The New Reverse Mortgage perfect for wealthy homeowners
Even though the New Reverse Mortgage was not designed for wealthy homeowners, there are countless homeowners whose homes are valued at over $1 million are finding that it can be a an important part of their retirement planning.
Will the New Reverse Mortgage improve your lifestyle?
According to The Mortgage Professor: “The key question, which is the same for all senior homeowners, is whether the withdrawable amount that is available on the owner’s house can make a significant difference in your lifestyle.
If the answer is “yes”, the case for the HECM is as strong when the house is worth $1 million as when it is worth considerably less. The reason is that the owner of a pricey house, who has excess equity upon entering the program, will retain it when leaving the program, whether by selling the home, moving out of it permanently, or dying”, but still have use of the equity if needed.
Related: 25 ways to use your home equity
Give your retirement portfolio a boost
Just getting rid of your mortgage payment can give a huge boost to your retirement portfolio. If you’re like most Californians the equity in your home is your most valuable asset and getting rid of any debt associated with it might be a smart financial move which is also good for your cash flow.
Protection in case of another housing bubble
If you’ve owned your California home for more than 20 years you’ve seen some really violent mood swings in home values. As recently as 2009, luxury home values declined by 50% and if you need to access your equity when/if another of these “bubbles” occurs you may not be able to. That’s where the growth factor of the HECM can guarantee funds regardless of current market conditions.
Guaranteed growth factor even with another bubble
The line of credit feature guaranteed growth above your current interest rate regardless of current economic conditions. Imagine being able to see your children and grandchildren enjoying their legacy gifts even though your home lost most of its equity in an economic downturn.
Related: Because everyone needs a Plan B
Customize your New Reverse Mortgage
No two seniors, of course, are exactly alike, and each requires a plan that is hand-tailored to their needs, their preferences and their outlook.
The New Reverse Mortgage isn’t for everyone…but it could be!
If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.
Some of this information first appeared on themortgageprofessor.com