IT MIGHT PAY TO REPAY YOUR REVERSE MORTGAGE LOAN

Some five years ago, having arrived at a decision to spend your retirement years in the home you’d owned for decades, you two made a couple of related, very important choices: First, you applied for a reverse mortgage, using the equity built up in the home itself to finance an upgrade of the heating/cooling system and a bathroom remodel, but also to finance the purchase of a health and wellness center franchise. After successfully operating that business, you’ve just recently accepted an attractive offer to buy out your franchise interest.

When first weighing the pros and cons of the reverse mortgage, you were encouraged by the fact that there was going to be no need to make monthly mortgage payments,* and that there would be no tax on any withdrawals of equity. Now that you are about to come into a sizeable sum of money, you’re wondering whether it will be a good idea to put that cash “back into the house” by voluntarily repaying a large portion of the reverse mortgage loan. 

When you make a voluntary payment into your reverse mortgage account, you increase your available line of credit for any future need that may arise, while reducing the compounding of the interest rate being charged on the loan. Remember, any unused portion of your equity continues to grow at the same rate as that being charge on borrowed funds. 

Rates on reverse mortgages are higher than they were five years ago, so paying down the loan balance limits the amount of equity being consumed by higher interest charges. Repayments mean increasing your borrowing power for future needs. 

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

Equal Housing Lender

THE REVERSE MORTGAGE – THE FINANCIAL PLANNING SWISS ARMY KNIFE

Some five years ago, in an early Shift Into Reverse blog, we addressed head-on the compliance concerns of  financial advisors, underlying their reluctance to discuss with clients products they themselves were not licensed to sell (such as property/casualty insurance, long term care policies – or reverse mortgages. Your function, we suggested to advisors, lies in pointing out the possibility that such products might satisfy a specific need, then recommending that the client seek the advice of a specialist

Today, for both advisors and clients, reverse mortgages have been moving ever-higher on the list of “need-to-know-about” topics. “Over the past 15-20 years, the industry has seen a significant increase in consumer protections,” HECM World explains.”The best originators approach conversations as advisors, positioning themselves around solutions rather than products.” According to the National Reverse Mortgage Lenders Association, reverse mortgages jumped 6.23% in 2025. Why the increase? G. Brian Davis suggests a number of reasons:

• Seniors outnumber children in nearly half of U.S. counties.
• Home prices skyrocketed over the past five years, supercharging many seniors’ home equity.
• Inflation has left many retirees “house rich and cash poor”.
• A slowing labor market has impacted post- retirement income supplementation
• ¾ of senior Americans said they want to age in place, which translates into the need for home modifications to caregivers.

Just some of the many solutions we’ve chronicled in this blog include:

• Mitigating sequence of returns risk for retirees (in case markets drop in the early years of retirement)
  
• Establishing a Growing Line of Credit: The unused portion of a HECM (Home Equity Conversion Mortgage) line of credit grows over time, regardless of home value fluctuations, giving the homeowner access to an expanding emergency fund.
  
• Delaying Social Security: Client can draw on reverse mortgage proceeds to cover living expenses in early retirement years, allowing your Social Security benefits to grow to their maximum potential.
  
• Funding Healthcare & Long-Term Care: Proceeds can be utilized to pay for in-home care, long-term care insurance premiums, or sudden medical expenses.
  
• Financing the tax on a Roth conversion.
  
• Funding for aging-in-place remodeling of property.
• Replacing expensive riders on Long Term Care Insurance.
  
• Funding grandchildren’s education costs or business startups.

As Wade Pfau, PhD, CFA, Professor of Retirement income at the American College of Financial Services notes: “The reverse mortgage option should be viewed as a method for responsible retirees to create liquidity for an otherwise illiquid asset, which in turn can create new options that potentially support a more efficient retirement income strategy (more spending and/or a greater legacy.”

Fact is, the reverse mortgage has developed into a “Swiss army knife” tool that can be used to fill an expanding variety of problem solutions for clients. Ironically, far from diverting client assets, in many cases, the solutions offered through reverse mortgages result in increasing Assets Under Management for the advisors.

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.org

Equal Housing Lender

HOUSING WEALTH ALLAYS FEAR OF “SOCIAL INSECURITY”

Having put quite a bit of thought into planning for your retirement (coming up at the end of this calendar year), the one piece of the puzzle that you’re most hesitant about is the timing of claiming your social security benefit. Your situation is a fairly simple one – divorced, debt-free (both house and car paid for), planning to continue living in your home, do some modest travel, and continue acting in community theater. Neither of your adult children needs or expects your financial support, and you do have a “hybrid” life insurance policy that can help fund long term care should that become necessary. From an income standpoint, there will be some modest pension income from a long-ago employment contract, and you’ve worked out a systematic withdrawal plan from the rollover of your current 401K. (You have a substantial HSA account that will help with medical expenses, and, as an avid do-it-yourselfer, you’ve always been able to handle home maintenance.

