Bateson) discusses how a group of women over 60 — who all came of age in the ’60s — formed a collective to determine how their formidable combined experience, wisdom and activism could benefit their grandchildren and all future generations.

The group created GrannyVoter.org as a way to influence the long-term effects of political decisions, and ultimately, the kind of world our descendants will inherit.

While they didn’t discuss reverse mortgages, it’s easy to see how a reverse mortgage might help fulfill such a long-range vision: by freeing up resources concerned grandparents can put to use now to create a sustainable future for everyone. Bateson refers to this informed service as “active wisdom,” and describes today’s 60+ women and men as ideally suited for it: healthier, better educated, and more civically involved than any previous generation.

On GrannyVoter.org, she writes, “American grandparents have unparalleled political power, for they are part of the most sought-after voter demographic in American politics — the 55 plus voter.

“We want to inform, inspire, and engage grandparents so that they vote for sustainable policies protecting the quality of their grandchildren’s lives decades into the future and the stability of the America they will inhabit.”

Contrary to past generations or even prevailing belief, older voters are not focused on self interest, possibly because they have the financial resources through such means as reverse mortgage to allow them to lobby not primarily for their own needs, but for those who’ll follow. In the AARP 2004 New Hampshire Primary Survey of voters ages 55+, older voters said, “when it comes to issues considered very important in selecting a presidential candidate, strengthening the economy and creating jobs (79%) and improving education (61%), issues critical to America’s future generations, ranked higher than strengthening and preserving traditional Medicare (59%).”

With this endorsement in mind, we second the Beach Boys tune and say, “Go, granny, go granny, go granny go!” You’re clearly driven — to serve our future.

Are You a Player?

For nearly half a century, communities nationwide have joined in an annual May celebration of Older Americans Month. First created by the Administration on Aging in 1963, it’s an opportunity to recognize and honor the many ways mature adults have contributed and continue to contribute to their communities and to the larger society of which they’re a part. This month’s theme is, “Never Too Old to Play!” And it’s apt on a number of levels.

How does play figure in your life? Do you share your wisdom, experience and knowledge with younger generations? A reverse mortgage may be a key way to help you do so, by freeing up the resources you need to reduce or remove concern about finances, so you can focus your attention and action on what you love best. That might be your grandchildren, travel, a hobby — or even starting a new, later life career, as many of the seniors profiled in Mary Catherine Bateson’s book, Composing a Further Life have done.

We’re continuing to redefine what “old” means. Whereas once people were considered old at 40, today that’s barely middle aged! And while 65 was introduced as retirement age because people weren’t expected to live much beyond it, today’s seniors are, collectively, hale, hearty and rarin’ to go at this comparatively youthful “Third Stage” of life.

So celebrate yourself and your many accomplishments this month, by giving yourself a gift: explore how your home could become a source of income to enrich your next decades in ways you may have dreamed of for years. Reverse mortgage, which was first offered around the same time that Older Americans Month was inaugurated, might be just the age-old wisdom needed to free up your play time now.

Healthy Brain, Healthy Aging

Having trouble sleeping? You may need to get your creative juices flowing!

That’s the word from brain researchers, who have discovered that sleep disruption, long considered to be an inevitable part of growing older, is more often an effect of illness or other physical issues, such as arthritis, or bladder or prostate problems, rather than the cause of declining health.

Gene Cohen, MD, PhD, author of The Creative Age: Awakening Human Potential in the Second Half of Life, reports, “Research suggests that some sleep and mood disorders can be reversed by challenging the brain and developing a sense of mastery in a given area. This only confirms the power of creative endeavor in the promotion of health for any of us at any age.”

So if you were thinking a reverse mortgage would enable you to spend more time rocking on the front porch, consider rocking your creativity instead. You’re in excellent company. Here are just some examples of later life creativity expressed, from Cohen’s book:

• Pianist Arthur Rubenstein made more than 200 recordings during his lifetime, was still performing at 88, and wrote his autobiography at age 92.
• Noah Webster published the American Dictionary of the English Language in 1828, at the age of 70.
• When Supreme Court justice Oliver Wendell Holmes retired at age 91 — after thirty years on the court — newly inaugurated president Franklin Roosevelt called upon him and found him reading Plato. When the President asked why, Holmes replied, “To improve my mind, Mr. President.”
• Bill Traylor, a folk artist born a slave in 1854, worked as a farmhand after his emancipation. At age 84, after his wife had died and his 20 children had gone their separate ways, he began to draw, despite his arthritis. His work was eventually discovered, and he held his first art show at age 86. National recognition followed.

