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Maximizing Returns in a Rising Interest Rate Environment: Comparing HECM vs. Selling Bonds Strategies

Wed, 01 May 2024 02:16:53 GMT

Are you a financial advisor? What are your thoughts on using Home Equity Conversion Mortgages (HECM) as an alternative to selling bonds instead of holding bonds to maturity in a rising interest rate environment?

Holding bonds to maturity can help minimize losses in a rising interest rate environment because bond prices typically decrease as interest rates rise. This inverse relationship between bond prices and interest rates is because when new bonds are issued with higher interest rates, the older bonds with lower interest rates become less attractive to investors. As a result, their prices decrease.

If an investor decides to sell bonds in a rising interest rate environment, they might have to sell them at a lower price, incurring a loss. By holding the bonds to maturity, the investor can collect the bond's full-face value, effectively avoiding the loss they would incur by selling it at a lower price.

On the other hand, a Home Equity Conversion Mortgage (HECM) offers homeowners a powerful tool to tap into their home equity without the need to sell their home. The proceeds from a HECM can be used to fund expenses, potentially reducing the need to sell bonds in a rising interest rate environment. This financial freedom can significantly enhance your financial planning.

By utilizing a HECM, the investor can allow their bonds to continue to earn interest and potentially recover from any price declines due to rising interest rates. This potential for recovery offers a hopeful outlook for your investments. Once the bonds mature, the investor can then repay the HECM loan and still have the bond's face value to reinvest or use for other purposes.

In summary, holding bonds to maturity in a rising interest rate environment can help minimize losses, and using a HECM can provide an alternative source of funds to cover expenses, reducing the need to sell bonds at a loss.

Are you a financial advisor looking for strategies to maximize your clients' returns in a rising interest-rate environment? Look no further!

If you have any questions or want to discuss how these strategies can be tailored to your client's needs, please don't hesitate to contact us. You can do so today by filling out one of our forms, calling our office, or emailing us.

We're here to help you provide your clients with the best possible advice and service. Don't wait—contact us now!

Russ Barbashin.

While this article focuses on bonds as a primary investment strategy in a rising interest-rate environment, it's essential to recognize that numerous other investment strategies can be beneficial and should not be disregarded. Using bonds as an example, we aim to initiate a broader discussion with financial advisors about the various investment options available to them and their clients, ultimately tailoring strategies to meet specific needs and goals.*

Stretching Your Retirement Income: Exploring the Power of Reverse Mortgages

Tue, 05 Sep 2023 16:52:03 GMT

The Silent Enemy: Inflation & Fixed Income

Inflation – it’s the silent enemy of every retiree. As the costs of living surge year after year, many seniors on fixed incomes grapple with dwindling financial resources. Just when life should be about relaxation and enjoyment, the daunting reality of running out of money before the end of the month emerges. Fortunately, there's a beacon of hope for those over 65 looking to supplement their income: reverse mortgages. But what exactly are they, and how can they help? Let's dive in.

Reverse Mortgages: The Financial Lifeline You Might Need

Think of reverse mortgages as the “anti-mortgage.” Instead of you paying the bank, the bank pays you. It's a way to tap into the equity of your home without selling it. For seniors over 65, this can be a game-changer. Why might you want one? Well, besides combating the effects of inflation, it provides liquidity in your golden years, allows you to maintain or even improve your current lifestyle, and offers peace of mind knowing that unexpected costs won't throw your finances into disarray.

Decoding Reverse Mortgages: How They Work

Unlike traditional mortgages, where you're chipping away at debt monthly, reverse mortgages work by turning a portion of your home equity into cash. This can be received as a lump sum, monthly payments, or even a line of credit. The best part? There are no monthly repayments. The loan is repaid when you sell your home, move out, or upon your passing. Additionally, the amount you owe will never exceed the value of your home, ensuring that you or your heirs won't be left with unexpected debt.

Making the Move: Securing Your Reverse Mortgage

Interested in harnessing the power of a reverse mortgage?

Here’s how:

Assess Your Eligibility: Generally, homeowners over 62 (though some require 65), with substantial home equity, and living in the home as their primary residence qualify.
Get Counseling: Before applying, federal law mandates that potential borrowers undergo counseling with a government-approved agency to understand the pros and cons.
Choose a Lender: Shop around for a lender who offers favorable terms and understands your needs. They will guide you through the application process.
Undergo Financial Assessment: Lenders will review your financial situation to ensure you can maintain your home and cover property taxes and insurance.
Property Appraisal: Your home will be appraised to determine its current market value, which will influence the loan amount.

