Money Matters – Reforms come to reverse mortgages

 Why do I continue extolling the legitimacy of using a Reverse Mortgage as part of one’s retirement planning and implementation?  Simply put – what a reverse mortgage can do for soon to be or actual retirees is allow them to continue to live in the lifestyle that they have become accustomed during their wage earning years by drastically reducing their housing expense. It may even allow them to draw an income per se, i.e. a monthly outlay to supplement their other sources of retirement income.  An equity line can be set up as well where retirees can draw funds whenever they feel the need.  Obviously all of this is based upon home ownership, equity within the home, and one’s age – which is a minimum of 62-years to be able to get a reverse mortgage refinance or even to purchase a home.
Seventy-six million baby boomers, now 52 to 70 years old, are moving into the eligible age for a reverse mortgage thus making them a prime audience for this type of home mortgage.
I will admit that Reverse Mortgages had a trouble history when they first came out of which people now, who know nothing or very little as to how a reverse mortgage actually works, will condemn from the moment the conversation picks up concerning a reverse mortgage.  These are the people that will say publicly they have no need for such an instrument to help them in their retirement but are simply the most ignorant when it comes to how a reverse mortgage can truly benefit/help a retiree in complementing their overall financial retirement portfolio and make their life all that much better. There was no or very little education by the purveyors of reverse mortgages to the consumers.  The advertisements featuring B-grade actors pitching the reverse mortgages being the end all and risk free way to bail oneself out for not saving over the many years one should have been for retirement and the lack of regulation and education by HUD on individuals and/or companies selling this product gave this product a huge negative connotation that still lingers on today. The reverse mortgage of today has been completely redesigned, has lower closing costs, much better regulation, and the consumer now must take a class concerning the whole process. Tighter borrowing limits, stricter financial requirements, stronger spousal protection also have made the reverse mortgages of today a great option for the baby boomers of America.
Some facts:
Among Americans 55 to 64, 55 percent report little to no retirement savings, but 74 percent of those 55 or older own their homes and have substantial equity position which makes a reverse mortgage the logical solution.
For forty percent of all reverse mortgage users the primary reason that they got a reverse mortgage was for extra income to pay for daily living expenses.
Questions to ask yourself first…to decide if a reverse mortgage is for you:
How long to you intend to stay in your house?
Is there any other way to meet your financial needs?
Is this home the right place for you as you get older?
Can you live there if something happens to your spouse?
If you need help answering those questions please feel free to call and speak with Melanie Sedam at The Paseo Financial Group, Inc. at 661.295.2400 #2.You may also learn more at www.ThePaseoGroup.com.
Securities and Investment Advisory Services offered through Financial West Group which is a member FINRA/SIPC. OSJ Office: 4510 E. Thousand Oaks Boulevard, Westlake Village, CA 91362, Phone: 1-866-502-8929 The Paseo Financial Group, Inc. and Financial West Group are unaffiliated companies. The Paseo Financial Group, Inc. encompasses the following companies: The Home Loan Pros – Residential, Investment, & Commercial Real Estate Mortgages; Oak Tree Realty – Residential, Investment, & Commercial Real Estate Sales; and The Financial Services Pros – Investments, Insurance, & Retirement Planning.