One of the main concerns of baby boomers is how to thrive and not just survive in retirement. Experts
say the 4 Keys for retirement success include: Income, Liquidity, Safety and Growth. They also urge
retirees to hedge against longevity risk, stock market risk, inflation, and any real estate market correction. What if there were a product that has been misunderstood and overlooked who meets all of these criteria?
A Misunderstood Product
An FHA reverse mortgage ticks all of these boxes. For those senior homeowners with enough home equity, they can receive monthly installments TAX-FREE. Smart senior homeowners position themselves
to access approximately 50% of their home equity, which is also protected should another real estate market correction occur. It’s possible for those senior homeowners with enough equity to earn a guaranteed annual return of 3-5% compound interest on about half of their equity.
This is a solution that ticks all four of the retirement success boxes recommended by financial planners. 1) A reverse mortgage can provide income in the form of monthly installments. 2) Equity is normally a non-liquid asset, but with a reverse mortgage the largest asset retirees own is now liquid and accessible. 3) A reverse mortgage line of credit is a way to safeguard the asset from market fluctuations. 4) With the guaranteed annual compound interest, reverse mortgage homeowners can grow their assets while other homeowners equity is idle and not earning interest.
Finally, with a reverse mortgage, the responsibility of paying back the mortgage transfers from the
borrower to the home, as it is a non-recourse loan. So, what’s not to love? Tax-free income, unlocking
your home equity, and being able to access it, protection from any real estate market downturn, and
guaranteed growth on your home equity.
What Happens at the End?
And when the last borrower moves out, the house is sold or refinanced and the note is paid off, if the home is overleveraged, a remote possibility, the mortgage insurance kicks in and makes up any shortfall. So, neither the homeowner nor their heirs will ever get a bill or be negatively impacted.
People think it sounds too good to be true, but it is true. Contact me to learn more.