Take Action Today: Secure Your Financial Future with Access Mortgage Solutions

If this sounds like the solution you've been waiting for, don’t delay. Contact Access Mortgage Solutions now to get a quote and embark on the path to financial security in your retirement. Your golden years should shine, not be shadowed by financial worries. Take control today.

Call us Toll Free at 866-258-0377 .

3 of 10 Certified Reverse Mortgage Professional’s ( CRMP ) in Florida Call Access Reverse Mortgage their Home!

Mon, 14 Aug 2023 20:52:09 GMT

Malcolm “Mac” Tennant and his wife Pamela Tennant, the Co-Founder and President of Access Reverse Mortgage Corporation, respectively, have joined an elite cadre of mortgage professionals who have achieved the status of being a Certified Reverse Mortgage Professional, or CRMP. National Reverse Mortgage Lenders Association (NRMLA), headquartered in Washington, D.C., bestowed the certification on The Tennant’s after they passed a rigorous exam and background check, thereby demonstrating a competency in the area of reverse mortgages and a dedication to uphold the highest ethical and professional standards.

Only 101 individuals nationwide currently have the CRMP credential, including 10 in Florida. In addition to Mac and Pam, one of their employee’s, Eric Christensen, also achieved the CRMP designation this year.

“Being one of just 101 people nationwide to have achieved this milestone is a testament to our commitment to reverse mortgages and our clients,” says Tennant. “The process involved to receive this professional designation was long and arduous and adds to the level of expertise maintained by myself and the firm.”

To qualify for the designation, applicants must have originated reverse mortgages for two or more years and personally closed at least 50 loans; earned 12 continuing education credits; completed NRMLA’s Ethics Course; passed a comprehensive exam; and a background check. The certification is valid for three years, during which time designees must earn 12 CE credits annually to be re-certified. Applicants who are not loan originators, but nonetheless work in areas vital to the business, such as counseling, processing, underwriting and servicing, must have five or more years of experience.

“Mac and Pam are two of 101 designated individuals with the Certified Reverse Mortgage Professional designation. As CRMP’s, they have demonstrated knowledge and competency in the area of reverse mortgage lending, and are dedicated to upholding high standards of ethical and professional practice in the industry.” said Peter Bell, President & CEO of the National Reverse Mortgage Lenders Association.

Reverse mortgages are available to homeowners 62 years old and older with significant home equity. They are designed to enable older Americans to borrow against the equity in their homes to help fund retirement needs, without having to make monthly mortgage payments. Borrowers still need to pay their property taxes, insurance, any association fees and ground rents and comply with loan terms. Failure to do so can result in foreclosure. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells, or passes away. Borrowers may draw down funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as they continue to live in the home. To date, more than 900,000 senior households have utilized an FHA-insured reverse mortgage.

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

The Many Uses of a Reverse Mortgage

Mon, 14 Aug 2023 20:22:51 GMT

The Many Uses of a Reverse Mortgage

The complexion of the Reverse Mortgage industry has changed dramatically over the years. The FHA-Insured Reverse Mortgage is no longer considered a rescue device. Our typical borrower today is in their early 60’s, has excellent credit and upper level income. About half of our clients have a free and clear home and utilize the increasingly popular Reverse Mortgage line of credit. The built in credit line growth rate feature means that the unused portion of the line of credit will grow each year. The other half of our clients are using the Reverse Mortgage to pay off an existing mortgage, freeing up their monthly mortgage payment for other uses.

We have closed Reverse Mortgage loans for some of Sarasota’s wealthiest families. From St. Armand’s Circle to Fort Myers, wealthy clients are being advised by their financial planners to look into reverse mortgages as part of their retirement financial planning. The strategy these financial planners suggest is establishing a Reverse Mortgage line of credit to draw on rather than retirement savings in a bear market.

One borrower we worked with recently in Carrollwood has very little equity so he is bringing $60,000 to closing in order to pay off an existing mortgage. By doing so, this borrower will not have to make a monthly principal and interest payment for as long as he lives in the home as his primary residence. As always, he will have to continue to pay his property taxes, homeowners insurance, and HOA fees, and maintain the property to FHA standards.

