Is a Reverse Mortgage right for you?

Should you consider a reverse mortgage?

Here are the top 4 reasons our clients decided to go with a Reverse Mortgage:

  1. They still owe money on their traditional mortgage. Paying a mortgage on a fixed income can be challenging. A Reverse Mortgage gives you the flexibility to leverage the equity in your home without requiring monthly payments.
  2. They want to improve their cash flow while preserving their retirement savings. A Reverse Mortgage gives you access to cash without depleting your savings or 401K.
  3. They want to avoid financial shortages down the road. Reverse Mortgages can help you plan for future expenses, such as long term care, without the fear of running out of money.
  4. They want to purchase a new home during retirement. With a Reverse Mortgage, you can purchase a new home while keeping your cash flow intact and adding money to your retirement.

A thorough consultation with our team can help you determine if a Reverse Mortgage will be beneficial to you and your retirement goals. In the meantime, here is a list of lending requirements for your review:

  • Age. At least one of the eligible borrowers must be age 62 or older. If you’re age 62 and your spouse is younger this program may still work for you but requires some investigating into the advantages and disadvantages of having a spouse under age 62.
  • House Value. FHA reverse mortgage loan programs currently recognize values up to $970,800. However, this does not mean you are not eligible if your property value is higher than $970,800. You can still qualify, using the equity portion of your house value up to $970,800. Home values and Reverse Mortgage loan amounts are determined by an appraisal. Note: Depending on your home’s value and your goals, there are other loan programs for high value homes that might be a better fit for you. These products, which have no minimum value requirements, can be beneficial when the home value is above $1,000,000. In addition, some proprietary loans will recognize values up to $10,000,000.
  • Interest Rates, Mortgage Balance, and Home Equity. Qualifications are also based on current interest rates and the outstanding loan balance(s) of your existing mortgage(s). Generally speaking, you need to have about 50% or more equity in your home to use a Reverse Mortgage to pay off your existing mortgage loan.
  • Primary Residence. Keep in mind that a Reverse Mortgage loan can only be financed on your primary residence; it will not work for investment properties or a second home.
  • Property Taxes, Homeowners Insurance, and HOA Fees. Borrowers for a Reverse Mortgage are responsible for on-going property expenses, including annual property taxes, homeowners insurance, and homeowners association (HOA) dues (if applicable). If you have been late on your property taxes or insurance payments in the past 24 months you may still qualify for a reverse mortgage loan, but it may require an impound account for property expenses which is referred to as a Life Expectancy Set Aside (LESA).
  • Type of Home. Most home types qualify for Reverse Mortgages. A borrower can finance a single-family home, FHA-approved condos, town houses, twin houses, duplexes, triplexes and even 4-plexes.
  • Credit Score. Your credit profile is a consideration when financing a Reverse Mortgage loan, but credit score is not the most important factor. In fact, we can finance much lower credit scores than traditional mortgage lenders.

Do Reverse Mortgages Deserve Their Bad Reputation?

Reverse Mortgages have gotten a bad rap, but why?

Prior to regulation, consumers didn’t have the protections they enjoy today. Fortunately, Reverse Mortgage products have changed dramatically over the years to the benefit of the consumer.

From 1961-1987, Reverse Mortgages in the United States were not regulated. Small banks and insurance companies financed reverse mortgage loans and each product was different. Moreover, products of the past did not offer the protections available to today’s consumers.

In 1988, Ronald Reagan signed a bill into law which changed the way Reverse Mortgage products work, providing many protections for today’s consumer that weren’t in place prior to regulation. The first FHA insured reverse mortgage loan was originated in 1989. Since then, HUD (the Federal Government’s Department of Housing and Urban Development) regulates and oversees the Reverse Mortgage industry and the FHA (Federal Housing Administration) insures Reverse Mortgage loans. These programs provide the guarantees and security retirees desire when deciding on a Reverse Mortgage, including maintaining ownership of the home.

Now, you can have peace of mind knowing that you can improve your retirement while also leaving the remaining equity to your heirs. If providing a legacy is on your mind we can help.

Check out our Myths Vs Facts page to learn more about common misconceptions

Watch this video to learn more about the safety of a Reverse Mortgage

Please feel free to contact us anytime with questions.

Utilize the Equity in Your Home for Your Retirement

Let’s face it retirement has changed.

We are living longer in retirement than we ever anticipated, forcing us to stretch our dollar further than we imagined. So why not leverage the single largest asset in your portfolio as a source of retirement income?

When you reach retirement age, your home typically represents 30-80% of your overall wealth, making it an ideal vehicle for funding your retirement. A Reverse Mortgage line of credit is a flexible way to provide additional resources to support your retirement and improve your retirement sustainability.