The one almost maddening decision that faces you is the timing of claiming social security benefits. Since, upon retirement, you’ll be 65, your so-called Normal Retirement Age won’t come for a couple of years. According to the advice you read, it pays to delay claiming taking benefits until age 70, to “maximize lifetime benefits.” In reasonably good health yourself, it’s the health of the Social Security system you’re worried about. You literally just read the following on Realtor.com: “Social Security could reach insolvency by late 2032 or early 2033…Waiting until age 70 to start collecting Social Security locks in the highest monthly payment, but claiming earlier may help protect against possible cuts.” 

While you’ve obviously devoted careful thought to various aspects of preparing for your upcoming retirement, you might focus on one piece of the puzzle, your housing wealth, and consider using that to counterbalance your concerns about social security, setting up a reverse mortgage line of credit. You can wait until age 70 to claim Social Security benefits. If the “doomsday” predictions of insolvency prove true (which would no doubt mean benefit cuts, not total elimination of Social Security income), you’ll have a backup income-supplementation plan.

Unlike withdrawals from your investments, reverse mortgage distributions are income-tax free.* Meanwhile, the “unborrowed” portion of your housing wealth will be guaranteed to grow, tax-free,* at the same rate of interest as that being charge on the mortgage loan itself.

You’re hardly along in your concerns. As a piece in Fox Business says, “Americans are rethinking when to retire and claim Social Security as longer lifespans collide with uncertainty about the program’s future.” On the positive side, your housing wealth has the power to allay those fears, allowing you to execute your carefully thought-out retirement plan with confidence.

https://mutualreverse.com/david-garrison

*Please consult a tax advisor.

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

Equal Housing Lender

HOME EQUITY MAKES PARTING MORE SWEET THAN SORROW 

Several years after your spouse passed away, you remarried. Hoping to spend the rest of your lives together, your new spouse sold her condo and used the proceeds to completely renovate your home. As part of the process, the home was retitled in both of your names.

Now, with your marriage in the process of ending due to the decision of getting a divorce, you’re more determined than ever to hold onto the one asset that has been part of your life for half a century, your home. Fortunately, your spouse isn’t contesting that decision. She plans to move out of state to be closer to her daughter, and both of you are working to keep the divorce as amicable as possible. You gave it your best shot, but things simply didn’t work out.

The challenge is that most of your investment assets are held in an IRA rollover account, leaving you without enough readily available cash to buy out your spouse’s share of the home’s equity. In addition to the potential tax consequences of liquidating assets, you’ve spent decades carefully building and managing your portfolio with the help of trusted advisors. While you receive moderate pension and Social Security income, you’d prefer not to deplete your cash reserves or short-term investments.

In a situation like this, tapping into your home’s equity might prove to be the best source of funds for your divorce settlement. Once you can document that you are again the sole owner of the property, you may be eligible to obtain a reverse mortgage. The proceeds can then be used to fund the agreed-upon divorce settlement and compensate your former spouse for her investment in the home’s renovations.

Going forward, you would continue to pay property, not real estate taxes and insurance (on the newly appraised value of the home, of course), but there will be no monthly payment due. Any unused portion of your equity will be credited with non-taxable growth at the same rate as that being charged on borrowed funds.

Rather than drawing down your investment portfolio, you would be using a portion of your home’s equity to buy out your former spouse’s interest in the property—allowing you to remain in the home you’ve cherished for decades.

For more information, visit David Garrison’s Reverse Mortgage Resources.

https://mutualreverse.com/david-garrison

Please consult a tax advisor.

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

Equal Housing Lender

USING HOUSING WEALTH TO FUND A SPECIAL SCHOLARSHIP

Now both “officially” retired, you each continue to bring in gig income from personal coaching and speaking engagements. With no children or grandchildren (and therefore no need for extensive living space), you’ve nonetheless made the decision to spend your retirement years in the home you’ve occupied for decades, and which you’ve kept in excellent repair.

Despite the vagaries of the market – and the alarming increase in gasoline prices – you feel pretty well prepared financially going forward.