This is becoming more and more common; one couple in The Villages recently brought $110,000 to the closing table. This, along with the proceeds from their reverse mortgage paid off a substantial existing mortgage. They said that “even laying out $110,000 we will break even on cash flow in under 5 years, and look forward to another 20 years or more after that with no monthly mortgage payment!” Another client we recently met with owns a $1.5 million home in Palm Beach. He has no existing mortgage and is looking to tap into some of the equity he has in his home without the burden of monthly mortgage payments. This particular customer has the option of using an FHA-Insured Reverse Mortgage, or one of the Jumbo Reverse Mortgage programs we have available.

The uses of reverse mortgages are endless! From paying off a home equity line of credit that’s coming due for a customer in Tampa Palms, to closing a loan in 8 days to stop a foreclosure for a customer in Hollywood, to funding a divorce settlement in Venice, the FHA Home Equity Conversion Mortgage, more commonly known as a Reverse Mortgage, is a great financial planning tool to fund the baby boomer retirement! Every borrower has a unique situation that deserves a thorough evaluation and consultation. Call today for more information! 866-258-0377

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

Reverse Mortgage Strategies

Mon, 14 Aug 2023 20:13:39 GMT

Reverse Mortgage Strategies

Many new reverse mortgage strategies are available for your use today than there were in years past. Thanks in large part to these recent changes, the FHA-insured Home Equity Conversion Mortgage (HECM) aka the reverse mortgage, has seen it’s place in the world shift dramatically. Until recently the reverse mortgage was viewed as a product of last resort. The many recent changes have shifted the program into it’s role as a financial planning tool with many reverse mortgage strategies becoming clear. Forbes published an article on May 18, 2015 that discusses three excellent opportunities to use the reverse mortgage.

One of the most thoroughly studied reverse mortgage strategies is known as the Standby Line of Credit strategy. The standby line-of-credit option suggests using a reverse mortgage as an emergency line-of-credit to be tapped for income when the market is down. This can alleviate the strain on your portfolio that might come from withdrawing your usual income, allowing it the opportunity to potentially bounce back. When combining this factor with the credit line growth rate a recent study found this strategic use of a reverse mortgage significantly increased portfolio longevity.

The second of the reverse mortgage strategies discussed was using a reverse mortgage to supplement your income in order to delay taking Social Security until your full retirement age. Delaying Social Security can potentially provide significant increases in your monthly income when you do eventually begin receiving it. There is also the flexibility of delaying Social Security to potentially avoid paying increased taxes, depending on your individual situation. When to take your Social Security is a complicated decision that should be discussed with a knowledgeable professional. If you do feel that delaying Social Security might be right for you, a reverse mortgage may provide you the liquidity you need to do just that.

The last of the reverse mortgage strategies that the article discusses is the more traditional use of replacing current debt with a reverse mortgage. This is what many people do when taking a reverse mortgage , they use the proceeds to pay off an existing mortgage or home equity loan, or even to repay credit cards or other high interest debt. This can potentially lead to improved cash-flow for you, by eliminating your current monthly payment. It is important to remember that although the reverse mortgage does not require a monthly mortgage payment, you are still required to pay your property taxes, insurance, any applicable association fees or ground rents, and also maintain your home to FHA standards. Failure to do so will result in foreclosure. With that in mind, eliminating your monthly principal and interest payment is the difference between a successful retirement plan and a failed plan for many borrowers.

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

The Importance of an Experienced Reverse Mortgage Company

Mon, 14 Aug 2023 16:56:20 GMT

The Importance of an Experienced Reverse Mortgage Company

The most recent FHA Reverse Mortgage statistics are now available, and highlight a dangerous trend in our industry. In Florida, 160 companies closed at least one Reverse Mortgage in the first quarter of 2015. The vast majority of those companies (primarily “forward mortgage” providers) closed less than one loan per month! What does this mean, and why does it matter to the average borrower? It means that there are very few experienced reverse mortgage companies in Florida when compared to the “part-timers”.

Reverse mortgages are a highly specialized loan product with several unique and often surprising features. For example. if you decide to receive equal monthly payments with the available funds from your reverse mortgage, you can maximize your available monthly payment by increasing your interest rate (but only to a certain point). A higher interest rate can also increase your credit line growth rate, potentially allowing you to access more of your home equity in the future if you set up a standby line of credit. Quirks like these, along with constantly changing underwriting guidelines make working with a part-timer a risky proposition.

