For a very long time, the average perception of a borrower for a Reverse mortgage, was someone who was virtually destitute. However, that image has shifted over the last several years, as it as become apparent that many affluent individuals are seeing it as one way to leverage their investment portfolios.
The HuffPost published an article last month that discussed the fact that more wealthy or affluent homeowners are looking into using the Reverse loan for retirement planning. Plus, having a Jumbo Reverse loan that lends up to $2,000,000 has made it possible for those who have “high” value properties, have access to their equity and without the monthly obligation of a mortgage payment.
Here is the first part of the article that I will share in two posts because of it’s length.
HuffPost” Why Reverse Mortgages Make Sense for Affluent Boomers
Posted By Emily Study On July 8, 2015
“Long considered a loan of last resort, reverse mortgages now have their place in financial planning for even the mass affluent, a cohort of 10 million to 15 million baby boomers who have between $750,000 and $2 million of net worth at retirement, according to an article by The Huffington Post.
These homeowners, who could have homes valued at up to $1 million, are likely to see the most reverse mortgage benefits, experts say.
“That’s because it doesn’t take into account the volatility of the securities portfolio of the 401(k) account or the IRA,” the HuffPost writes, noting that drawing from securities portfolios when the market is down can exhaust a person’s retirement funds.
AAG has seen a growing number of wealthier people enjoying the benefits of a reverse mortgage, because they want access to a line of credit in their homes, Paul Fiore, executive vice president, said.
One way the cohort can access that home equity is through a jumbo reverse mortgage, a product that specifically targets affluent Americans with high-value homes by giving them the opportunity to tap into more of their home equity. While the market for the jumbo product is near absent, there remains a huge need for more jumbo loans, especially as reverse mortgages gain a wider acceptance among those outside the industry. ”
The remainder of the article will be in a following post.