A Reverse Mortgage Equity Line
….can be a serious and compelling tool for consideration. If the right conditions exist with a retiree than the option for a reverse mortgage equity line of credit can be another possibility in their retirement planning. The option of a reverse mortgage as a retirement tool is becoming more viable to homeowners and financial planners who are looking to provide additional scenarios to retirement goals. Managing assets are a big part of retirement planning. A retiree biggest asset is usually his home. Makes sense to explore the options of asset management of your homes equity. In an article that expands on the “the thinness of wealth” Scott Burns points out the 80% of all households had more money in home equity than they had in their combined financial assets and retirement accounts. The impact on using a reverse mortgage in adding to your annual purchase capacity is obvious if you do the math.
Reverse Mortgage Equity Line as “a standby line of credit”
Recent updates and changes to the HECM (Home Equity Conversion Mortgage) program has started to change the perception of how a reverse mortgage can be useful in retirement planning. Retirement advisers and planners are taking notice. As we become more educated on different strategies that can be utilized with “standby line of credit” then we see how current strategies may be complemented with a reverse mortgage plan. What seems to be of interest to financial advisers is the potential growth factor in the credit line as a hedge against inflation. This is especially true when see a rise in interest rates. Even more so if we see home values decline. Considerations that include delaying the draw of Social Security, home repair, healthcare security and preserving other assets are just a few additional retirement concerns. Keep in mind the cash infusion from a reverse mortgage is “tax-free”
The HECM program has gone through many changes since 2013 with even more changes this year. Clearly a reverse mortgage today is not the reverse mortgage from years back. Education is the key to understanding and utilizing the options that may be available.
Keeping up and moving forward.
Rod Graves
619-587-9765
Reverse Mortgage Specialist
NMLS# 324581
CalBre# 0870696
