financial stability

There Are a lot of Boomers

10,000 Americans each day are turning 62 and few of them have any funds saved for retirement and those that do, are underfunded in their retirement portfolios and they may not have enough funds to protect them as they grow older and face medical expenses due to aging and other unplanned life events.

I feel that the FHA and proprietary reverse loans will become part of everyone’s retirement plan, because a home is a senior’s greatest assist and why not use the equity in it to pay for unplanned expenses and still be able to remain in their home?

Seniors will start to see that by using a reverse loan to assist in funding their retirement as a viable option to protect them from drawing down on their retirement funds too often and also potentially avoid tax consequences such as paying Capital Gains on any withdrawals.

It’s an obvious and safe solution and should not be overlooked by any senior homeowner and they owe it to themselves to consider the loan as a possible solution allowing them to eliminate their concerns, age in place and not be afraid to consider its use as a possible solution to remaining financially secure.

http://reverseloanmoney.com

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A Second Act

Through our youth, most of us were busy either attending college, working or doing both at the same time and thinking about how we wanted a fulfilling life and make piles of money in the process.

Or “not”, maybe you “partied” your way through this period of time.

Then you married, had a family, a mortgage and all the obligations that came with those choices.   Regrets?   Maybe, maybe not.

Once in a while you managed to afford a vacation but the dreams that you may have had when you were young, probably fell away and now are seen as unattainable.   Buried under the responsibilities of marriage, parenthood and the plethora that comes with it, you gave up on the interests you may have been passionate about.

But sometimes in those quiet vulnerable moments, they return.

Years pass quickly and you have no sooner begun your career and profession, when you find yourself on the verge of retirement and without the career you had for years that was your guiding purpose, you find yourself adrift.

Your identity you cultivated over the years, vanished and now you are unsure what the last part of life will be like because it feels empty; there is no purpose…..

And there is the distinct possibility that you won’t have enough funds to retire and will be forced to continue to work well past your retirement years, because you are burdened with a mortgage.

However, you could use the funds from a reverse loan to get out from underneath it and possibly have additional funds in a Line-of-credit and not have any mortgage payments ever, again.

And having this money available to use for any purpose, could open up possibilities to move yourself forward, towards whatever it is you are passionate about and reignite those dreams from long ago.   And begin a very rewarding and satisfying second chapter in your life as a retiree.

And possibly fulfill that dream that you had so many years ago?

Why not?

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Seniors Seeking Additional Money

I have been sharing different ideas in my last couple of posts about the options for a senior if they want to borrower equity out of their home and whether or not they are a good or ideal solution to solve a financial problem or simply wanting extra funds to be available to them for any use.

I’m going to continue this discussion in this post and one more that will follow it in a few days.

In the last couple of days, I talked about the traditional HELOC, the one that every Bank offers to their customers and now  let’s pick up where I left off.

The HELOC will allow interest only payments for the first 5 years, but then will adjust to a much larger payment. Plus, the lender at any time can “freeze” the account and the funds in it will not be available to the borrower.

Too often the borrower is unaware that the loan will be “reset” in the future and if they no longer have the same income as they did when they initiated the transaction, they may not be able to afford the new and higher payment.

Sometimes a senior will use one of these loans for additional income to pay on going expenses, but obviously they will eventually run out of money in the HELOC and of course, will have mortgage payments for the term of the loan.

This can be disastrous for a senior and possibly result in them losing their home through foreclosure if they are unable to afford the payments.

The next possible choice, would be to do a traditional fixed rate 2nd Trust Deed. At least you will know what the payment will be each month, but again the borrower is obligating themselves to a mortgage payment for 15 years and they may not have the income in the future to continue comfortably making the payment each month.

And if they are a senior and or hoping and or planning to retire within a few years, will they be able to afford this obligation every, single month?

So would be the next choice?

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Seniors Are Divorcing

Divorce is always an emotional and difficult experience regardless of the reason or the age of the two individuals who are experiencing this wrenching event in their lives.

Overall the national average of divorcing couples has declined over the years but what is odd, is that it has tripled for those couples over the age of 65 since the 1990’s.

The reasons for senior or “gray’ divorce vary but some of the more common ones is that after raising their children for many years, they began to see themselves as simply parents and no longer friends or lovers.

Then when the adult children leave the home and start their own lives, an older couple may discover that they no longer have any shared interests as they have grown apart over this period of time.

The financial implications of a “gray’ divorce can be quite complicated in that any assets and or retirement funds could end up being liquidated with disastrous consequences for the couple and their future financial stability and security.

I am not a financial advisor and certainly not a Divorce attorney and not qualified to provide any guidance in this matter and it’s best for couples to always seek professional advice when it comes to something as serious as a divorce and splitting up their assets.

However if there is equity in the home, it may be adequate enough to utilize a Reverse mortgage as a tool to either give half of it to one of the divorcing party’s and or buy them out in exchange for the other party receiving any investments they may have accrued together.

But a property settlement would have to be created by their mutual Divorce attorneys to make a final determination as to how all assets are to be divided.

So how would that work?

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Seniors Don’t Want to Sell Their Homes

In my previous post I shared several reasons why seniors might use a Reverse loan and without being redundant, I won’t repeat those reasons in this one.

If a senior homeowner opts to sell their home and not use a Reverse loan for whatever their goals are, here is what must be taken into consideration.

  • Preparing their home for Listing and doing any necessary repairs and or “sprucing” up the property before it goes on the market.
  • The costs for whatever those repairs and cleaning up might be.
  • Agreeing on a Sales price and Broker fee  ( typically 6%) and entering into a Contract.
  • Allowing strangers to walk through your home that can be disruptive and annoying.
  • Cleaning out years of stuff that have accumulated over time and this can be quite “daunting”.

Now, that’s just the business side of selling a home, but what about the emotional and psychological component?

  • Leaving a home that you have loved for many years and is filled with a lifetime of memories.
  • Possibly leaving behind good neighbors, friends and a community that you are comfortable with.
  • Giving up connections to your Doctors and other professionals who’s services you use to assist with your life.
  • Leaving behind a part of “you” that is ingrained in your home and leaving that part of “you” behind for the rest of your life.
  • Grieving over this experience of leaving…..
  • And the serious question;   “Where will I live and how long will the money I receive from the sale of my home, last”?

Sometimes well meaning family members, think that this is the most logical solution for their senior parents.

But is it?

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