In fact, you’ve been giving thought to establishing some kind of annual scholarship fund through your alma mater (the university where the two of you met and earned both undergraduate and advanced degrees). The goal is to encourage students to select majors in environmental studies.

While you’re both committed to the concept, there is some concern about tapping your investment portfolio or retirement accounts to maintain the funding requirements years into the future. There is the possibility of using stock you inherited from your own parents as the original donation for the first year. Going forward, though, neither of you is comfortable committing one large upfront sum – you have decided you’d prefer to make this an annual gift.  

Once having funded the first annual scholarship with the stock, going forward, you might consider tapping into your own housing wealth using a reverse mortgage set up as a line of credit. Each year, you can withdraw from that line of credit, tax-free.* (Your tax advisor will verify that you can still qualify for a tax deduction on the contribution to the scholarship fund!) 

You’re rightly concerned about your own financial “safety environment” in future years. Yet using the equity in your home as the scholarship funding source avoids the need for you to tap the investment portfolio or retirement account, all while realizing your dream of encouraging those who’ve chosen the field of environmental studies.

https://mutualreverse.com/david-garrison

*Please consult a tax advisor.

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

Equal Housing Lender

USING HOUSING WEALTH TO HEAT A HOME 

Now that you’re both retired, you’ve begun the process of adapting your home inside and out to better suit your future “aging in place” needs and in general to improve the décor and the front and back yards. Your appliances, HVAC system have all be updated or replaced, You have already installed a charging station for the electric vehicles you purchased. Importantly, all these things have been paid for without any new borrowing or reducing reduce your regular withdrawal plan out of your investment portfolios and IRAs. 

For the past couple of years you have served on the board of your Homeowners’ Association, and one of the neighbors was able to obtain a sufficient number of signatures to petition our board to install solar panels on his home. As a board, you’d invited your HOA attorney to speak. In the course of learning about the cost-saving advantages of going solar, the two of you have become interested in doing that on your own home. You definitely like the idea of reducing costs and tax credits, because, like everyone else you know, the electric bills have moved in only one direction – up. You’ve gotten some tentative quotes on pricing, and it’s obvious this big a project would shake up your finances.  

How best to finance the “conversion” to solar is your financial management dilemma now – would a payment plan be a better course of action rather than a mortgage on the home itself? 

You might consider a reverse mortgage, using the equity you’ve built up in the home to finance the solar panel installation. That way, you’ll be able to take advantage of government and state incentives without the additional costs of an installment plan — and you’ll avoid monthly mortgage payments.* Whatever portion of your housing wealth is not needed for the solar project will grow at the same rate as the interest being charged on the reverse mortgage loan. Until such time as you sell the home, move, or die, neither you nor your heirs will be liable for any part of the loan that exceeds the value of the home.

While you’ll be “helping the Earth” by promoting sustainable energy and fighting climate change, you’ll be effecting a positive long-term change in your own financial picture.

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

Equal Housing Lender

USING HOUSING WEALTH TO FUND PROTECTION PLANS 

Now both fully retired (as of the end of 2025) from your full-time jobs (you continue to each bring in a modest amount in gig income), you’re devoting serious effort towards streamlining your bill-paying and examining your recordkeeping “systems” and reviewing all the different kinds of insurance you have, with the goal of creating a “calendar” of premium payments and of re-assessing coverage. (Together you have homeowner’s insurance with a liability rider. You each have a Medicare supplement, and each is covered by a long-term care insurance policy. As a next step, you’d talked about choosing dental insurance plans.

With more time available now to watch daytime TV, you’ve been struck by the sheer volume of pharmaceutical ads touting one “cure” after the next. In addition, you’ve been seeing commercials about the cost of funerals nowadays, offering prepaid funeral insurance. Now you  intend to research that form of preplanning as well.

Long ago you made the decision to remain in your home after retirement. Given that most of the work to make the place more “age-suitable” has been completed and paid for, from a

budgetary standpoint going forward, it looks as if you have enough “wiggle room” to accommodate all the premium costs for the different kinds of insurance, including the dental and prepaid funeral plans if you move ahead with those. On the other hand, you don’t want to feel squeezed, since these costs are continually rising. 

Since you appear to be seeking “structure” in funding different forms of insurance protection, you might consider using your “housing wealth” as the “protection funding source” in the form of a reverse mortgage set up as a line of credit. Once you have your “calendar” of insurance premiums organized, the equity in your home will begin to serve as the source from which you draw, perhaps quarterly, to pay all the different insurance premiums.

