Here are ten situations where a reverse may be a suitable solution.
#1: Retirees with decreased incomes still having to make mortgage payments. The question should be asked “what is your goal in paying off your mortgage?”. Reﬁnancing an existing mortgage to a HECM will free up monthly cash-ﬂow offsetting the impact of reduced income in the homeowner’s retirement years.
#2: Retiring early & wanting to postpone Social Security beneﬁts. Many could beneﬁt by postponing payments until a later age. For example, a 62 year old would see 30% more in their monthly beneﬁt by postponing beneﬁts until age 67. Monthly payments from a HECM can bridge the age gap.
#3: Those living on a meager pension or social security beneﬁt. Enough said here…our traditional needs-based borrower.
#4: Retirees with a nest egg that will not last through retirement. By modestly using a small tenure payment borrowers can reduce their retirement account withdrawals to a level where their money may last their lifetime.
#5: Insurance against a sudden drop in income. Deferred yet growing HECM lines of credit or postponed tenure payments options can help those who would experience the equivalent loss of the smaller Social Security check or reduced pension payments upon the death of a spouse.
#6: Want to buy a home but do not want monthly mortgage payments. Our HECM for Purchase solves this quandary.
#7: Fluctuating incomes. The HECM’s ﬂexible line of credit would allow for strategic withdrawals to offset such a reduction in household income.
#8: Unexpected expenses. Major home repairs, vehicle replacement or medical costs are not uncommon for retirees and the HECM’s line of credit can be a godsend.
#9: Moving in a few years but have need for short term supplemental cash-ﬂow. The adjustable rate HECM with minimum withdrawals may preserve most of their equity for a future sale.
#10: The need for ﬂexible payment options. What other product allows a homeowner to secure a growing, non-revocable line of credit or larger future tenure payments without having to make monthly payments?
These 10 scenarios demonstrate that the HECM is one of the most ﬂexible and valuable assets a retiree may utilize. Each of these potential uses of a HECM requires explanation. Utilizing the wrong version for the right reason or vice versa is easy to stumble into without expert guidance. And there are very few truly knowledgeable professionals out there. The stories I run across about elderly folks being misinformed and misguided are many and scary!
Please run your situation by me. A reverse mortgage may not be the best solution, but let’s find out, OK? Thanks!