One More Reason to Consider Deferring Social Security Benefits

By: Kelly Daley

November 12, 2026

Rick San Vicente

You’ve probably heard a lot lately about waiting until 70 to claim Social Security. The appeal is simple: the longer you hold off past 62, or past your full retirement age (67 for anyone born in 1960 or later), the bigger your monthly check gets, and that higher amount is locked in.

Of course, it’s a personal call. It depends on how long you expect to live, and even on how much faith you have that the Social Security Administration will keep paying what it’s promised.

A new paper by James Mahaney, posted on the Social Science Research Network (SSRN), points to a benefit of waiting that people don’t talk about much: cost-of-living adjustments (COLAs). Once you start collecting, you get an automatic raise each year based on rising prices. Everyone gets the same percentage, but if you waited, that percentage is applied to a bigger starting number, so your raise is bigger in dollars. Next year’s raise builds on that larger base, and so on, year after year.

In Mahaney’s words, “a retiree who delays to age 70 applies that percentage to a structurally larger base and so captures a larger nominal dollar increase every year for life.” He also describes the value of waiting as “not merely a one-time step-up but a permanent amplification of the only meaningful inflation hedge most retirees will ever own.”

Still, waiting isn’t realistic for everyone, since many people simply can’t afford to go without the income. One option for homeowners 62 and older is a reverse mortgage, whose distributions are tax-free* and could help cover expenses while they hold off on claiming.

A HECM reverse mortgage provides loan proceeds that are generally not taxable* and may be one option to consider for homeowners 62 and older whose budgets are tight, but who see the value of deferring Social Security.

A reverse mortgage is a loan that must be repaid. The loan becomes due when the last borrower sells the home, moves out or passes away. Foreclosure may occur if the borrower fails to meet loan terms, including living in the home and paying property taxes, insurance and maintenance costs. Loan costs vary, and less expensive options may be available. Proceeds may affect eligibility for need-based programs such as SSI and Medicaid. To keep the home when the loan becomes due, the borrower or heirs must repay the loan balance, which may exceed the home’s value.

This article is for informational purposes only and is not financial, tax or Social Security claiming advice.

*Not tax advice. Please consult a tax advisor. A reverse mortgage has costs, interest accrues and the loan balance grows over time, so it’s worth comparing those costs with the added Social Security benefit. A HECM counselor can help you weigh the options. 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.

Richard SanVicente, NMLS ID 647335. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Licensed by the Department of Financial Protection & Innovation under the California Residential Mortgage Lending Act, License 4131356. 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. Phone #: (866) 200-3210. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender #4596821119

Could a Reverse Mortgage Help After the Loss of a Spouse?

By: Kelly Daley

November 3, 2026

Losing a spouse can change nearly every part of daily life, including the household budget. Consider a hypothetical Lafayette homeowner named Barbara, age 74. After her husband passed away, her monthly household income declined from approximately $6,200 to $4,100. She still had a traditional mortgage balance of about $185,000, with a monthly principal and interest payment of approximately $1,450.

Barbara’s home was estimated to be worth $950,000. She had substantial equity, but that equity was not helping her cover groceries, utilities, insurance, home repairs, and the other expenses that continued arriving each month. One possibility she explored was using a reverse mortgage to pay off the existing mortgage. Depending on her eligibility, the property, current interest rates, and program guidelines, eliminating that required mortgage payment could significantly improve her monthly cash flow.

A reverse mortgage would not eliminate all of Barbara’s housing expenses. She would still be responsible for property taxes, homeowners insurance, maintenance, and any applicable HOA charges. The loan balance would also grow over time as interest and mortgage-related charges were added. For Barbara, the important question was not simply, “How much money can I receive?” It was, “Would removing this monthly payment make retirement more manageable?”

Every widow or widower has a different financial picture. Before making a decision, it can be helpful to review income, savings, housing expenses, future repairs, family plans, and how long the homeowner expects to remain in the property. Sometimes the best first step is simply having a comfortable, no-pressure conversation about the available options.

Illustrative scenario only. Names and figures are hypothetical. Eligibility and loan proceeds depend on borrower age, property value, existing liens, current interest rates, financial assessment, property eligibility, and program requirements.

The 40-Year Retirement Dilemma

By: Kelly Daley

Updated: November 2, 2026

Your clients spent 30 years saving for retirement. What if retirement lasts 40?

Consider a client who starts saving at 32 on an $86,000 salary, contributing about $855 a month. At a 7% average return, that client reaches $1 million at 62. By most measures, the accumulation job is done.

The harder job is making that $1 million support a retirement that could last 30 or even 40 years. For homeowner clients, one of the most useful tools for that job is often left out of the plan entirely: home equity.