There are also several different ways to structure reverse mortgage loans, each with their own set of advantages and disadvantages. It is vital to have an experienced company and loan originator to talk with before starting the process. They will make sure you understand all of the available loan programs and help you structure structure a reverse mortgage loan that will be beneficial to you over the long-term.

We recently encountered a tragic, yet completely avoidable situation involving a Reverse Mortgage for Purchase loan. The borrower had contacted a mortgage company who recently added a “we also do Reverse Mortgages” tagline to their advertising. The borrower went through their “pre-qualification” process and was assured there were no red flags. She found a home, had her offer accepted, and starting the loan process.

Everything appeared to be going smoothly, until she received a call on closing day, indicating that there was a problem. The loan officer and processor had missed something during the application process, a “quirk” with Reverse Mortgages regarding the ability to use an out of country power of attorney. The customer was assured everything would go smoothly, yet there they sat, the day they were supposed to have closed on their new home, being told it wasn’t going to happen. We received a frantic call later that day from the buyer’s agent, asking if there was anything we could do to help.

Unfortunately, the rules are the rules, and FHA would not insure this particular loan. So what does this have to do with experience and FHA statistics? After this borrower came to our office, we looked at the recent report from FHA…the company that this originator worked for had closed ONE Reverse Mortgage in the first quarter of 2015. They had closed hundreds of “forward mortgages”, but was far from experienced when it came to Reverse Mortgages. An experienced company would have likely encountered this “quirk” in the past, and would have been able to tell the customer it was a problem before she spent a month thinking she was going to be buying a new home with a Reverse Mortgage.

We have come across far too many similar situations in the last 11 years. Be sure that you work with a reputable company with years of experience. Find a Certified Reverse Mortgage Professional and don’t settle until you are working with the best company available to you. Find out why we’re consistently one of the leading Florida-based reverse mortgage providers. Talk to one of our experienced CRMP’s today!

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Reverse Mortgage Research

Mon, 14 Aug 2023 16:54:24 GMT

Reverse Mortgage Research Important

Reverse mortgage research is essential for anyone considering the misunderstood financial product. Many studies have been conducted investigating the uses of a reverse mortgage, as well as the benefits and potential drawbacks. Reverse mortgage research takes time, and it’s important to consider your own personal situation before rushing to a decision. Many people will find the reverse mortgage to be a great fit and good option for their financial plan in retirement. Others will determine they should investigate other options. Take a look at the excellent article written for Reuters last week, “Reverse Mortgages Are Worth a Look, If Approached With Caution.” by Liz Weston.

The author points out that even while CFPB and other regulators are criticizing the lack of clarity in advertising, that reverse mortgage research is being done that supports the use of the product. Economics and finance professors from many universities and organizations have examined the reverse mortgage program closely and devised mutliple strategies for their use. Reverse mortgage research suggests that setting up a standby line of credit with the program can improve the odds of your retirement resources lasting throughout your life. The studies published in the well-respected Journal of Financial Planning have supported the use of a reverse mortgage as a financial planning and retirement planning tool. The author’s have suggested everyone consider a reverse mortgage as an essential part of their planning. Recent reverse mortgage research also suggested that people act now to maximize their potential use of the standby line of credit.

Financial planner’s are using the reverse mortgage and recommending its use much more often than in past years. The excellent analysis and research done by economists and financial professional’s has improved awareness. This is an important step for reverse mortgages, and research suggests that use of the product will increase in coming years. Be sure to do your reverse mortgage research and find out exactly how they can work for you.

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Reverse Mortgage Success Stories

Sun, 13 Aug 2023 20:47:51 GMT

Reverse Mortgage Success Stories

Success Stories- Fox News recently aired a report on reverse mortgage success stories. Bob Massi, The Property Man, acts as a guide to making a smart decision and achieving a reverse mortgage success story! Bob visits with two recent reverse mortgage customers that have very different reasons for tapping their home equity. Both couple found their decision to get the reverse mortgage to be a good one. One couple was actually so pleased that they refinanced the reverse mortgage recently to access additional funds.

