A New Way of Looking at Reverse Mortgages

It has been awhile since we posted to this blog . . . and this commentary on reverse mortgages is probably long overdue.

Over the past several months, we have spent a lot of time educating both professionals and consumers on the benefits of a reverse mortgage.  We are focused on dispelling common myths as well as showing powerful illustrations on just how valuable a reverse mortgage can be for a retiree.  Now don't get us wrong, we are not saying that a reverse mortgage is for everyone - but if there is any uncertainty in someone's long term plan for retirement, we would strongly suggest they take the time to learn about a reverse mortgage and the possible benefits to them.

A reverse mortgage is a federally insured product that is available to homeowner's age 62 and up that have sufficient equity in their home.  The rule of thumb is that at age 62, the homeowner would likely qualify for a reverse mortgage amoung of approximately 60% of the home's value.  A reverse mortgage also falls into a "non-credit qualfiying" category - meaning that credit, income and assets are typically not relied upon in the qualification (if the homeowner needed to come in with cash to close, it would have to be verified but beyond that there is typically no asset requirements).  And likely the best part of the reverse mortgage is that it is a loan that does not require repayment as long as the homeowner remains in the home.

Beyond the basics of the reverse mortgage lie many retirement planning tools that people typically don't think of.  It could be a solution that would allow someone to defer Social Security to accrue a higher benefit; it could be a solution to allow someone to defer withdrawals on qualified accounts to ensure that they won't run out of money; it could replace a traditional mortgage liability with monthly income allowing for a timely retirement . . . the options are many.

We came across an article today that takes some of our theories on using reverse mortgage proceeds in retirement to another level.  This article provides an in depth look at three different strategies for using a reverse mortgage to create retirement income.  It definitely validates our stance on the benefits!  We encourage any of our readers to also take a look at this article: http://www.fpanet.org/journal/ReversingtheConventionalWisdom/.

We would also like to extend invitations to our readers to attend our educational seminars on reverse mortgages.  On the markets that we serve, we offer them on a weekly basis - call our office to find out when the next seminar is!  We also are happy to do one-on-one consultations to provide the answers a homeowner needs to determine whether this product is right for them.  Contact us at 888-556-5366 for answers to any of your reverse mortgage questions.

Happy Reading!