Reverse Mortgages- a Retirement Solution Whose Time Has Come?

Believe it or not, in the right situation reverse mortgages can be wonderful retirement planning tools. I don’t mean the old kind with abusive rates and terms. I mean the new kind that the U.S. government has blessed as a way to increase the retirement security of millions of Americans. Basically, homeowners who plan to stay in their homes and age in place can tap their equity in three ways: 1) pull out a lump sum to add to their retirement pile now, 2) use the loan to generate lifetime supplemental income, or 3) set up a growing line of credit to use as an emergency fund, a deferred retirement income bucket, or as a cushion in case expenses – or a taste for the high life – increase later in life. There are three important benefits of these reverse mortgages to bear in mind: 1) you never need make any mortgage payments! 2) you or your spouse don’t ever need to pay this kind of mortgage off during your lives so long as you stay in the home, and 3) if the house is worth more than is owed at the second death, the kids get the difference – but it if is worth less than the mortgage at death, the government eats the difference. In essence, these government guaranteed reverse mortgages work as a kind of social welfare program, similar to Social Security. You can get more info at hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten. Whether or not you think this is a good deal for the American taxpayer – and Camarda thinks it’s not – is really not important. What is important is that these products can make a huge difference in the quality of retirement life for millions, and at the same time actually reduce family wealth risk for some Camarda clients and friends. For these reasons, Camarda has become a big proponent, and is actually exploring entering this loan business through its Camarda Consultants affiliate. If you would like more information on whether this could be a good fit for you or someone you care about, please ask your Personal Wealth Advisor to get you more information – Jeff.