The first of the two reverse mortgage success stories discussed in the program interviewed a couple that had done well planning for their retirement. They had significant assets in the stock market as well as equity in their home. When the time came to sell some of their stock portfolio to increase their monthly income they analyzed their options. In their case they decided to put off pulling money from their stock portfolio. In order to make up for the income gap they had, the reverse mortgage was accessed using a 10-year term. They will receive monthly payments from their loan for 10 years. After that time they may have funds available as a line of credit. This is just one of countless ways that reverse mortgage success stories happen.

The second success story interviews a couple that needed to get out from under their monthly mortgage payment. The reverse mortgage allowed them to improve their cashflow. Without having to pay the monthly mortgage payment (but still paying their taxes, insurance and other obligations), the couple was able to succeed in their retirement plan. They even refinanced their reverse mortgage this year to access additional funds which they used to update their home and take a cruise. The reverse mortgage can’t always be refinanced, it depends on many factors including equity available. In this case, the reverse mortgage and reverse mortgage refinance were success stories!

Watch the video from Fox, and then find out how much you may be eligible to borrow by visiting our Reverse Mortgage Calculator . You just may have one of the next reverse mortgage success stories!

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Reverse Mortgage Tenure Payments Improve Retirement Portfolio Success Rate

Sun, 13 Aug 2023 20:45:28 GMT

Leveraging Reverse Mortgage Tenure Payments for a Successful Retirement Portfolio

Reverse Mortgage Tenure: An Overview

What it is: Monthly payments made to the borrower by the lender for the loan's duration.
Recent Trends: Despite being overlooked lately, the Journal of Financial Planning highlights their potential by examining their role as a “Standby Line of Credit” in retirement planning.
Key Finding: Utilizing the standby credit line early can elevate retirement portfolio success rates.

Standby Credit vs. Tenure Payments

The Default Tool: Financial experts have largely favored the standby line of credit when considering reverse mortgages in retirement strategies.
Case Study Insights: The Journal of Retirement showcases a study that emphasizes the value of tenure payments. The study explores multiple financial tactics for a retiree facing cash flow issues:
Current Scenario: A 7.3% withdrawal rate results in a 49% success rate for her portfolio to last throughout retirement.
Proposed Solutions: A 15% spending cut was rejected. Paying off her $200,000 mortgage with an IRA withdrawal lowered her success rate to 33%.
Reverse Mortgage Options: She qualifies for a reverse mortgage that covers her current mortgage with either a $137,000 credit line or $823 monthly tenure payments. The line of credit raises her success rate to 89%. If she chooses tenure payments, her success rate becomes 100%.

Impact and Benefits of the Reverse Mortgage

Portfolio Leverage: Refinancing with a reverse mortgage trims her withdrawal rate from 7.3% to 5.4%.
Financial Gains: The reverse mortgage clears $323,310 in fixed mortgage payments over 30 years and offers a growing portfolio leverage.
Enhanced Cash Flow: Monthly tenure payments or smaller early withdrawals boost the client’s cash flow and diminish the withdrawal rate.
Outcome: Even though the reverse mortgage incurs more monthly charges, her net assets still outweigh the house's value.

Next Steps

Broadened Perspective: To grasp a reverse mortgage’s impact, one must inspect the overall balance sheet, not just the home's decreased value.
For the Consumer: Assess how reverse mortgage tenure payments or a credit line suits your needs with our Reverse Mortgage Calculator or by calling 1-888-340-0305.

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Using Home Equity in Retirement Planning

Sun, 13 Aug 2023 20:40:58 GMT

Six possible strategies for utilizing home equity in retirement planning

Using Home Equity in Retirement Planning

Dr. Wade Pfau, a professor of Retirement Income at the American College and the Director of Retirement Research for the Mclean Asset Group, has published a paper highlighting six possible strategies for utilizing home equity in retirement planning. The reverse mortgage can be used strategically to improve retirement income in retirement, and to improve the likelihood that a person will not outlive their retirement portfolio. Dr. Pfau compares six potential strategies for utilizing a reverse mortgage, comparing possible upside and downside risk to using home equity earlier in retirement, and also considering sequencing risk and it’s potential impact on portfolio longevity.

