Monthly Archives: February 2020

A lot of your neighbors are taking aim at your American retirement property rights.

We Are Here to Address One of the Most Significant Challenges Facing the Baby Boomer Generation Today…Being Financially Prepared for Your Retirement Years. Funding America’s Retirement is exactly what we had in mind. With a Reverse Mortgage we will assist you in unlocking your equity so you can use it now before others are able to access it, and when you need it to survive.

“I believe your home equity, Medicare and the Social Security System is seen by many well meaning socialists as a way for them to survive retirement using your home equity, Medicare and earned SS retirement. I could be wrong, but I don’t think I am — that has been my focus for more than 15 years and with Mutual of Omaha, I can help you defend yourself almost anywhere in the United States.” says Warren Strycker, Mutual of Omaha Home Equity Retirement Specialist. “Beware the smooth talkers who are taking aim at your American ownership rights.”

“American elders need to defend their Medicare, Social Security and home equity or lose it to well meaning socialists “on the hunt” to confiscate what they own as Americans” says Strycker.

A Reverse Mortgage allows homeowners 62 years of age or older the ability to access the equity and use the proceeds however you choose. The mortgage is a non-recourse loan, which means the homeowner will never be liable for more than the home is worth.

What a HECM Can Help You Do

  • Purchase a new home to fit your lifestyle needs
  • Protect your retirement portfolio
  • Reduce monthly expenses by paying off existing mortgage
  • Reduce monthly expenses by paying debt
  • Enhance your cash flow
  • Incorporate housing wealth into your retirement plan
  • Create an emergency fund
  • Increase cash to help ensure monthly bills are paid
  • Fund for home repairs or upgrades
  • Reduce the burden of out-of-pocket healthcare costs
  • Fund the expense for caregivers, live-in nurses, or other in-home care
  • Have the cash for a large expense, such as a vacation or vehicle
Testing, testing, testing.

A lot of us are in testing — how to keep going and being positive when so much looks the other way. What can we do to protect ourselves and be a positive beacon to others on the roads where we are.

At Mutual of Omaha, I am being onboarded to be strong for those in my age group. Some call it “old”. Old is a state of mind, and I refuse it as a lifestyle.

I bring relief to the folks in my station of life. It is called home equity, and if you have it, you can use it now and be safe from financial ruin.

I have championed this approach for a long time and I have what is called a reverse mortgage which gave me cashflow to get my own financial ship together, paying off a mortgage and supporting my lifestyle.

Now, I offer the same relief to homeowners who can support their own financial plan. Because of the virus, we are asked not to come in physical touch with our prospects and so we won’t.

We have the support of our company to provide Fedex carrier services to and from your location wherever you are in the United States. It is the ultimate service for me.

I hope you’ll take advantage of this offer by receiving my help. Call 928 345-1200 and talk to me as you think this all through.

WASH your hands, look after your neighbors, beware of smooth talkers. BE FEARLESS. I choose to align with a trusted support tradition since 1909. My focus aligns with theirs to help you survive with the use of your rightful American home ownership rights. gofinancial.net/2020/02/truste

I am a friend, if you’ll let me in. Thanks.

20 years serving seniors — since 1999

(…and now, I are one…)

Consider this:

Will Government confiscate HOME EQUITY to aid SOCIAL SECURITY fund shortages?

Most Older Americans Age in their Homes

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Photo of a suburban house

FIELD WORK

Retirees are apparently unpersuaded that it’s a good idea to convert their substantial home equity into some retirement income.

One way to tap this home equity is through state programs that defer older homeowners’ property taxes. The programs are offered in many states, but very few people take advantage of them. Retirees are also skeptical about the benefits of converting their equity into income using a federally insured reverse mortgage: only about 50,000 older homeowners, on average, get them every year.

A big concern is that if they ever sell the house, the back taxes or the reverse mortgage must be paid back – with interest.

But a new study by the Center for Retirement Research finds that this is an unlikely scenario for the majority of retirees, because they rarely move or don’t move at all.

The researchers constructed a picture of how Americans’ living situations change between their 50s and the end of their lives by combining the data for two separate age groups. They matched the households in one group, who were between age 50 and 78, with similar but much older households in the second group and then followed the second group through most of their 90s.

The researchers found that 53 percent of this constructed sample of homeowners never moved out of the house they owned when they were in their early 50s.

Another 17 percent relocated around the time they were retiring and then generally stayed put. Although the households in this group tended to be more educated and better off financially than the people who never moved, both groups ended up with substantially more housing wealth than the people who moved frequently.

The frequent movers – 14 percent of the households in the study – had been through more financial hardships. They were more likely to have just one person in the couple earning money, and they had more children and experienced more unemployment.

The remaining 16 percent illustrate the wild card facing all retirees trying to plan for the future. Medical problems such as dementia or a physical impairment eventually forced many of them to move into a care facility, such as assisted living or a nursing home.

Older Americans overwhelmingly say in surveys that they hope to grow old in their own homes – and their actions back this up.

Their stable homeownership patterns indicate that tapping home equity could be an option for more homeowners, the researchers concluded.