Reverse your thinking, and regenerate your body and mind so you can more fully enjoy the time and resources your reverse mortgage makes possible!

In Part 3, we’ll look at eight questions that can jump-start your creative energy.

This month the United States celebrates Mother’s Day, a holiday that was originally not a Hallmark occasion but a call for women to put an end to war. Poet, author and activist Julia Ward Howe (best known for penning The Battle Hymn of the Republic) first championed a Mother’s Peace Day in 1870. In her Mother’s Day Proclamation, she exhorted, “Arise, then, women of this day! Arise all women who have hearts…solemnly take counsel with each other as to the means
 whereby the great human family can live in peace…”

Women have made incredible strides since then, as the National Women’s Hall of Fame showcases. However, sometimes those closest to us are the ones in greatest need.

How is your own mother, or whoever holds this valued place in your life, faring in her later years? Does she have the resources to enjoy her maturity to its fullest? Does her present home serve her?

A reverse mortgage might be one solution to some of these pressing concerns. With the funds freed up from a reverse mortgage loan, Mom will be better equipped to “age in place” in security and comfort. And if her house needs to be modified to suit changing needs, she’ll have the resources to make those adaptations, so the home will continue to be safe and functional (see Age-Proofing Your Home).

If you’re planning ahead for your own elderhood, these same reverse mortgage and home safety suggestions apply. We want the best for you, Mom. Consider this a virtual bouquet of gratitude. Happy Mother’s Day!

Discovering Your Potential

Whether you’re considering a reverse mortgage to allow you the freedom to travel or simply to enjoy your golden years without financial worries, one of the great joys of the second half of life is embracing your creativity, whether for the first time, as in a creative urge long deferred, or in response to an inner calling to express awakened wisdom.

Consider Betty, age 87, who sports purple-streaked hair and a dry wit. After lovingly nursing her husband through a long illness, followed by a grieving period, she began sketching charcoal portraits of the hospice staff that cared for her beloved during his final weeks. They’re stunning creations rendered from photos, and while Betty takes great delight in her art, she chooses to create for love alone, offering her art as a gift rather than for payment.

What’s perhaps more astonishing is that Betty only discovered her artistic talent at age 70, when she enrolled with her daughter in an art class. Gene Cohen, MD, PhD, author of The Creative Age: Awakening Human Potential in the Second Half of Life and past president of the Gerontological Society of America, says this is not at all unusual: “Creativity is a powerful inner resource that is not only possible in later life, but common.”

He cites examples such as Charlotte, 76, a self-described “shrinking violet” who confronted her social fears following her retirement in her mid-sixties — and joined a community theatre. By her early seventies she was acting and singing publicly. Or Robert, 88, a retired government lawyer who took up photography and produced an extensive international photo series, traveling from Alaska to Tahiti.

Creativity needn’t take traditional art forms, either. A group called ElderWisdomCircle.org is a kind of “Dear Abby” for the mature years: more than 600 advisors aged 60-105 offer free online guidance to anyone who writes to them.

And of course there’s the venerable SCORE, which invites those “50 or better” to share their accrued business wisdom as mentors.

So once you’ve obtained your reverse mortgage, think about painting your house — on canvas. Or painting a new vision of life in your wisdom years.

In Part 2, we’ll explore how creativity actually contributes to healthy aging.

There may be more elders on the planet than ever before in history, but that doesn’t mean you feel your years! Many people are launching second careers, working productively well into their 60s, 70s, 80s and beyond, as well as traveling, enjoying their grandkids, and discovering a renewed interest in hobbies long laid aside, now that their time is their own.

All of which is fantastic. Yet even in good health, our bodies change with age, which means some aspects of day-to-day living might start to become more challenging with time. This is often why and when people consider moving into a retirement community.

What if you love your home and don’t want to move? Good news! There’s an easy way to maintain your independence and lifestyle without changing your address: adapt your existing home to meet your evolving needs.

