USA Today: Reverse Mortgages a Critical Part of Retirement Planning
Reverse mortgages continue to receive positive publicity in the news media, this time from USA Today.
In a recent article, titled “Want financial security? Home equity and retirement accounts are key,” reverse mortgages are described as being a critical part of retirement planning.
Wade Pfau, professor of retirement income at The American College of Financial Services states in the article that “home equity is a very important asset for American retirees, and so it is important to think about how to make best use of home equity in retirement planning.”
Randy Bruns, a private wealth adviser with HighPoint Planning Partners, says a “reverse mortgage line of credit can greatly reduce sequence of return risk by providing timely access to cash so you won’t have to sell investments until after markets have recovered.”
“The hope is that a reverse mortgage line of credit can act as a standby source of liquidity in the kinds of instances that would otherwise lead to financial ruin for your portfolio.”
Reverse mortgages let Americans 62 and up borrow from their home equity
Also known as home equity conversion mortgages (HECMs), reverse mortgages let seniors 62-and-older convert part of their home equity (wealth) into cash, a monthly check, or a line of credit. In addition, the recipient is able to continue living in their home for the rest of their life.
Reverse mortgages aren’t required to be paid back while the recipient lives in the home, and the recipient gets to keep the title to the home. This means they’re still responsible for paying property taxes, homeowner’s insurance, HOA fees, and maintaining the home.
With American homeowners 62 and older having a combined $ 6.2 trillion worth of home equity as of March 2017, reverse mortgages are increasingly recommended by economists, financial planners, and prestigious universities such as Harvard.
Reverse mortgages can help seniors achieve a range of financial goals
For eligible seniors, reverse mortgages can help provide financial security, and the ability to achieve a wide range of goals. These include:
- Building a “rainy day fund” for future health care costs
- Supplementing monthly living expenses
- Funding expensive home and auto repairs
- Living a more active lifestyle
- Continuing to live in their home
- Buying a new home
Contact Open Mortgage to learn more about reverse mortgages
While reverse mortgages aren’t meant for everyone, growing numbers of seniors are successfully using them to supplement their finances.
If you’d like to learn more about how a reverse mortgage could help you, contact one of Open Mortgage’s friendly loan originators.