Electronic and smart locks for your home, they are here!

Here is a new article, on my other site:


smart locks for your home

Electronic locks

The days of leaving a spare key under a rock in your yard may be over.  Thanks to the amazing power we now hold in our hands, the smart phone, we can lock, unlock and monitor our homes without having to carry a key.

Already, my newest car has a fob instead of a key and its a natural step to put the electronic lock into your home.

Electronic locks are not new, I have a couple older ones sitting in my shed. They were quite useful for rental homes, new construction, or homes we would fix and flip.  You would set the code and give it out to whoever needed it.  After the project was done, or the home was rented, you changed the combination.  This is much less expensive than a locksmith and the lock could be taken to a new property if needed.

Some people might be concerned about the electronic nature of securing our homes, but is your home really secure with a manual lock and key when anyone could probably enter by way of a window and rock?  If your phone is dead or power goes out, there would be a back up using a traditional manual key.

If you want a new home with all the latest features like electronic locks, we can get you pre-approved quickly and before you know it, you will be moving into the new home.

How can older Americans dig themselves out of debt?

“Don’t be paying a mortgage with social security” is a quote from my father years ago.

After reading this, I have a few thoughts:



Going into retirement with debt and mortgage payments is a really bad idea.  Its unfortunate that  too many Americans find themselves in this position.

Sometimes it due to a job loss, divorce, or healthcare event that causes this.  Other times its simply not saving enough or making an effort to pay down debt and save more.  Fortunately, this can be fixed, even if you are in your 40s, 50s or even early 60’s.

Recently, I was with a refinance client  in their 40’s/early 50’s and after the closing and they were lamenting they would never be able to retire and stop working as they had just taken out a new 30 year mortgage. They were just looking at the date on the note.

The next morning  I ran their numbers and projected the amortization schedule with a small yearly home appreciation (3%) to see how much their projected equity would be.  At age 62, they would have paid down their mortgage enough to get a Reverse Mortgage and eliminate a mortgage payment out of their retirement budget.  I immediately communicated the good news to them. The conversation went a little like this:

“If you stay on the regular payment plan of your new mortgage, you should have enough home equity to put a reverse mortgage in place when you both reach age 62.”

Delivering great news to clients is just one of the many satisfying aspects of my profession.

Lesson is: No matter how late you are to the retirement planning, you should start.  Even 10 or 15 years of planning will drastically improve your retirement.

For more information on how a reverse mortgage works, go to: My Reverse Mortgage information website

or you can contact me at 208-955-9080





WSJ article, “The new math on reverse mortgages”

A really good, short read on Reverse Mortgages here:


Quote: Prof. Moulton cites a recent report by Harvard University’s Joint Center for Housing Studies that found that nearly 40% of seniors age 65 and older carry a mortgage today, a rate that has more than doubled since 1992. “Using a reverse mortgage to pay off a forward mortgage frees up monthly cash flow to a household,” she says. “Essentially it has the same effect on a household budget as receiving a monthly annuity payment.”

This is why more and more people are looking at a Home Equity Conversion Mortgage, aka Reverse Mortgage when they are considering retirement or early in their retirement years rather than waiting until it becomes a last resort.

Just recently I helped a client who was in the pre retirement phase and planning for the day they can quit their job.  Eliminating their mortgage was the same as putting $800 a month back into the budget.

Sometimes, its worth bringing cash to closing is your initial HECM benefit is not enough to payoff your existing forward mortgage.  If you brought a years worth of payments into close, assuming you had it in an account like IRA, 401k, or any other account, wouldn’t it be worth it to have the option to retire when you want to?

Other times a client might have a home paid off or mostly paid off but now we are establishing a HECM standby line of credit.   The HECM standby line of credit cannot be cancelled nor do you never make a monthly payment.  It can be a valuable retirement planning tool.  You might not need the line of credit in your 60’s or 70’s but by the time most of us are in our 80’s, we probably will have some health care needs or necessary home modifications and the HECM standby line of credit can be used to address those needs.

Establishing the HECM standby line of credit early on, you will benefit from the growth of available funds, currently in the 5% range per year.  Your available funds could more than double in a decade or two if you don’t draw out the funds until you have a real need.

By waiting to do so, you miss out on this growth and you might find you can’t qualify for a forward mortgage like a traditional bank HELOC.

Anyway, more and more financial advisors and sources like the Wall Street Journal are learning more about Reverse Mortgages, aka HECMs and more and more are coming out in favor of them as a valuable retirement planning asset.

To learn more, you can go to my HECM website  or simply call me at 208-955-9080 and I will be happy to discuss your individual situation.