Just as a reverse mortgage is only useful if you do it right, so that you save on closing costs (see Spring Cleaning the Reverse Mortgage Way/Part 1), your beloved home can be a different kind of “gold” in your golden years, if its design accommodates the inhabitants.

You can modify your home in order to age in place with ease and grace. If you chafe at this idea, think about this: life is full of “safety features”; we simply take most of them for granted.

Consider driving. Imagine how difficult it would be to drive with no traffic lights at busy intersections. Or as a pedestrian, trying to cross a major thoroughfare without a “Walk” sign. We obey traffic laws because they help keep us safe.

Also, think about how you were as a new parent: you probably took every precaution to “baby-proof” your home in order to avert a potentially disaster, such as an infant swallowing a button or a curious toddler sticking a finger into an electrical socket.

A few simple home modifications can make a big difference. These features, elements of what’s known as “universal design,” can affordably retrofit your home for greater safety and peace of mind:

• Grab bars, especially in the shower/bathtub
• Hand rails. People can slip at any age and take a bad tumble; as we age, this can result in a broken hip or worse.
• Ramps can be installed temporarily if someone needs to use a wheelchair for a short time
• Door widening to accommodate wheelchairs, walkers, four-pronged canes
• Low thresholds to avoid tripping, and to make it easier to navigate with assistive devices (walkers, canes, etc.)
• Kitchen and bathroom modifications to make cabinets easier to reach, floors less slippery.

Ask your reverse mortgage professional for a referral to a Certified Aging In Place Specialist (CAPS) who has been certified by the National Association of Home Builders. And ask yourself, “Is it worth a small investment now to prevent a possible fractured hip later?”

You may not need the home modifications today. Hopefully you won’t need them at all. But age-proofing your home is one of the easiest, most affordable steps you can take now to maintain your independent lifestyle without changing your address as you grow older.

It isn’t just for you, either. Not least among the peace of mind you’ll generate will be that of your kids, whom you once protected in the same way. They’ll sleep easier, knowing Mom and Dad are safe at home.

Cleaning. Few of us like to do it, yet we sometimes seem more willing to spiff up our houses for others than for ourselves. Housekeeper due to arrive? Quick, toss those dirty clothes in the hamper! In-laws invited for dinner? Polish the silver and run the vacuum!

Selling the house? Pull out all the stops. Take an old toothbrush to the grout! Replace the kitchen linoleum! Paint the exterior!

While it certainly makes sense for you to enjoy a clean, comfortable house while you own it — and to take all available measures to make it shine for a timely sale at the right price — too many seniors make the mistake of selling one home, then buying another and attempting to get a HECM (reverse mortgage) in order to avoid paying a mortgage in their retirement years. If you do it this way, you end up paying a completely unnecessary, double set of closing costs!

 The smart move? Get the reverse mortgage at the time of the new home purchase. This special “HECM for purchase” loan was created by the Housing and Economic Recovery Act of 2008, and became available to consumers on January 1, 2009. You can find all the details here.

 With a HECM for purchase, you’ll bypass the need to buy your new home with a traditional mortgage, then turn around and obtain a reverse mortgage — thereby incurring two sets of closing costs. It’s a little like buying extra furniture, then deciding to tear out the spare bedroom. Why go to all that extra effort and expense?

 So the ideal “spring cleaning” to do this season (or whenever you’re thinking of selling one home in order to purchase another):

• Ask yourself: does downsizing make sense for us?
• Begin the process of qualifying for a HECM for purchase reverse mortgage.
• Pay just one set of closing costs, not two.

Best of all, this type of spring-cleaning is so much gentler on older backs — not to mention bank accounts.

 In Part 2, we’ll look at ways to age in place with ease and grace.

Aging in place. It’s a relatively new term for a very old concept: remaining in your own home as you grow older. Once upon a time, this wasn’t an issue. Extended families ensured that someone would be available to look after Grandma or Grandpa should the time come when they needed assistance.

Today, when even nuclear families are something of an anachronism, the picture has radically shifted. While many people live healthy, active lives well into their 80s, 90s, and beyond, and are able to care for themselves in their own homes, others require assistance at some stage due to circumstances such as declining health, an accident, or a similar need that precludes their ability to continue managing independently.

For people who are healthy and want to remain in their own residence as they grow older, a reverse mortgage can help make this a reality. The first step is determining whether aging in place is in your best interest.

