Retirement planning perspectives

This series that is intended to provide you a well-rounded, objective overview of reverse mortgages, an element of your financial plan that if implemented properly with thoughtful, proactive planning, has the potential to dramaticalIy improve the odds of your achieving a successful retirement.

What is a reverse mortgage? In the broadest sense, a properly designed reverse mortgage that is utilized appropriately can be a key strategic element in your overall retirement plan.

Reverse mortgages have a relatively short history in the United States, with the federally insured and regulated HECM loan product initiated in the 1980s.

In its short history, mainstream financial media and frankly many financial advisors lack an objective, fact-based understanding of how reverse mortgages function. As a result, certain misconceptions have arisen over the years over how reverse mortgages work, and we will look to briefly tackle each one here:

In our prior posts, we focused on what a reverse mortgage is, and also what a reverse mortgage is not. For this installment, our goal is for you come away with a good understanding of the variety of ways that a reverse mortgage can play a significant role in a thoughtful, strategic retirement income plan and achieving long-term financial success in retirement.

In this post we will provide a short summary of the qualifications needed of the borrower and the property for a reverse mortgage. While there are proprietary reverse mortgage products with different requirements, we will focus on the HECM loan, which as we discussed in prior posts is the federal government insured and regulated loan product, and by far the most utilized reverse mortgage loan.

We hope this series so far has provided you with valuable information regarding what a reverse mortgage is, what it is not, who qualifies, and how it can be a key pillar in your strategic plan for long-term success in retirement.

Beyond how the reverse mortgage can be utilized to achieve retirement goals, which we discussed earlier, in this post we wanted to focus on who is a good candidate for a reverse mortgage, and who perhaps is not.

Welcome back – in this post, part 7 of a 10 part series, our goal is to provide you a good overview of the HECM line of credit, how it works, and how it can be a great tool in your toolbox for long-term retirement planning.

While there are various options in accessing home equity proceeds from a reverse mortgage as we discussed earlier, including lump sum, term and tenure payments, many retirees in their long-term planning do not need immediate access to these funds and prefer to maintain flexibility in accessing those proceeds when needed.

That is where the HECM line of credit can be an ideal choice, whether as the sole form of reverse mortgage or in combination with the other options for accessing home equity proceeds.

Welcome back! In this post we will provide you with an overview of how HECMs can be refinanced or repaid.

For this post, we will cover the costs of the HECM mortgage. While the up front costs are significant, the borrower may choose to finance the large majority of these costs as part of the initial borrowings for the reverse mortgage, and as we will detail, a main reason for the driver of these costs is the non-recourse nature of the loan and protections provided to the borrower for the life of the loan.

We are so glad you joined us for our last installment of this series, where we will touch on the process for obtaining a reverse mortgage.