How to use a Reverse Mortgage to cover future healthcare expenses

I recently attended a workshop on healthcare cost and was astonished by the impact of healthcare costs on the net worth of senior home owners.  The average cost of a nursing home averages $91,000 per year, in home care about one third of that.  At that rate, someone who has been able to accumulate wealth, pay off their home, and enjoy retirement in that home are all at risk by a healthcare event.

If you have to go into a Medicaid facility, any home equity will be liened by the facility and will be not be available for the senior homeowner to use.  Furthermore, in order to get into a Medicaid facility, you cannot have more than $2000 in assets.  Many times, people end up spending assets in advance to qualify.  In effect, they are “spending themselves poor” as I heard it called.  Medicare also requires that any transfers of assets for a certain time are examined and could be taken back from family members if it was determined that it should have been used for healthcare expenses.  This can be a very stressful and exhausting process for all at a time when the health of a loved one should be at the top of everyones’ concerns.

The Home Equity Conversion Loan, also called a Reverse Mortgage, can provide access to the homes equity to pay for: home modifications, medical expenses, and ideally, long term care insurance policies that take the burden off the individual and create a pool of money that can be drawn upon to pay for care, either at home or in a facility.   The Home Equity Conversion Loan puts a “protective umbrella” over the home’s equity and make the filing of future liens untenable.

Long term care policies come in several forms from stand alone policies with monthly or single lump sum premiums and other hybrid type policies that combine long term care money and life insurance into one policy.  By taking the procedes from a HECM and buying LTC insurance you can guard against a healthcare event that destroys net worth that might have taken decades to aquire.

One of the more interesting uses of a HECM is to have the home remodeled and adaptaed to current needs.  Doorways can be widened for wheel chairs, showers and bathrooms made more accessable, and any other adaptations needed to age in place.  At the end of our lives, I think we would all prefer to stay in our home.

Here is a useful booklet from the Council on Aging.

If in home care is an option, it will cost much less than a facility and can extend the time that insurance funds can cover care.

A Reverse Mortgage can be used to pay premiums on long term care policies.  If a Reverse Mortgage is obtained early enough, the growth of the line of credit can offset the annual premium costs.

As our citizens grow older and our life spans increase, the problem of outliving our assets is very real. A lifespan of 100 years or more is becoming more common.

Personally, I will be obtaining my own reverse mortgage in a few years as soon as I can.  I might not need the funds now, but who knows what my health care needs will be at age 90,100 or even 120.  I might be a bit optimistic, but who knows?

Anyway, if you would like to see how the program can help you protect your assets and provide for the long term healthcare needs, just contact me and I would happy to help.




Summer home sales in Boise, Idaho are smoking hot!

the Independence day weekend marks the mid point for summer sales for most of us. Boise’s 2015 sales season has been very hot from the early spring.  Unlike 2014, when we had a prolonged, colder winter, people seemed to be ready to start shopping in February.

Earlier on, in the start of the season, we say several homes sold at or above asking price.  Many others, have come back over the appraised value and some people still bought.  In most cases, a cancellation or re-negotiating  of the sales price happened.

Other interesting fact, the local real estate appraisers are factoring the “Production Builder penalty” into their valuations.  Without naming any specific names, we have several builders in the Treasure Valley who build hundreds of homes a year, typically in their own subdivisions.  If they build for less than “Custom Home Builders”, the value a home owner is going to be compared to other homes built by that builder.  They could be as much as $20/foot or more less than a custom home of the same size and finishes.  This has led to some upset realtors and home owner’s but its something to consider when buying or building a new home.

Realtors I work with are reporting multiple offers on newly listed homes in a matter of days if not the first day a home is listed on the local MLS.

As a result of our hot market, I am seeing longer times to appraise a home.  Loan underwriting times are getting longer as well as more home purchase loans are submitted.  FYI, Fairway Independent Mortgage Corporation underwriting times are about 5 business days right now.  Most loans are getting finished within 30 days of application.

Another trend I am seeing is people relocating from California, Nevada, and other states to the Boise area.  Many times they are retirees with pensions and cash from the sale of their previous home.  They can pay cash and close in a couple of days if they wish.  This may not be the best use of that lump sum, the HECM for Purchase Loan enables borrowers 62 or up to put up a fraction of the price of the new home and a reverse mortgage, or HECM, will cover the rest.  Expect to put down half and the Reverse Mortgage covers the rest.  Save the rest of your cash for getting outdoor and enjoying what Idaho has to offer.

Mortgage interest rates are still low.  They have moved up about .5% on a 30 year fixed rate loan from the low 3’s to the upper 3’s and low 4 percent rates as of today.  The “experts” keep saying rates are going to go up in the future, but so far they are holding at historically low rates.  You could be regretting not getting a home if you had the chance in summer of 2015 and didn’t.


