If you love your home, a Reverse Mortgage might be just what you need

Do you love your home, your neighborhood and your neighbors?

Are you comfortable, and plan to stay put through your retirement years? Does the thought of packing up all of your belongings, hiring a moving company,moving to an unfamiliar house and neighborhood in Orange County sound like more aggravation than you’re ready for?

Reverse mortgage is the common name for the FHA HECM loan, Home Equity Conversion Mortgage. It allows you to convert your home’s equity into an actual asset not subject to the mood swings of the market. Or as I call it “Life Happenings”

We Californians tend to think of our home’s equity as almost a “birthright” and that it will always be there. However, history tells us a different story. The “stagflation” of the 1970s gave way to a nice run up in home values in the 1980s.

Then came “Black Monday”?

On October 19, 1987 the Dow dropped a one day record of 22.6% (508 points), causing many families 401ks and IRAs to bottom out. California home values also took a major hit and dropped by more than 20%. Many of those families had their retirement dreams go up in smoke.

It wasn’t until 1995 that we began to experience a nice recovery period.

By 2005, the economy was rolling again and you probably remember it seemed like your home equity was increasing weekly. By 2006 our stock portfolios and home values had reached all time highs and the outlook for our retirements was bright.

Then in 2007, the Bubble Burst!

The DOW dropped by almost 50% (from 12,000 to 6,200) and not only did retirement accounts take the hit but by 2009 home values decreased by 40%. As a California homeowner who just hit 60, I can tell you that really threw up a major roadblock to my retirement plans.

No one knows for sure what will happen with interest rates or the economy, but I can tell you for sure but they will do one of three things: Things will go up, Things will go down, or Things will stay the same.

In only one out of three of those scenarios will you get better terms on a Reverse Mortgage than you can get today. It’s your money, how much of a gambler are you?

If you love your home, a Reverse Mortgage might be just what you need to stay put and retire comfortably.

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