For financial planners or retirees seeking greater financial flexibility, a reverse mortgage could be the solution. It can improve cash flow, preserve assets, and offer tax efficiency—key factors in building a strong retirement plan.

What is a Home Equity Conversion Mortgage (HECM)?

A HECM is a federally insured reverse mortgage for homeowners 62 or older, allowing them to convert part of their home equity into cash without monthly mortgage payments. However, property taxes, insurance, and home maintenance must still be covered.

Why Consider a Reverse Mortgage?

• No Monthly Payments: Free up cash by eliminating monthly mortgage payments.
• Improved Cash Flow: Boost income for living expenses or other needs.
• Preservation of Assets: Tap into home equity without draining other savings.
• Tax Efficiency: Funds are not taxable, unlike withdrawals from retirement accounts.

Real-Life Examples

• Case Study 1: A 72-year-old homeowner with a $600,000 property and a $100,000 mortgage used a reverse mortgage to pay off the mortgage, access an additional $110,000, and receive $500/month for life.
• Case Study 2: A retiree with a $1.1 million home and a $500,000 IRA used a reverse mortgage to pay down a $500,000 mortgage, reducing monthly payments and preserving assets.

Flexible Funding Options

• Lump Sum: One-time payment for immediate expenses.
• Monthly Payments: Fixed payments for predictable income.
• Line of Credit: Access funds as needed, growing over time.
• Combination: A mix of options tailored to needs.

Is a Reverse Mortgage Right for You?

A reverse mortgage can help retirees supplement income or assist financial planners in enhancing retirement plans. Consider how it fits with your financial goals and work with a knowledgeable loan officer to explore the best solution.