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REVERSE YOUR THINKING

REVERSE YOUR THINKING

Everything about mortgages is better when it comes to Reverse Mortgages.

You may have heard that a reverse mortgage has hidden risks. The fact is a traditional mortgage may not be your safest choice once you approach retirement age.  Here’s why. Homeowners with a traditional mortgage have their wealth tied to their home’s equity. And you can’t easily take advantage of this equity. For instance, you may face sudden medical bills, home repairs, or an emergency.

With a traditional mortgage you can’t access your equity and eliminate monthly mortgage payments. With a reverse mortgage, you can.

Advantages of a Reverse Mortgage

  • Payoff traditional mortgage if one exists
  • Eliminate monthly payments
  • Free up funds for other bills and liabilities
  • Assist family emergencies
  • Purchase a new home

Security

A reverse mortgage offers a level of security for the owner(s) that simply cannot be obtained with a traditional mortgage in two areas.  The ability to remain in the home indefinitely without the requirement to make a mortgage payment.  The ability of a spouse to keep and maintain the residence following the death of a spouse.

Appreciation

Retain ownership and control of home and benefit from future appreciation of the property.

Ownership

The ability to transfer ownership as part of an estate plan and the ability to sell the property whenever desired.

Line of Credit

A reverse mortgage can also provide access to a line of credit that grows every year, is easily accessible, cannot be frozen, and allows for but does not require payments.  The proceeds of the line of credit are not taxable and can be used for any purpose.

Financial Planning Opportunities

For those with low mortgage balances or those without a mortgage, there are significant benefits that reverse mortgages can provide.  A reverse mortgage can help manage sequence of return risk that is a major issue in retirement planning.  Simply stated, sequence of return risk is the risk that an individual will run out of money faster than expected due to market conditions.

Additionally, a reverse mortgage allows for financial efficiency.  What is meant by financial efficiency is the ability of an individual to manage all assets in a unified manner with the ability to choose which asset can be used to best meet a financial obligation or need.  For example, rather than selling an investment or taking money out of a retirement account to meet a need and thereby lose the earnings from the investment, it can be more efficient to use a reverse mortgage and leave the other funds invested.  This can be accomplished without having to take on a large payment which is required if a traditional mortgage is used for the same purpose.

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There are many more benefits that are associated with reverse mortgages.  If you are interested in finding out more about the benefits give us a call at 303-468-1985