Recent publications have suggested utilizing home equity by opening a standby line of credit as early as possible and benefiting from the line of credit growth rate. The Journal of Retirement also recently published an article suggesting the use of the reverse mortgage tenure payments as an even more effective retirement income strategy. Dr. Pfau examined seven potential strategies, including six that involved the home equity conversion mortgage (aka reverse mortgage). The strategies included:

Ignoring home equity in the retirement plan
Using home equity as a last resort- open a reverse mortgage line of credit and use it late in retirement
Utlizing home equity first- spend down a reverse mortgage line of credit first and save the retirement portfolio until later
The “sacks and sacks” strategy- spending taken from the reverse mortgage line of credit following years with negative investment portfolio return
The Texas Tech Coordination strategy- analyzing portfolio success rates annually and drawing income from the reverse mortgage line of credit when dictated by the strategy guidelines
Use home equity last- open a reverse mortgage line of credit and allow it to increase with the annual growth rate, using it after the portfolio is exhausted
Reverse mortgage tenure payments- Establishing a monthly tenure payment to supplement income and reduce annual portfolio withdrawal rates

To learn more about these various strategies and to see the final success rates for each scenario, please visit and read Dr. Pfau’s thoughtful paper . To find out how a reverse mortgage might work for you and to learn how much you may qualify to borrow, please visit our Reverse Mortgage Calculator or call us at 1-888-340-0305.

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Reauthorize the Older Americans Act

Sun, 13 Aug 2023 20:37:29 GMT

Reauthorize the Older Americans Act

As members of the National Council on Aging and the National Aging in Place Council, we are strong supporters of the Older Americans Act.

From TheHill.com:

“Enhancing the ability of our nation’s seniors to “age in place” in their own homes and communities has the potential to improve health outcomes and quality of life. It can also reduce preventable healthcare costs and delay the decision by seniors to receive more expensive care in a nursing home or other institutionalized setting. That is why the Senate’s unanimous passage of the Older Americans Act Reauthorization Act of 2015 (S. 192), a key component of any successful national aging-in-place strategy, is such a welcome achievement. The bill is now in the hands of the House of Representatives where swift bipartisan consideration is critical. We encourage Congress to reauthorize this important legislation this year as it marks its 50 ^th anniversary.

Since 1965, the Older Americans Act has provided essential services to our most vulnerable seniors 60 years of age and older. It has created a national aging network that serves an average of 11 million people per year. This network consists of 56 state units on aging, more than 600 area agencies on aging, and over 260 tribal organizations and is supported by tens of thousands of service providers and volunteers. Over a recent 5-year period, the network provided one billion nutritious meals, 130 million rides to essential places such as doctors’ offices, grocery stores, pharmacies, senior centers, and meal sites, and 60 million hours of home care services for older adults. More than 85 percent of recipients of Older Americans Act funded services say this assistance helped them to remain in their homes and communities.”

Please remind your representatives that older Americans are the bedrock of this nation and should be treated with the respect they have earned. Stop delaying and reauthorize the Older Americans Act!

Note: These materials are not endorsed by HUD, FHA, or any government agency.

FHA Home Equity Conversion Mortgage Basics

Sun, 13 Aug 2023 20:34:06 GMT

Wise Reverse Mortgages Can Be the Saving Grace of Unprepared Retirees

Origins of the FHA HECM

Introduced in 1989, the FHA Home Equity Conversion Mortgage (often known as the FHA reverse mortgage) was a collaboration between FHA and Fannie Mae. Their goal was to empower seniors to tap into their home equity without the obligation of monthly mortgage payments. It's crucial to note that homeowners are still responsible for taxes, insurance, association fees, property charges, and maintaining their homes. Any lapses can lead to foreclosure. As the program was being structured, AARP played a vital role in ensuring senior needs were catered for.

Key Features of the FHA HECM

Age Requirement: Borrowers must be 62 years or older.
Tax-Free Funds: The funds acquired are loan proceeds and aren't taxable.
Versatility: These funds can be utilized for any purpose. Whether it's for settling existing mortgages, supplementing retirement income, medical expenses, or even for travel.
Strategic Tool: The reverse mortgage is increasingly seen as a financial strategy for retirement, offering an emergency credit line, instead of accumulating credit card debt.

