Extending Retirement Funds

The image of a Reverse loan as one to be used as a very “last resort”, is changing.   Many financial planners are beginning to see the benefit of including a Reverse loan in a client’s retirement plan as a way to extend their portfolio.

With all of the recent changes to the federally insured loan program and the newest options and more protection, the loan has become an excellent option for many people needing additional money and as a way to fund their longevity into the future.

And along with the new Fixed Rate Line of Credit, closing costs have also been reduced and they are no longer as expensive as they were in the past.

Tthe Mortgage Insurance Premium paid to FHA, has dropped from 2.00 %, to .50% as long as the borrower doesn’t exceed the 60% ceiling on the amount of the loan they qualify for as a borrower.  And in some situations, a Lender Credit can be given to the borrower, further reducing the amount needed to fund and close a loan.

Following is a summary of an article that was recently published, discussing the change in the point of view, historically held by the public and professionals.

MarketWatch: Will Reverse Mortgages Grow in Popularity?

Posted By Alyssa Gerace On December 17, 2013 @ 4:35 pm In News,Reverse Mortgage | No Comments

“Reverse mortgages are poised to become a more mainstream financial product in the coming years, with some industry stakeholders expecting a rise in popularity as consumer attitudes shift, says a recent MarketWatch article [1].

Currently, reverse mortgages aren’t popular among clients of Northbrook, Ill.-based financial advisor Steve O’Hara. That’s due in large part to people’s desire to hold onto their housing equity and a common view of the product as a “loan of last resort.”

“If you go up to almost anyone and say ‘Would you or your parents use a reverse mortgage,’ the average senior or heir would say ‘That’s not for me, that’s for someone in a crisis situation,’” Colin Cushman, chief executive of Generation Mortgage, told MarketWatch.
But that may change moving forward—perhaps out of necessity.”

I will share the remaining portion of this article in the next post here on this site.

 

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