Here are seven guidelines homeowners can use to decide whether aging in place makes sense for them, and if so, whether to explore a reverse mortgage. Aging in place can serve a senior well if:

• You have sufficient equity in your home to qualify for a reverse mortgage;
• Your health is generally good, and you’re mobile;
• You have a network of local family, friends, and neighbors you can rely on;
• You drive — and alternate transportation is readily accessible;
• You live in a safe neighborhood;
• Your home can be modified to address changing needs (we’ll discuss this in depth in an upcoming post);
• You’re outgoing, well connected, and able to reach out for social support.

 But: what if one partner later becomes ill or requires assistance?

In Part 2 we’ll look at housing options for seniors who may no longer be able to live independently in their own home.

Don’t be fooled about refinancing from an existing HECM to a new one.

Today an existing HECM borrower called and described his situation.  He needed no additional cash but was enchanted with the idea that he could get more proceeds.  He is seventy years old and lives in a nice home by himself.  He got his loan in 2006.  His home was worth over $700,000 back then; today it is estimated to have a value in the mid $500,000 range.  With higher lending limits and the new changes, he wanted to find out what was available to him.

When the caller heard he could get $70,000 more, he became very interested.  He also liked the idea that there would be no monthly servicing fees like the $25 per month he is paying right now.  Then came the bad news.  First, he would probably have to go to a fixed rate HECM with a 4.99% interest rate rather than the 2.4% he was currently accruing under his adjustable rate HECM.  Second, the FHA Mortgage Insurance that he was accruing monthly on his loan would rise to 1.25% per annum from the 0.5% he was incurring now.  Just the FHA insurance cost alone would increase on his current balance by over $170 per month.  All in all the caller did not like the alternatives but was happy to hear what his choices were.

Yesterday, a woman called asking if I heard that she could get a HECM with a 4.99% stabilized interest rate but with more proceeds?  Last year at our suggestion she had taken out an adjustable rate reverse mortgage and was now receiving over $2,500 per month in tenure payments.

Tenure payments provide a specific amount of cash borrowers can receive monthly over the life of the HECM but they generally vary by the age of the youngest borrower, the expected interest rate, and the amount of available proceeds dedicated to the tenure payouts.  They can only be obtained with an adjustable rate HECM.

When the woman discovered that getting the 4.99% fixed interest rate would cause her tenure payments to terminate and she would instead be required to take all of loan proceeds upfront, whether she needed them or not, her tune changed.  Then as it became clear FHA premium costs would go up as well, all of a sudden, she did not want to trade out of her current HECM to a new one, even if she could get a few thousand more.  When asked if the caller had provided the negative aspects of refinancing, she proclaimed loudly:  “No.  They just wanted to send me “my” new loan application….”  She was not happy with the caller.

Some reverse mortgage originators care more about churning new loans than providing needed information.  It is important that you find out the facts.  So if you have questions or want the information you need to determine if a refinance is for you, please click on the “Have a question?” button at the top of your screen.

Counseling is a consumer protection Congress and the Department of Housing and Urban Development (“HUD”) built into the HECM program to 1) provide information, 2) answer questions, and 3) help consumers understand how a HECM will impact them.  Counseling is provided through counselors employed by qualified non-profit financial agencies, unrelated to any lender.  All HECM borrowers must take counseling.  Counselors are trained on HECMs and must pass a thorough exam on them.

HECM counseling now includes the Financial Interview Tool (“FIT”) created by the National Counseling on Aging (“NCOA”).  Counselors will use FIT responses to provide 1) an overview on how a HECM will help not only now but also in the future and 2) information on other government programs.

Many participants will be required to engage in a more thorough analysis of their overall situation through the Benefits Check Up (“BCU”) program also created by the NCOA. While there are no wrong responses to either FIT or BCU questions, they are an integral part of counseling and must be answered to receive the counseling certificate.  Once a signed certificate is received and a loan application completed, the HECM loan process can move forward.

Participants find counseling far more rewarding when they are prepared.  An experienced Mortgage Loan Originator can help you throughout the entire HECM process including counseling preparation.  To get experience you can count on, click on the “Have a Question?” link at the top of the screen and request the contact info for one of our approved and pre-screened loan originators today.

Check back soon for Reverse Mortgage Changing – Part 2