MADE THE BIG HOUSING DECISION? FUND THE LITTLER ONES WITH HOUSING WEALTH
“Ask yourself the uncomfortable but clarifying question: If someone forced you to do the right thing tomorrow, would I know exactly what that is?” If the answer is no, Pete the Planner says, you have a mechanics problem. If the answer is yes, but you still don’t do it, you have a behavior problem.” In his Indianapolis Business Journal column, Peter Davis is talking about managing one’s financial affairs.
When it comes to retirement planning, the two of you, it is clear, have had no trouble knowing that the “right thing” for you is going to be “aging in place” rather than leaving the home you love and moving into a retirement community, either now (you’re both in your late 60s) or later. The “behavioral” challenges you face involve finding the financial resources to remodel the home and grounds in ways that will improve the safety and navigability of your environment, without a) triggering tax on the sale of investments or b) incurring long-term debt repayment obligations.
Setting up a government backed reverse mortgage or HECM will allow you to access the equity built up in your home, using your “housing wealth” to fund the adaptations needed to make your environment aging-in-place suitable. Importantly, while that housing wealth functions as a line of credit for you, unlike the way a “forward mortgage” would function, there will be no obligation to make monthly mortgage payments* on your reverse mortgage loan, and therefore no need to tap into your investment portfolio. In fact, any unused portion of your home equity would continue to grow at the same rate as that being charged on borrowed funds.
With no “mechanics problem” (you were able to make a key retirement planning decision – to remain in your home), you’ll be using your housing wealth to prepare your future living environment, making wise “behavioral” choices.
https://mutualreverse.com/david-garrison
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. 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.org
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