October 2023

Why Are ADU’s Popular for Extra Income?

Are you worried about your retirement income? Looking for ways to boost it? If you have heard about the popularity of ADU’s, did you know they can provide extra income as a rental unit on your property?  If you use funds from a reverse loan for its construction, it could be a superior solution for extra income each month and you would not be required to make a monthly payment on your reverse mortgage.

ADUs are secondary housing units that can be added to your existing property, providing you with a valuable source of rental income. Not only do they help address the affordable housing crisis, but they also offer a fantastic opportunity for homeowners to generate extra revenue during retirement.

But what about reverse loans? Reverse loans, also known as reverse mortgages, allow homeowners aged 55 for Jumbo Reverse Loans or aged 62 for the FHA HECM reverse loan or  older, to convert a portion of their home equity into cash. This can serve as a supplemental income source during retirement, enabling homeowners to access the value of their homes without having to sell or move.

With a reverse loan, the borrower continues to own their home and the Lender never takes possession of it.  The Title stays in the name of the borrower, just like on a traditional mortgage.

By combining these two options, you can unlock even more potential for increasing your retirement income.  There could be cash from a reverse loan to build an ADU or use the funds from it to increase monthly cash flow.


What are ADUs?

ADUs are accessory dwelling units that homeowners can add to their property, either as a separate unit to the main house or as a conversion of an existing structure. ADUs are also known as granny flats, backyard cottages, or in-law units. They can be used as a source of rental income, a place for aging parents or adult children to live, or even as a home office or studio.

ADUs are becoming increasingly popular as a means of addressing the affordable housing crisis and as a way for homeowners to generate extra income. They offer a way for homeowners to make the most of their property and take advantage of unused or underutilized space.

ADUs come in different shapes and sizes, depending on the local zoning laws and building regulations. They can be attached or detached to the main house and can range from a small studio apartment to a larger, multi-room unit.

Advantages of building an ADU for retirement income

Adding an ADU to your property can offer many advantages for generating retirement income. Here are some of the benefits of building an ADU:

ADUs can provide homeowners with a valuable source of rental income. By renting out an ADU, homeowners can generate extra income that can help supplement their retirement savings. Depending on the local rental market, an ADU can generate anywhere from a few hundred to a few thousand dollars per month.


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Misinformation About Reverse Mortgages

The word “misinformation” is used regularly by the news media, political figures, various social groups, and everyone claims they are sharing the truth about what is happening in our communities and countries.

Citizens are questioning the traditional sources of news and harbor doubts about what is accurate, true, a distortion, or a myth.   It is confusing and creates anxiety and a sense of helplessness.

Misinformation has distorted the truth about reverse mortgage for many years.  So much so, the distortions continue to circulate with older adults and their children and because of their unfounded beliefs, would never consider using one to have funds for care giving, or to eliminate and ongoing mortgage payment.


Unfortunately, many Financial Advisors remain uninformed and embrace many of the same beliefs and would never consider their use for a client.   But what if their client is withdrawing funds from their investments to pay for a mortgage, medical costs, home repair, care giving fees?

And they liquidate their investments?  “poof”.   And their Advisor just lost a client due to poor financial advice.

Before anyone “writes off” considering using a reverse loan, Do the HUD Counseling and don’t ask for advice from your friends, neighbors, hairdresser, or doctor.   They are not qualified to answer your q uestions.

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Home Maintenance Costs vs Medical Bills

As we age, our homes become sanctuary and shelter, but they also become a financial responsibility. ??

It’s a tough question: are older homeowners burdened more by mounting medical bills or the constant need for home repairs and maintenance? Let’s dive deeper into this topic to shed some light on the hidden costs that our senior homeowners may have to face as they age.

Medical Bills: The Silent Strain 

As we age, health becomes a top priority, but so does the price tag that comes with it. Prescription medications, doctor visits, and unexpected medical emergencies can quickly drain finances. It’s no secret that medical bills often take a significant chunk out of older Americans’ fixed incomes.

 Home Repairs and Maintenance: The Unseen Outlay

On the other hand, our homes also demand attention, care, and occasional repairs. From leaky roofs to faulty plumbing or outdated electrical systems, the cost of maintaining a home can be overwhelming. For older homeowners on fixed incomes, these expenses can sometimes feel like a never-ending cycle that chips away at their financial stability.


Likewise, the same principle applies to our older homeowners. If they can’t afford to tackle necessary repairs and maintenance, the consequences can be far more severe.

By investing in preventative maintenance and timely repairs, older homeowners can mitigate potential risks and avoid the costly domino effect that neglecting their homes can bring. It’s a long-term investment that can safeguard their fixed incomes and overall well-being.

Many older homeowners will utilize funds from a reverse loan for costly home repairs, but also for home improvement and modifications to make their home safer and functional as they age and remain in their home.

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Fear and Procrastination

The Relationship Between Procrastination and Stress

Procrastination not only affects our finances but also has a significant impact on our mental and emotional well-being. Delayed decision-making can lead to increased stress levels and a sense of being overwhelmed.

When we procrastinate, we often feel a constant nagging in the back of our minds. We know we have a decision to make or a task to complete, but we keep putting it off. This constant state of uncertainty and inaction can lead to anxiety and stress.

Additionally, as the deadline for making a decision or completing a task approaches, the stress intensifies. We may find ourselves rushing to finish at the last minute, which can result in subpar results or mistakes. This creates a cycle of stress and poor performance, further reinforcing the negative effects of procrastination.


Furthermore, procrastination can hinder our personal growth. By delaying important decisions, we miss out on opportunities for improving our lives. Whether it’s making  or addressing a difficult situation, delaying action can prevent us from solving a problem and enjoying our lives without worry.

In summary, procrastination can lead to increased stress levels, hinder personal growth, and create a cycle of anxiety and poor performance. It’s crucial to recognize the negative impact of delayed decision-making on our mental and emotional well-being and take steps to break free from a habit that keeps us stuck.

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