It’s now generally acceptable to use a Reverse loan for retirement planning as they are safer and more regulated than they were in the past and the old negativity has given way to positive attitudes and their use.
Plus the costs have been greatly reduced and now a “non borrowering” spouse has the ability to remain in the property in the event, the older “borrowering” spouse pre-disceases them. All this is very good news for seniors and the FHA loan program.
All of this has been discussed in the media, but one area that tends to be overlooked are the options that a borrower has in place, as to how they can receive their money.
Most of my clients take funds at the close of Escrow and leave the rest of the money in a Line of Credit. Not only will these funds increase but they will be available after 12 months have passed since the loan closed and funded. And then if they wish to withdraw any more funds, they simply request the amount from their loan servicer.
(But more on “that” in another post.)
One of the options would be to take a payment for life, otherwise known as “tenure”. And, no matter how long the borrower lives or even if they use up all the money that is available to them, that check will keep arriving in their mailbox every, single month.
I’m going to share a lengthy article that talks in more detail about this option. But it’s going to be in several posts and not all in this one.
No one would read it, because it is too long.
New Research Shows Financial Planning Value of Tenure Reverse Mortgages
Posted ByJason OlivaOn March 3, 2016 @ 7:30 pm In HECM,News,Retirement,Reverse Mortgage
“Reverse mortgages have been the subject of much financial planning research over the past few years, the emphasis of which has focused on how these products add to the value of a retirement income plan. While planners have largely focused their research on the line of credit option, few have explored the effectiveness of the reverse mortgage tenure option in the context of financial planning.
Reverse mortgages provide a means to generate more retirement income than can be obtained from retirement savings alone—and the tenure option does so in a direct way, says a recent report published in the Journal of Personal Finance.”
If you wish to read the entire article, click on the following link.