Points to Remember of the FHA HECM

Regular Statements: Borrowers receive regular statements detailing their loan balance and interest.
Accrued Interest: Unlike traditional mortgages where you repay interest, the interest on a reverse mortgage gets added to your balance, incrementally increasing it.
Sale of Home: If the house is sold, the borrowed amount, including the interest and fees, is paid from the sale proceeds. Any leftover equity remains with the homeowner.
Non-Recourse Loan: If the loan amount surpasses the home's value upon selling, neither the borrower nor the heirs are liable for the excess amount.
Ownership Remains: Even with a reverse mortgage, homeowners retain the title and ownership, similar to a traditional mortgage.

How to Get Started with a FHA HECM

Now that you're acquainted with the essentials, why not use our reverse mortgage calculator to determine your borrowing eligibility? If you have questions or need assistance, we're just a call away at 866-258-0377 .

Note: These materials are not endorsed by HUD, FHA, or any government agency.

Wise Reverse Mortgages Can Be the Saving Grace of Unprepared Retirees

Sat, 12 Aug 2023 19:29:37 GMT

Wise Reverse Mortgages Can Be the Saving Grace of Unprepared Retirees

An excellent article by Dr. Wade Pfau was published by Forbes.com this week, “Wise Reverse Mortgages Can Be the Saving Grace of Unprepared Retirees.” See a preview below and click the read more link at the bottom to see the article in it’s entirety:

“If, after considering other housing options, you have decided to remain in an eligible home or to move into a new home, you may want to consider a Home Equity Conversion Mortgage (HECM) – more commonly known as a reverse mortgage – as a source of retirement income.

The vast majority of reverse mortgages in the United States are HECM reverse mortgages, which are regulated and insured through the federal government by the Department of Housing and Urban Development (HUD) and the Federal Housing Authority (FHA). Other options outside of the federal program pop up occasionally, like jumbo reverse mortgages that exceed federal limits.

The HECM program includes both fixed rate and variable rate loans, though fixed rate loans are uncommon and require the entire allowed credit to be taken as an initial lump-sum amount. We will not concern ourselves with fixed rate loans, only variable rate.

Any discussion of reverse mortgages as a retirement income tool has typically focused on real or perceived negatives related to traditionally high costs and potentially inappropriate uses for these funds. These conversations often include misguided ideas about the homeowner losing the title to their home and hyperbole about the American Dream becoming the American Nightmare. Read More… ”

If you would like to view additional articles and studies that have been conducted on the reverse mortgage program, please visit our Learning Center or call us today at 1-888-340-0305!

“Wise reverse mortgages can be the saving grace of unprepared retirees” is a statement that we agree with wholeheartedly! Please consider your options and let us help you investigate how a reverse mortgage could benefit your financial situation.

Harvard: Reverse mortgages offer solution to U.S. aging in place crisis

Sat, 12 Aug 2023 19:20:04 GMT

Reverse mortgages offer realistic solution to U.S. Aging in Place Crisis

The Joint Center for Housing Studies of Harvard University has published a 98-page document examining housing concerns and solutions for an aging population. As the U.S. population shifts with baby boomers entering retirement age, older homeowner numbers are beginning to increase rapidly. Many homeowners will prefer to live at home and age in place rather than utilize senior and assisted living facilities.

Aging in place comes with unique challenges that need to be considered. Many of these challenges require financial expense, and the reverse mortgage can become a realistic solution that helps to alleviate the burden of these costs. A reverse mortgage may offer the opportunity to enjoy retirement in your own home rather than having to move, according to a recent report published by the Joint Center for Housing Studies of Harvard University.

As the population ages we will see overall lower incomes coupled with increased housing expense, providing an opportunity for the reverse mortgage to be used strategically and to offer a solution for older homeowners. “For those [homeowners] with mortgages they cannot afford but who still have substantial home equity, reverse mortgages may make it more financially feasible to age in place,” the Harvard report states.

Home equity will be the biggest asset of most baby boomers as they proceed through retirement, but the number of people accessing it to stay in their home is still relatively low. “There are a fair number of older adults who have the financial resources to keep up in retirement, but there are more adults with moderate to low funds,” Jen Molinsky, senior research associate at the Harvard Joint Center for Housing Studies and lead author of the report, told Reverse Mortgage Daily.

“Housing wealth can provide a valuable safety net for older households who have exhausted other financial reserves, through second mortgages, reverse mortgages, or home sales,” the report states. “However, survey evidence indicates the use of home equity to finance retirement is seldom an explicit plan.”

Read the entire report at this link , or request a copy by email .