Over the next few weeks, I will be doing a series of articles showing the value of using a reverse mortgage line of credit in retirement planning. As with most financial tools the sooner you start the better the return!
If you, like many baby boomers, purchased or refinanced in your 40s or later and used a 30 year fixed rate mortgage, you will be paying a mortgage into your retirement years. This payment coupled with a common decrease in income during retirement could open you up to foreclosure or unnecessarily selling your home.
The secure future reverse mortgage is a simple plan that overcomes the problem while allowing you to create a line of credit that will give you the comfort and security of liquid assets throughout your retirement years.
To see how it works, take a look at this video:
The line of credit created in this model does not require any extra savings. You simply make the same payment you are presently making on your mortgage.
The benefits:
- The ability to miss or reduce payments. If finances are tight you can reduce the monthly payment or stop making payments. No fear of foreclosure through nonpayment.
- The option to borrow at any time from the line of credit.
- The ability to borrow large amounts, tax-free. No need to be re-approved.
- Insurance against home value decline. If your home’s value goes down, a traditional HELOC can be frozen or cancelled.
- Security against interest rates rising. If they do rise, so does the growth in the Line of Credit.
- Protection from market volatility. If your IRA or 401K tanks with the market, the line of credit can meet needs until it rebounds.
- The security of a government insured line of credit. If the bank fails or the economy crashes the line of credit is still available, even if the line is higher than the home’s value.