The 4% Rule Was Built for 30 Years

Under the 4% rule, a $1 million portfolio supports a $40,000 first-year withdrawal, raised each year for inflation. At 2% inflation, that withdrawal reaches $48,760 in year 11, $59,438 in year 21 and $86,590 in year 40. Cumulative withdrawals over 40 years total roughly $2.42 million.

The rule was calculated to a 30-year horizon. Lowering the rate improves durability, but every step down is a real cut in client income:

Initial withdrawal rate	First-year income	Monthly income
3.0%	$30,000	$2,500
3.5%	$35,000	$2,917
4.0%	$40,000	$3,333
4.5%	$45,000	$3,750
5.0%	$50,000	$4,167

Illustrative only; assumes 2% annual inflation increases. Not a guarantee of income or portfolio survival.

The question isn’t how much a client has saved. It’s how much they can safely spend without running out.

Sequence Risk Compounds Over a Longer Horizon

Two clients can earn the same average return and end up in very different places. The one who hits a bear market early in retirement must sell more shares at depressed prices to fund the same spending, and those shares never participate in the recovery.

The usual responses both carry costs: cut spending in a downturn, or keep drawing down a shrinking portfolio. Over a 40-year horizon, neither is attractive. What helps is a source of funds that isn’t correlated with the market.

Home Equity: The Overlooked Retirement Asset

For many clients, the home is one of their largest assets, yet most income plans treat it as an estate asset or a last resort. For homeowners 62 and older, an FHA-insured Home Equity Conversion Mortgage (HECM) can put that equity to work in three distinct ways.

1. A standby line of credit to manage sequence risk

A HECM line of credit gives the client a non-portfolio source of cash. When markets fall, the client draws from the line instead of selling investments, giving the portfolio time to recover. The unused line also grows over time at the loan’s growth rate, which increases borrowing capacity (not home value or equity).

The benefit isn’t more spending. It’s control over which asset to draw from, and when. For clients holding an overly conservative allocation out of fear of volatility, the line may also justify revisiting that allocation.

2. Tenure payments to lower the withdrawal rate

On an adjustable-rate HECM, eligible clients can elect monthly tenure payments for as long as the loan remains in good standing. A $1,000 monthly payment adds $12,000 a year, cutting the portfolio draw needed for $40,000 of spending to $28,000.

Income strategy	Annual portfolio withdrawal	Initial withdrawal rate
Without HECM tenure payments	$40,000	4.0%
With illustrative $1,000/month tenure	$28,000	2.8%

Illustration, not a quote. Actual payments depend on age, home value, interest rates, principal limit and other loan factors.

Tenure payments are borrowed against the home, so the loan balance grows. They should be evaluated as a funding source with a cost, not as free income.

3. Eliminate the required mortgage payment

Many clients enter retirement still carrying a mortgage. A HECM can pay it off, removing the required monthly principal and interest payment.* A $1,500 monthly payment is $18,000 a year, or 1.8 percentage points of withdrawal rate on a $1 million portfolio.

This doesn’t raise income; it lowers the income needed for the same lifestyle. The debt remains and the balance grows as interest and charges accrue, and the client must still pay property taxes, insurance, HOA dues and maintenance.

The Fourth Planning Question

Retirement planning usually centers on three questions: How much should the client save? How should they invest? How much can they safely withdraw?

A fourth deserves equal weight: How can every asset, including the home, be coordinated to make the savings last?

A HECM isn’t right for every client. Costs, interest accrual, reduced equity, property-charge obligations and the impact on heirs all need careful review. But for the right client, each strategy addresses a different problem: the line of credit buffers bad markets, tenure payments lower the withdrawal rate, and a mortgage payoff lowers required spending. They can be used alone or together, subject to available proceeds.

A client retiring at 62 who lives to 102 faces four decades of inflation, market uncertainty and rising healthcare costs. The goal isn’t the largest possible portfolio. It’s a sustainable plan that lets clients enjoy retirement without fearing they’ll outlive their money.

Important HECM Information

A Home Equity Conversion Mortgage is a reverse mortgage insured by the Federal Housing Administration and available to eligible homeowners age 62 or older. Borrowers must meet applicable financial assessment, occupancy, and property requirements. No monthly principal and interest payments* are required while the loan remains in good standing, but interest and applicable fees accrue, increasing the loan balance. Borrowers remain responsible for property taxes, homeowners’ insurance, property maintenance, and other applicable obligations. Failure to meet loan requirements may result in the loan becoming due and payable. A HECM reduces available home equity over time and may affect the amount remaining for heirs.

The examples in this article are hypothetical and do not guarantee investment results, loan proceeds, or retirement portfolio longevity. Consult qualified financial, tax, and legal professionals when evaluating retirement income strategies.