Unlike withdrawals from investment or retirement accounts, those reverse mortgage distributions will be tax-free.* Meanwhile, the “unborrowed” portion of your housing wealth will be guaranteed to grow, tax-free,* at the same rate of interest as that being charged on the mortgage balance itself. Most important, your housing wealth can be the key to “insuring” now and future costs, staying home while staying protected..

https://mutualreverse.com/david-garrison

*Please consult a tax advisor.

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

Equal Housing Lender

USING HOME AS A HAVEN IN FINANCIAL CRISIS TIMES 

“Oil spike drives client calls, tests advisors’ messaging discipline”, Rob Burgess observes in Financial Planning.How true, you cannot help thinking. As a wealth management veteran, you’re spending an increasing percentage of your time reassuring clients, urging them to “stay the course” and avoid upending the careful asset allocation plan you’ve helped them put into place.

“Investor psychology is playing a powerful role in portfolio moves in 2026,” James Royal writes in MarketWise. The market environment is being shaped by volatility, shifting economic signals, and heightened emotional pressure, he adds. While naturally Concerned about promoting any product in which you lack specialized training (or becoming involved in areas not specifically covered by your own broker-dealer’s compliance,

“Financial advisors must pay attention to their client’s home equity, as this is a vital asset that can be used as part of a coordinated strategy to improve retirement outcomes,” Dr. Wade Pfau, PhD, CFA writes. The concept – a reverse mortgage line of credit can serve as a form of insurance to protect against investment losses. 

Looked at as a “buffer asset”, clients’ housing wealth, often a significant element of their net worth, can become the means to their avoiding panic liquidation of investment assets, allowing homeowners to use home equity for tax-free* cash flow rather than withdrawal from their portfolios. 

“Most people operate better in a predictable, stable environment than in a chaotic, uncertain one, “Morey Stettner observes in MarketWatch.”This is not an easy time for advisers because many norms of investing and economics appear to be blowing up.”

Undoubtedly, you tell yourself, these issues will blow over, not blow up. Meanwhile, though, clients’ homes can be havens in financial crisis times.

https://mutualreverse.com/david-garrison

*Please consult a tax advisor. 

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

Equal Housing Lender

HOME WITH A REVERSE MORTGAGE DOES NOT MAKE THE “WORST ASSETS” LIST 

An article you read lately has caused you to rethink your estate plan, which was originally conceived before your wife passed away. What first captured your attention was the Kiplinger article about what assets to leave for one’s heirs. “Let’s face it,” Elaine Silvestrini and David Rodeck point out in Kiplinger, “Certain inheritances can be a tremendous burden on your loved ones.”

Once you began reading more on the subject, you became even more concerned. While timeshares seem to make everyone’s worst-assets-to-inherit list, houses are also listed as problematic, if they require extensive repairs or have large mortgages. “In many cases, beneficiaries assume they can simply sell the property and pocket the proceeds – but when the mortgage balance, property taxes, repairs, or liens exceed the home’s value, there is often little or nothing left after closing”. 

The Plan You Don’t Want to Change

One decision which you’d originally made while your spouse was still alive is one you have no intention of changing, spending the rest of your life in this very home. There is no longer a mortgage, but the place is going to need some repairs and relatively minor alterations to accommodate you as you age. (You’d held off so far, no wanting to go into debt or disturb your investments at an uncertain political time.) Now, reading those articles has started you questioning your plan. While neither of your sons is likely to want to live in the house, you don’t want to leave them with problems settling your estate after your death.

Using Home Equity Without Monthly Mortgage Payments*

Rather than liquidating investments or taking out a second mortgage, you might consider accessing your home equity in a different way—through a reverse mortgage. By using an FHAinsured HECM Adjustable Rate line of credit, you could draw only the funds needed to complete the renovations. You would continue to pay property taxes and homeowners insurance (based on the newly appraised value), but no monthly mortgage payment is required*. Any unused portion of the available credit grows over time at the same rate being charged on borrowed funds—and that growth is nontaxable.

What Your Heirs Can Expect

When the time comes, your heirs are not left with a burden. Instead, they have clear, positive choices:

• Pay off the loan balance (or, if lower, 95% of the home’s appraised value at the time)
• Sell the home, keeping any remaining equity
• Turn the property over to the lender, with no impact on their personal credit
  

One More Important Step: The Conversation

As you weigh your options, this article may also be helpful: New York attorney Neil V. Carbone notes that children are more likely to respect a parent’s wishes when those wishes are explained in person—even if they’re difficult to hear—rather than first learning about them from a will while grieving. A thoughtful conversation with your two sons may help clarify the best path forward.

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

Equal Housing Lender