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Financial Professionals

Financial Professionals

Why financial advisors across California are taking a fresh look at reverse mortgages

A reverse mortgage could help your clients 55* and older to effectively leverage an important retirement asset: home equity. Thanks to recent academic research that demonstrates the value of reverse mortgages, they are gaining acceptance as an effective financial tool to help finance a comfortable retirement.

 

Reverse mortgages are flexible and tax-efficient*

Everyone wants more financial control — especially when you’re relying on a fixed income. The flexible payment options of a reverse mortgage can give your clients more control and serve as an excellent risk management tool. Plus, reverse mortgages can help foster portfolio longevity and allow you to retain management of more of your clients’ assets as they age.

As a tax-efficient strategy, clients can use a reverse mortgage to reduce their income taxes by lowering their withdrawals from qualified accounts. Other uses include refinancing a conventional mortgage to eliminate monthly principal and interest payments or using the proceeds of a reverse mortgage to finance the purchase of a “right-sized” home.

Reverse mortgage funds can also be used as a line of credit, allowing your clients to draw on it as needed for expenses such as healthcare costs.

As with any mortgage, your clients must meet their loan obligations, keeping current with property taxes, insurance and maintenance.

 

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Information for illustrative purposes only.

 

 

As a financial professional, you’ll appreciate the unique feature of the reverse mortgage line of credit — the amount available to borrowers grows monthly when left untouched, independent of any change in home value. This provides additional available cash and peace of mind in future years that may prove valuable as savings are depleted.

 

 

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The Retirement Experts Network (REN) is designed for today’s savvy financial advisors, providing useful information on all aspects of holistic retirement planning.

During free monthly webinars, you’ll hear from nationally recognized guest experts on a wide range of retirement topics. Most webinars typically offer continuing education credits to advisors who hold CFP®, RICP®, CLU, ChFC, and CFFP/Kaplan designations. REN also gives you complimentary access to academic and topical resources on financial subjects like Social Security, reverse mortgages, student financial aid and college planning, Medicare, divorce planning and more.



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*Not tax advice. Borrowers should consult a tax professional.
If part of the loan is held in a line of credit upon which the borrower may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on the loan.