Monthly Archives: December 2016

How large is your mortgage “bite” in the household “apple”

As the years go on, more seniors are entering retirement with home mortgage payments.

Soon, if not eventually, they become a burden.

How large is your mortgage “bite” in the household “apple”?

New research now points to an increase of baby boomers entering retirement with house payments. Consider what a HECM mortgage can do to free up household budget by eliminating the mortgage payments you have. Ask for a free look at the mortgage “pie” by requesting a HECM ANALYSIS here. See navigation bar tab “information” for contact details.

CONSIDER:

Paying off the mortgage, once a widespread rite of passage for homeowners approaching retirement, has become less common in recent years. Concerns are mounting that the increased prevalence of housing debt among older homeowners could compromise financial security in retirement by expanding housing affordability problems, crimping essential non-housing spending, increasing vulnerability to home loss through foreclosure, or limiting the accumulation of housing wealth.

These concerns are amplified by the fact that the large Baby Boomer generation, which includes about 33 million owner occupants, has begun to reach retirement age. Although multiple studies have documented the rise of housing debt among older homeowners, prior research has not focused on how Boomers’ mortgage status has changed as they’ve approached retirement age. Importantly, previous research has not investigated whether Boomer homeowners have begun to extinguish their housing debts more rapidly as the economy and housing market have emerged from recession.

The leading edge of the large Baby Boom generation has reached retirement age with a greater likelihood of carrying housing debt, raising concerns about the retirement financial security. The oldest Boomers, who were aged 65-69 in2015, were 10 percentage points less likely to own their homes outright than were pre-Boomer homeowners of the same age in 2000.

Enter the innovative Home Equity Conversion Mortgage (or HECM), a mechanism for eliminating the payments without payments, utilizing home equity to fill the income gap.

We can make this happen for you if you are 62 or more, have 50% (or more) home equity and the desire to free yourself from these menacing payments.

See contact information in navigation bar for details.

 

Home Equity HECMs Protect Women’s Retirement Choices

Due to the fact that women live longer than men and that women still are only making 79 cents for every dollar men make, they have a more difficult time achieving retirement security. Even with statistics not in their favor, women do still have options when it comes to financially securing themselves as they age.

The first step is to get a financial plan together as early as possible, Jocelyn Wright, director of The American College State Farm Center for Women and Financial Services and assistant professor of women’s studies, said in a recent webinar hosted by the American Society on Aging and sponsored by the National Reverse Mortgage Lenders Association (NRMLA).

And part of that financial plan could include a reverse mortgage, Wright points out.

There are major life events that a large portion of older women go through, which include divorce and becoming a widow. These two life events are tough enough to get through, but they also can derail retirement savings.

One way women can get through these life events and other events similar to them is by tapping into their home equity through a reverse mortgage, Lorraine Geraci, vice president of the training division at Finance of America Reverse (FAR), explained during the webinar.

“I feel it’s imperative that we collectively provide choices to assist older adult women by sustaining financial longevity and establishing peace of mind,” Geraci said.

Obtaining a reverse mortgage will not play out the same for each woman nor will each woman use a reverse mortgage in the same way.

There are many different strategies when it comes to figuring out how to use a reverse mortgage to its fullest potential. The first step is to choose between a fixed rate and an adjustable rate home equity conversion mortgage (HECM), Geraci shared.

“An adjustable rate HECM is similar to a home equity loan line of credit except that amount of line of credit is accessible to them whenever they want and also grows while it’s in the credit line, which can increase the amount of equity available to the borrower as times goes on,” she said.

Once the borrower has chosen either a fixed rate or adjustable rate HECM, setting a strategy should be addressed next. A strategy could be anything from using the proceeds to manage long-term care payments, social security planning, income planning or to purchase a new home altogether.

“There’s a lot of folks in the baby boomer generation who would like to move to a different location and with the HECM for purchase program, they can have that option,” Geraci said.

These strategies, if implemented correctly, can change the financial situation for women who do not have an adequate amount of retirement savings and can also help them age in place.

For those new to the idea of a Reverse Mortgage, we call it a HECM to more specifically define it, please consider the magnitude of the information on this page and then call Warren Strycker for additional information, an analysis of your own opportunity and followup through the process. Call 928 345-1200 in Arizona warren.strycker@patriotlendingusa.com