Retirement Planning With The Reverse Mortgage
Retirement Planning With The Reverse Mortgage by Bob Tranchell
To start 2014 off well, I am going to do a weekly blog sharing some of the ideas and examples of
Keep in mind, with a Reverse Mortgage you can incorporate a dormant asset into a comprehensive financial plan that allows you to diversify your funding sources, reduce market risk, control tax liabilities and enhance your wealth.
I offer a free webinar for clients, Financial Planners, Estate Attorneys and CPAs that explores the many uses. Call me for times or to set up a webinar. 1-800-497-5235.
Age Difference Concern
A couple aged 74 (husband) and 68 (Wife) have a home worth $450,000 and a mortgage balance of $175,000 and a monthly principal and interest payment of $1188. The husband’s business is doing well and so they are comfortable. The problem is he has already had cancer and a heart attack and the wife is concerned about continuing the monthly mortgage payment if he passes away.
We discussed using a reverse mortgage for them but also suggested a rarely used idea. Take out a reverse and make voluntary payments back to the mortgage company, which builds the line of credit. They took out a reverse paying off the remaining mortgage and established a $55,000 line of credit. As long as the husband’s business is doing well and he is alive, they make a $1200 payment on the Reverse Mortgage. This is a comfortable payment given his income. Then if the husband passes away curtail the payments allowing the wife to keep the home.
The results are dramatic. If we assume the husband lives seven more years the line of credit will grow to $214,000. That money is available to her with no further qualifying and cannot be canceled or frozen, like a traditional Home Equity Line. The best news is that the unused portion of the credit line will continue to grow in availability.
When we explained the program to the couple the tension release was visible. She is able to enjoy her life with her husband and is no longer fearful of losing the home if he passes away.
So Let’s Talk
The best way to get started is to talk things over. Give us a call and we’ll be happy to visit you at your convenience. Spend an hour with us and you’ll have the information you need to know if a Reverse Mortgage is right for you.
For more information online, 2013 saw many articles by Financial Planners embracing the benefits of the reverse mortgage in retirement planning. You can read the industry articles on my webpage.
http://www.thenewhecm.com/my_pages.php
Call me today to get started!
1-800-497-5235
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