KEEPING HOUSING AND INVESTMENT WEALTH IN THE BALANCE
Following your retirement (yours six years ago, your husband’s a year later), you used a little over half your reverse mortgage line of credit to “outfit” your home for the long haul of “aging in place”. With that big project completed, you have not found the need to tap the line of credit any further.
Meanwhile, given the crazy ride in the investment markets over the past few months, you are starting to be concerned about the possibility of further drops in the value of your accounts. And while receipt of some higher-than expected consulting “gig” income would have made it possible to “rebalance” your portfolio by adding funds to equities, you’ve decided you’re not comfortable doing that.
While avoiding any comment on your portfolio allocation strategy, have you considered using the “unexpected” consulting income to “invest” in your own reverse mortgage? Since interest rates on CDs and, money market accounts are still quite low, you might enhance your “fixed income” return by putting the money back into your own “account”, by making voluntary by repayments of your reverse mortgage loan.
As you pointed out earlier, your reverse mortgage has turned your housing wealth into a “revolving line of credit, and making voluntary payments is a way to “grow” the “equity” portion of your overall asset holdings without actually purchasing more stock. (You might also consult your tax advisor about whether you could qualify for an interest deduction if and when you make a large payment on your reverse mortgage.)
Thinking of your total assets (not only your investment assets) as your “portfolio”, you can keep your housing wealth and your investment wealth “in balance”.
https://mutualreverse.com/david-garrison
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.orgEqual Housing Lender