To read the entire study, authored by Alicia H. Munnell, Abigail Walters, Anek Belbase, and Wenliang Hou, see “Are Homeownership Patterns Stable Enough to Tap Home Equity?”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

2 Responses to Most Older Americans Age in their Homes

  1. It is important for this group to proactively make their homes more “age-friendly” by such simple expedients as installing grab bars near the tub/shower, having railings at all outside steps (even just a few), having adequate lighting near inside stairs and removing scatter rugs. Preventing one fall is worth the effort.

  2.  Denise Clark says:

    Yes, but be careful. We are dealing right now with a mother whose home value is underwater due to equity loans (one acquired within the past two weeks!). The bank will be foreclosing within a year since she doesn’t have the income to support the debt load. An FHA reverse mortgage is worthwhile if one qualifies. Read Wade Pfau’s book on the subject for details.

    For discussion of this article, please contact the Go financial publisher and longtime Reverse Mortgage advocate, Warren Strycker, 928 345-1200.

Opinion: How homeowners can use reverse mortgages for retirement income

By Stephen Resch

Published: Feb 10, 2020 1:36 p.m. ET

Here’s when it makes sense to borrow against the value of your house instead of selling

Seniors in the U.S. are sitting on a record $7.19 trillion in housing wealth, according to the National Reverse Mortgage Lenders Association. While not historically part of a well-balanced retirement plan, tapping this home equity can be a cost-effective way to help fund retirement.

In fact, with the Case-Shiller U.S. National Home Price Index at an all-time high, securing access to home equity plays a dual role of generating income and hedging against a potential correction in the housing market.

When seeking additional retirement income, some retirees may seek to downsize, move to an area with a lower cost of living, or use assets from a retirement account. Yet many may not want to sell their home or other investments.

One solution is a reverse mortgage, which offers homeowners over 62 years old (over 60 in some states) flexible ways to use their home equity to help meet retirement goals.

Understanding reverse mortgages

In the past, reverse mortgages were typically a last resort. Today’s reality is drastically different: Homeowners and financial advisers can view a reverse mortgage as part of a holistic retirement plan.

While individual needs and situations differ, one of the key drivers behind a reverse mortgage is to provide an annuity-type payment or to eliminate an existing mortgage payment — both of which increase household cash flow. This additional cash flow can be used to pay for expenses, in-home care or other long-term needs, and to help keep retirement income at a level where assets are not depleted.

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Moreover, a reverse mortgage can provide an alternative revenue source when stock investments are underperforming, so people don’t have to sell stock at reduced values. This “managing the sequencing of returns” dynamic has been well documented by academics and should be a variable in overall retirement thinking.

To be clear, reverse mortgages aren’t suitable for everyone, and a number of important factors need to be taken into account. One key consideration includes how long a potential borrower plans to remain in their home. While many retirees plan on aging in place, one-in-three baby boomers say they intend to move at some point in retirement, and others may consider assisted living or renting rather than owning. For situations like these, shorter-term funding needs may be more effectively met with traditional financing, including HELOCs, due to the costs of securing a reverse mortgage.

Read: Thoughts on simple annuities, reverse mortgages and working in retirement from Jane Bryant Quinn

Of note, interest rates on reverse mortgages can be comparable to traditional mortgages, but there may be substantial closing costs due to the upfront Federal Housing Administration (FHA) mortgage insurance premium. Those costs are 2% of the home value (up to $726,525). So, a home with a value of $500,000 would result in an insurance premium of $10,000. The insurance is what makes some reverse features possible — most notably that there are no required principal or interest payments while living in the home, or that the borrower or heirs will never owe more than the value of the property. When sized up, if these benefits are not of value to the borrower, traditional financing that does not include this insurance premium makes more sense.

For baby boomers who do plan to age in place, a reverse mortgage’s benefits may be of immense value. The cost of insurance amortized over a 20- to 30-year period can be a reasonable value proposition when considering not only those benefits, but others, such as the opportunity to have a line of credit that grows and compounds over time, regardless of what happens to the value of the property. For example, that $10,000 insurance premium, spread over 25 years, equates to just $400 annually (before financing costs).

Reversing misconceptions

Still, misconceptions about reverse mortgages are prevalent, including that the bank owns the house. Just like any other mortgage, the borrower retains title to the property so long as they are honoring the loan obligations including paying property taxes, insurance and maintaining and living in the home.

While it is possible to accrue a substantial amount of debt over the long-term, reverse mortgages are required to be non-recourse loans, which means when the borrower dies and property is sold, the estate will never owe more than the value of the property.

The Home Equity Conversion Mortgage (HECM) — insured by the Federal Housing Administration (FHA) — has a line of credit option whereby available proceeds grow and compound over time. This provides ongoing access to capital, regardless of the value of the property.

With 79% of U.S. baby boomers owning a home, combined with all-time highs in housing prices and home-equity levels, retirees and those nearing retirement now can rethink how to leverage their home to meet retirement goals. Financial planners too can bring reverse mortgages into the retirement toolkit, paying close attention to the trade-offs and risks in using this form of home equity over other options.

Stephen Resch is vice-president of retirement strategies at reverse-mortgage lender Finance of America Reverse.

More: Are you waiting for house prices to drop during the next recession? Why you could have a very a long wait

Plus: This could be the ‘last affordable’ spring home-buying season for a while, Realtor group warns

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For discussion of this article, please contact the Go financial publisher and longtime Reverse Mortgage advocate, Warren Strycker, 928 345-1200.