Forbes: Reverse Mortgages Can Secure Retirement

Reverse mortgages continue to gain more recognition and acceptance as a retirement planning strategy.  The reverse mortgage has been shedding its skin over the past several years from a program just for the cash-poor, house-rich client to include those who are looking to utilize the equity in their homes for retirement and investment opportunities.  The Home Equity Conversion Mortgage (HECM) program, which is the primary reverse mortgage program representing 95% of the market, recently went through a series of changes to ensure borrowers can afford reverse mortgages and help them avoid defaulting on the loan.  The new financial assessment rules will require a potential borrower to demonstrate their capacity and willingness to pay property taxes, home fees, and homeowners insurance based on their income and credit.  Forbes published a recent article that provides three different strategic uses of a reverse mortgage within a retirement income plan.  The first is to use a reverse mortgage line of credit to mitigate market risk and avoid withdrawing from other investment accounts which have not had sufficient time to mature or are not performing due to the present decline of the market.  The second strategy is to delay claiming Social Security benefits or defer one's employer sponsored pension plan.  Similar to the first strategy, this will allow Social Security to mature in order to increase the future amount of that benefit.  The third strategic use has been the most common which is to increase one's cash flow by eliminating a traditional mortgage and or other debt to free up cash that can be used for retirement planning.  Read the entire Forbes article here.

For more information on reverse mortgages and other related topics contact:

Rick R. Rodriguez
Certified Reverse Mortgage Professional, CRMP
NMLS# 473353
Toll Free (877) 500-0454
Local (702) 460-6222