*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.

Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Connecticut Mortgage Lender License ML-1025894. Florida Mortgage Lender Servicer License MLD1827. Maine Supervised Lender License 1025894. Massachusetts Mortgage Broker and Lender License MC1025894. Licensed by the New Hampshire Banking Department, Mortgage Banker License 1025894MB. Licensed by the New Jersey Banking and Insurance Department. New Jersey Residential Mortgage Lender License 1025894. Pennsylvania Mortgage Lender License 72932. Rhode Island Lender License 20163229LL. Rhode Island Loan Broker License 20163230LB. Virginia Mortgage Broker and Lender License, NMLS ID #1025894 (www.nmlsconsumeraccess.org). Subject to credit approval. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. For licensing information, go to:www.nmlsconsumeraccess.org

Equal Housing Lender

Are You SKIing? More Americans Are Choosing Memories Over Inheritance

By: Kelly Daley

October 29, 2026

What if the money you have saved could help you enjoy life today instead of waiting to pass it on?

There is a growing trend called SKI, which stands for “Spending the Kids’ Inheritance.” It has nothing to do with snow or mountains. It is about enjoying the money you have worked hard to earn.

For many Americans, that means traveling more, seeing new places, and making memories with family and friends.

People Are Traveling More and Spending More

According to a recent report from Squaremouth, a travel insurance comparison company, couples over age 65 are spending much more on travel than younger couples.

In fact, the report found that:

Couples over 65 spend an average of $9,960 per trip, compared with $6,618 for couples under 50.
Their vacations last an average of 15 days, compared with 11 days for younger couples.
They plan their trips earlier and are visiting places like Italy, Japan, Greece, and even Antarctica.
Travel among couples over 65 has increased by 3.8% from the previous year.

These are not just weekend getaways. Many people are taking the trips they have dreamed about for years.

Isn’t That What We Worked For?

For years, we have been told to save, save, save. Build your retirement accounts. Pay off your mortgage. Leave something for the children.

Those are good goals. But somewhere along the way, we may have forgotten something important.

Your money is also there to help you enjoy your life.

I am not suggesting that you spend everything or stop planning for the future. Far from it. Having a sound financial plan is important.

But I do believe there needs to be a balance between saving for tomorrow and enjoying today.

After all, what good is having wealth if you never get to enjoy any of it?

What About the Equity in Your Home?

For many homeowners, their house is one of their largest financial assets. Yet much of that wealth remains locked in the home.

I often meet people who have done everything right. They have worked hard, saved money, and built significant equity in their homes. But they hesitate to spend money on the things they would love to do.

That is where home equity can become part of the conversation.

A Home Equity Conversion Mortgage (HECM) may allow homeowners age 62 and older to access some of that equity without having to sell their home or make required monthly principal and interest payments.* They must still pay property taxes, insurance, and maintain the home.

The funds could be used for travel, family experiences, or simply to provide more financial freedom.

It is not the right solution for everyone. But it is an option worth understanding.

A Different Way to Think About Your Money

I have spent more than 23 years helping people understand how home equity can fit into their financial plans.

One thing I have learned is that financial security is not just about how much money you leave behind. It is also about how you live along the way.

Perhaps the question we should be asking is not simply, “How much can I leave my children?”

Maybe we should also ask, “How can I use what I have built to make the most of the years ahead?”

You worked hard for your home. You built the equity.

Turns out you can spend equity.

And maybe even go SKIing!

Source: Squaremouth, travel insurance sales analysis of travel spending and booking trends among couples over age 65, as reported by Rethinking65.

*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. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Connecticut Mortgage Lender License ML-1025894. Florida Mortgage Lender Servicer License MLD1827. Maine Supervised Lender License 1025894. Massachusetts Mortgage Broker and Lender License MC1025894. Licensed by the New Hampshire Banking Department, Mortgage Banker License 1025894MB. Licensed by the New Jersey Banking and Insurance Department. New Jersey Residential Mortgage Lender License 1025894. Pennsylvania Mortgage Lender License 72932. Rhode Island Lender License 20163229LL. Rhode Island Loan Broker License 20163230LB. Virginia Mortgage Broker and Lender License, NMLS ID #1025894 (www.nmlsconsumeraccess.org). Subject to credit approval. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. For licensing information, go to:www.nmlsconsumeraccess.org #4585818628 Equal Housing Lender

The Bank of Mom and Dad: Helping Your Children Without Hurting Your Future

By: Kelly Daley

October 29, 2026

Parents are giving billions of dollars to their grown children. But who is looking out for Mom and Dad?

Being a parent doesn’t end when your children turn 18. And for many families, neither does financial support.

