Forbes: Reverse Mortgage Rules Provide Retirement Security

Reverse mortgages are one way eligible home owners can leverage their home equity to provide a crucial revenue stream in retirement.

And while reverse mortgages aren’t right for everyone, recent changes have made the financial product more appealing, writes Jamie Hopkins in a recent Forbes article

“In April 2015, new rules have been implemented to help prevent previous miscues often associated with reverse mortgages,” he says, adding that a reverse mortgage can be properly utilized to “significantly improve retirement income security.”

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Three different strategic uses of reverse mortgages within a retirement income plan include as a line of credit, to delay claiming Social Security benefits and to exchange debt for income by replacing a traditional mortgage payment with a reverse mortgage. 

“Using a reverse mortgage is no longer just for the cash poor and house rich,” he says. “Instead, reverse mortgages can be used strategically as one part of a retirement income plan designed to build a buffer against sequence of returns risk early in retirement, help defer Social Security benefits or reduce cash outflow from traditional mortgage payments.”

Read the article here.

Written by Cassandra Dowell

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  • I find it interesting that significantly reduced PLF’s over the years (and yes significant when you look at all of them), increased annual MIP, much higher margins than in the past, and now limitations caused by credit and income causing a long scrutinizing application process will all of a sudden get those folks who didn’t need or want a reverse mortgage, and still don’t need one, to all of sudden see how much ‘better’ the program is. I must be missing something…and advise those folks in the business to sharpen their sales skills.

    • reverseguy1234,

      Some of us actually feel guilty telling people that this kind of thing is “true.” All of a sudden it seems I live in the advertising world of Roger O. Thornhill (Cary Grant’s character in North by Northwest) where there is no such thing as a lie, just expedient exaggerations.

      This so called new, safer, and now better HECM has once again proved that when it comes to HECMs it is not the content of our education that counts but rather the comparatives, superlatives, and techniques we use.

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