Reverse Mortgages as Strategic Liquidity
A Reverse Mortgage is a solid resource that can complement your existing financial strategies. while preserving your portfolio and other investments for the future.
- Withdrawals from a 401(k) are a tax burden, whereas accessing the equity in your home provides tax-free* funds.
- Implementing a Reverse Mortgage today creates funds for later, to access when the market is down, or in an emergency.
- Currently, interest rates are great. Allow your revolving Line of Credit to grow with compounded interest.
We can collaborate with your advisors and financial planners to enhance liquidity without negatively impacting retirement assets nor impacting tax structure.
“What is the Difference Between a Reverse Mortgage and a HECM?”
The Home Equity Conversion Mortgage is only available for homeowners 62+. It is FHA-insured, the borrower’s credit score is replaced with a more flexible financial assessment, has non-borrowing spouse protections, can include Manufactured Homes on private land. Meanwhile, the maximum claim amount is $1,249,125.
A Reverse Mortgage is the blanket term that includes other proprietary loans from specific Lenders. Lenders, seeing the benefits of a HECM, designed loans for homeowners who are 55+. They accommodate 600+ FICO scores, offer both fixed- and adjustable-rate options, highlight maximum loan amounts of $4m, and offer 1st and 2nd liens. Although these Reverse Mortgages have tighter requirements, the closing costs are less than a HECM and continue to provide the “non-recourse” feature, which means your heirs will never owe more than the house is worth.
“What Does HECM Stand For?”
HECM stands for Home Equity Conversion Mortgage, and is the only type of Reverse Mortgage insured by the Federal Housing Administration.
“What can I spend the Cash for?”
This is one of the most common concerns in the entire reverse mortgage FAQ. The answer is “Almost anything.” Once the previous mortgage is paid, you can use the money to pay off debts or medical expenses, home renovations, once-in-a-lifetime vacations, savings—almost anything you want! Contractually, a borrower cannot invest in an annuity or in the stock market, but everything else is viable.
“Do Both Spouses Need to be 55?”
No. The older homeowner needs to be 55, and loan proceeds are based on the younger homeowner’s age. The actuary table starts at 18 years old for the younger spouse.
“Do Some Homes Not Qualify for a Reverse Mortgage?”
Vacation homes, secondary residences, and primary residences that include four or more rental units do not qualify for a Reverse Mortgage. For other refinancing options for these properties, please call us directly (760) 579-9519.
More about The Reverse Mortgage Process