Watch this video to learn more about discovering the benefits of a Reverse Mortgage line of credit:

Please feel free to contact us anytime with questions.

Understanding Reverse Mortgages and Alternative Home Equity Solutions

What is a Reverse Mortgage and how does it work? What are the characteristics of a Reverse Mortgage that make it so unique?

Watch this video to learn more about the difference between a traditional Home Equity line of credit and a Reverse Mortgage:

Simplifying Reverse Mortgages

A Reverse Mortgage is just a mortgage loan. It’s the flexibility of the Reverse Mortgage that makes it unique and different.

Payments Are Optional

You have no monthly mortgage payment requirement, allowing you to improve monthly cash flow for retirement. You can choose to make payments if you want to, but there is no obligation. The only requirements are that the loan can finance a primary residence and that the borrower is responsible for on-going expenses, including property maintenance, annual property taxes, homeowners insurance, and, if applicable, Homeowners Association (HOA) dues.

You Choose How You Use Your Money

A Reverse Mortgage frees up access to money by providing access to your home’s available equity. You can choose to receive monthly income payments, take a lump sum payment, or any combination of both.

Reverse Mortgage Money is Tax Free

The money you receive from your Reverse Mortgage is considered tax-free, so you don’t have to account for it on your annual tax returns.

Avoid the Drawbacks of Home Equity Lines of Credit (HELOC)

HELOCs can be self-defeating. They require you to make monthly payments, which can challenge your retirement cash flow. In addition, HELOCs can be canceled or frozen by the lender at any time, making them unreliable sources of money for retirement. On the other hand, a Reverse Mortgage cannot be canceled by the lender.

We look forward to educating you on how the reverse mortgage can be a useful tool in helping you plan and strengthen your retirement finances.

Please feel free to contact us anytime with questions.

The Retirement Reality

Today, older Americans face a great deal of uncertainty as they move through their retirement. With rising healthcare costs, a volatile stock market and ongoing mortgage and credit debt, it’s not surprising that 87% of Baby Boomers are not very confident that they will retire in a comfortable lifestyle. Many are afraid that their savings accounts, investment portfolios and government benefits will not provide enough money to sustain their changing needs and financial obligations as they age.

If you are like most people, retirement planning generally relies on assets such as: 401(k)s, IRAs, traditional pensions, Social Security benefits, as well as regular taxable savings and investment accounts. But as a homeowner, you have another, often overlooked, retirement planning asset: Home Equity. U.S. homeowners age 62+ have more than $7 trillion in home equity, making it the largest asset for most households entering retirement. For the average retiring couple, home equity makes up 70% of their net worth—with other assets like IRAs, savings and personal property only making up 30%. With such a large proportion of personal wealth tied up in one’s home, it’s time to rethink how home equity can be used as another tool in your financial arsenal.

New Ways to Access Home Equity

Over the last 30 years, reverse mortgages have gained acceptance as part of strategic retirement planning. In fact, a growing number of respected retirement researchers, such as Harold Evensky, Dr. John Salter, Dr. Wade Pfau, and the Center for Retirement Research at Boston College have all conducted numerous studies to evaluate the pros and cons of reverse mortgages for the benefit of consumers. They have concluded that the reverse mortgage is an important option, with multiple uses that can often help consumers be better financially prepared in retirement, and avoid outliving their money.

1Source: Campbell, Todd. “9 Baby Boomer Retirement Facts That Will Knock Your Socks Off.” The Motley Fool, 19 Mar. 2016,
www.fool.com/investing/general/2016/03/19/9-baby-boomer-retirement-facts-that-will-knock-you.aspx.
2Source: U.S. Census Bureau.
3Source: Go Banking Rates. (2018) “The No. 1 Cause of Financial Stress in Every State.”
4Source: Sandra Timmermann, “Shocks and Loss in Retirement: Preventing Despair, Promoting Resilience,” Journal of Financial Service Professionals 70, No. 5 (2016).
5Source: Susan Hoover, “Long-Term Care Insurance (LTCI): The Good, the Bad, and the Ugly,” Enterprising Investor blog, CFA Institute, September 19, 2016.
6Source: National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI).
7Sass, Steven A., “Is Home Equity an Underutilized Retirement Asset?”, Center for Retirement Research at Boston College, Number 17-6, March 2017
8US Census Bureau, “Wealth, Asset Ownership & Debt of Households Detailed Tables: 2015”
9Salter, John., Evensky, Harold., & Pfeiffer, Shaun. (Aug 2012). Standby Reverse Mortgages: A Risk Management Tool for Retirement Distributions. Journal of Financial Planning,
pg. 40. | Pfau, Wade. D. (2016) Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement. Retirement Researcher Media.