(Recommended for professional use only. Not intended for consumers)
There are countless strategies to utilize the equity in your Clients’ homes through the use of today’s HECM (Home Equity Conversion Mortgage). Below are just a few samples.
Maximize Portfolio Value
As clients move into their retirement years, they often face the challenge of fixed income falling short of meeting the increased costs of living and in particular rising health care costs. Very often, social security, dividends and interest, and pension (if any, these days) falls short.
A HECM Line of Credit may be put in place that can be drawn down at times when either, costs of living begin to increase, or the market is declining and portfolio values are eroding.
By following this strategy, your clients’ portfolios will see dramatic results in both maintaining value and extending longevity.
Defer Social Security
There are entire seminars given on the various strategies involving when is the perfect time for your clients to take Social Security? Often overlooked is how the HECM Line of Credit can be utilized to allow your clients to extend out the time to commence taking social security, thereby maximizing the amount of social security they will receive.
Clients are available to apply for the HECM Line of credit once they reach age 62. They would then have a line of credit at their disposal, which they could draw on as they need to help them pay for normal costs of living in their earlier years of retirement.
This would allow them to wait until later years in their retirement to commence the receipt of social security income where the monthly amount they receive could be maximized.
Remember, that amounts drawn down from the HECM Line of Credit are tax free and the equity in the home is in affect making the payments which results in no drain on their cash flow.
Finally, let’s not forget that any amounts not drawn down on the HECM Line of Credit, will grow tax free over time and your clients do not have to go through any subsequent lender approval process.
Right Sizing the Home
Many of your senior clients are looking to right size into a new home. Consider the fact that they will typically sell their existing home and use the proceeds from that home to purchase another home for “cash”. Since they are not able to afford much of a mortgage on fixed income, they will look at homes with a purchase price equal to the amount of cash they realize from the sale of their current home. This may limit the client or shut them out from their number one choice of home to live in due to price range.
Consider recommending a HECM Purchase Mortgage. That is correct. Seniors (62 years of age or older) may purchase their primary home and utilize a Reverse Mortgage Loan. This will allow your client to afford much more home because the cash realized from the sale of their existing home could be used to put down on the purchase of the right sized home and a reverse mortgage could be taken out for the difference for a higher priced, and perhaps more desirable home.
Since the equity in the new home will be absorbing the monthly costs of the mortgage, your client has no drain on their cash flow and will, perhaps, be living in a much more desirable home.
Let’s Work Together
Laurence J. Hope, CPA and President of Cardinal Mortgage Corp., has been in the mortgage business for 30 years and works regularly with financial, legal and elder care specialists in guiding them through the many HECM Retirement Strategies available for their clients.
Larry can be reached by calling toll free 1-888-970-2200 or by email to ljhope@cardinalconnect.com
Services Provided:
- Client-Specific HECM Proposals prepared in 24 hours from request
- HECM Seminars can be scheduled at your office to educate staff and / or clients
THIS AD IS NOT FROM HUD OR FHA AND WAS NOT APPROVED BY HUD OR ANY GOVERNMENT AGENCY
INTENDED FOR PROFESSIONAL USE ONLY AND IS NOT INTENDED FOR USE BY THE CONSUMER
CONSUMERS MUST COMPLETE INDEPENDENT COUNSELING PRIOR TO THE TAKING OF A REVERSE MORTGAGE LOAN APPLICATION
THERE ARE MINIMAL INCOME AND CREDIT REQUIREMENTS NECESSARY TO QUALIFY FOR A REVERSE MORTGAGE LOAN
NO MONTHLY MORTGAGE PAYMENTS ARE REQUIRED, HOWEVER, THE CONSUMER REMAINS RESPONSIBLE FOR THE PAYMENT OF THE PROPERTY TAXES, HOMEOWNERS INSURANCE AND MAINTENANCE FEES, IF APPLICABLE
Laurence James Hope, CPA / President – NMLS ID #67347
Toll Free: 1-888-970-2200 / Office: 914-684-2200 x1357 / Fax: 914-684-2525