Home values in the treasure valley, still a lot of “underwater” home owners

We still need a few more good years to get back to positive equities in the Treasure Valley.  At least, its not 2010 anymore….

What are the new rules for Reverse Mortgages on April 27th 2015?

The Home Equity Conversion Mortgage, aka Reverse Mortgage will have new requirements after the 27th of April, 2015.

The borrower seeking a HECM will have to undergo a financial assessment done as a part of the process.  If the borrower is deemed to be incapable of handling the ongoing responsibilities of the loan, ie property taxes and insurance, a portion of the loan will be set aside to cover property taxes and insurance.

The most common way Reverse Mortgage borrowers get in trouble late is being unable to pay their insurance and taxes.  Defaulting on those items can put them into default and eventually foreclosure.

If a borrower has a good credit payment history and sufficient income, they can probably handle the property taxes and insurance.  If they are lacking income or have a history of delinquent payments, then it’s probably a good idea to set aside some of the funds to cover these future expenses.

Now, if you are currently in process of getting a reverse mortgage, this will not apply to you.  Anyone who starts an application after the 26th, the new rules will apply.


Veterans Administration Loans for Zero Down Payment borrowers

One of the many benefits available to honorably discharged veterans is the VA Home Loan Benefit.

Basically, it will allow you to buy a home with ZERO DOWN PAYMENT and get a low-interest rate at the same time.  Normally, if you put less money down, you would expect to pay more in rate than someone with a larger down payment but this is not the case with a VA home loan.

Right now, we can get qualified veterans 30 year interest rates in the mid 3 percent range.  This equals $4.49 per thousand borrowed in a monthly payment.  A $100,000 loan would have a payment of $449 per month not including taxes and insurance.  At this rate, buying a home certainly costs less than rent in the Boise area.

How does the Veterans Administration offer this?  First of all, the loan is not from the government but instead its secured by the VA.  The loan is made by lenders to the borrowers according to the VA loan program.

If  XYZ Bank makes a loan to a veteran and later the veteran goes into foreclosure, the bank takes the initial loss.  The VA pays the bank for the defaulted loan, making them whole and takes the house back as collateral for the money lost.

This might seem risky, but the VA loan guidelines are written in such a way as to encourage responsible lending and not letting veterans get over indebted.  Furthermore, Veterans by nature of their service, have demonstrated the ability to follow the rules and generally don’t go into default nearly as much as other home buyers.

How does one qualify for a VA loan?  Its easy, you call your local lender and ask for a VA loan specialist.  If you don’t have one, I can be reached at 861-7579.  They determine quickly if you qualify and can give you an estimate of the payment on the home you are looking at.  You don’t need your original certificate of eligibility, instead, the lender will retrieve it directly from the VA.


Why aren’t more renters buying?

In our market, Boise Idaho, the cost of renting a house is more than the cost of a mortgage for a similar home. It would seem that everyone would be buying a home.

The Wall Street Journal did a survey on why, and here it is:


The top three reasons are directly related to our economy and job market, not worries about values dropping or other reasons.

What do you think? Comment below:

New Home Loan qualifications and bank overdrafts

New changes to mortgages in 2014 require a lender to judge the borrowers ability to repay.  I like to think that we did prior to this, but when new laws are passed, they always generate new guidelines that supersede the past methods of qualifying borrowers for a home mortgage.

In the past, the presence of overdraft fees in a borrowers bank accounts were left to the discretion on the underwriter.  Now, they are considered a negative factor in judging a borrowers ability to repay the home loan.  Even transfers from a line of credit when done to prevent an overdraft are considered a negative factor in the borrowers ability to repay their home mortgage payment.

Overdraft and Transfer fees can add up to a significant amount of fees in a month.  This in effects becomes a regular monthly debt which can at the least increase your Debt to Income to the point you don’t qualify.  Even if it’s not much, it’s an unnecessary fee that you don’t need to be paying.

What if you have them?  It might be possible to ignore them if  you have a few months of zero overdraft fees or credit line transfer fees.  How to address that if you do have them showing on your bank statements?  It’s sometimes possible to prove to the underwriter that you have changed your ways.  Pre purchasing and budget counseling certificates can prove you have. A letter explaining specific steps you have taken to better manage your money will probably be required as well.

It is definetly more complicated to qualif for a home loan these days, but with proper planning and the willininess to do what it takes, you can get qualified for your next home mortgage.

If you’re in Idaho, and you have questions or want me to look at your situation, call or request a loan pre-qualification at my site.



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