According to a recent report from the U.S. Census Bureau, parents gave $26.6 billion to their adult children in 2024. That money came from 2.6 million parents and helped 3.7 million adult children who were living on their own.

And that doesn’t include the money parents spend helping children who still live at home!

Clearly, the Bank of Mom and Dad is still open for business. And judging by the billions being handed out, it may be getting too big to fail! 😊 The only problem is that unlike a real bank, Mom and Dad don’t have a government bailout waiting if the money runs out.

Why Are Parents Giving So Much?

Life is expensive. Buying a home, raising children, paying off student loans, and keeping up with daily bills can be a challenge.

Many parents want to help their children get ahead.

Sometimes it means helping with a down payment on a home. Other times it might be paying off a credit card, helping with rent, or covering an unexpected bill.

The Census Bureau found that among parents who gave money to adult children living away from home, nearly 73% helped one child. The rest helped two or more.

In fact, the typical parent who gave financial help provided $4,725 during the year.

That is a lot of money, especially for someone living on a fixed income.

But Who Is Taking Care of Mom and Dad?

I have spent more than 23 years helping homeowners plan for their financial future.

One thing I often see is parents who are more worried about their children’s financial needs than their own.

I understand that. We all want our children to do well.

But there is an important question we need to ask.

Can you afford to help your children without putting your own future at risk?

What happens if you need long-term care? What if your living costs keep going up? What if your savings don’t last as long as you hoped?

These are real concerns.

The same Census report found that Americans also gave $20.2 billion in financial help to their parents in 2024.

Money is moving between generations in both directions.

Wouldn’t it be better to have a plan that allows parents to help their children today without needing financial help themselves tomorrow?

Your Home May Hold the Answer

For many Americans, their home is one of their largest financial assets.

They have spent years paying down the mortgage. At the same time, the value of their home may have grown a great deal.

Yet much of that wealth remains tied up in the house.

Many homeowners think of their equity as something they will leave to their children.

But what if some of that equity could help the family today?

A Home Equity Conversion Mortgage (HECM), may offer another option.

For eligible homeowners age 62 and older, a HECM allows them to use part of their home equity without selling their home.

There are no required monthly principal and interest payments. Homeowners must still pay property taxes, insurance, and maintain the home.

The money can be used for many things, including helping children buy a home, paying for family needs, or building a financial safety net.

Of course, there are costs, and the loan balance grows over time. That is why it is important to understand the full picture before making a decision.

An Inheritance Today or Tomorrow?

Here is something worth thinking about.

Many parents hope to leave their home or savings to their children someday.

But their children may need help more today than they will 20 years from now.

Think about a young family trying to buy its first home. A little help with the down payment today might make a big difference in their lives.

Or perhaps a child is struggling with debt. Helping them get back on their feet could change their financial future.

Does that mean you should give away your savings?

Absolutely not.

The goal is to find a way to help your family while making sure you have enough to take care of yourself.

That is where good financial planning comes in.

A Different Way to Think About Home Equity

I believe we need to change the way we think about the wealth in our homes.

For years, we have been taught to pay off the mortgage, build equity, and leave the house to our children.

There is nothing wrong with that.

But home equity can do more than provide an inheritance. It can also help improve your life and, in some cases, the lives of your children.

The key is having a plan that looks at your income, savings, home equity, and future needs.

A HECM is not right for everyone. But understanding how it works may open doors you never knew existed.

After all, you worked hard to build the equity in your home.

Turns out you can spend equity, too.

And perhaps use some of it to help the people you love while you are still here to enjoy seeing the difference it makes.

Source: U.S. Census Bureau, September 30, 2026, Parental Financial Support Does Not End When Children Grow Up, Even After They Move Out, by Liza C. Valle. Based on the 2025 Survey of Income and Program Participation, reporting financial assistance during 2024.

Read the original U.S. Census Bureau report

#313: Retiring into home ownership using a HECM for Purchase

By: Kelly Daley

October 29, 2026

RETIRING INTO HOME OWNERSHIP

Over your forty-plus year career on the road as a corporate trainer and coach, it has never made sense for you to invest in a permanent residence. Now, having officially retired two years ago at age 68, you’ve decided to become an “advanced age first time home buyer” (good fodder for a comedian’s routine, you’re afraid), and, while still accepting limited, local, speaking engagements, you’re ready to “reside in place” (you are not yet ready to apply the word “aging” to your own person!).

As a single with no children, you have been able to accumulate sufficient assets to make a cash purchase of a condo, without disrupting the ongoing support of your active lifestyle and social life. So far, you’ve put off making any withdrawals from your IRA rollover accounts. There is an inheritance coming within the next few years, but you don’t want to wait for that in your purchase.

While it appears you will need to take a sizeable – and taxable – distribution out of your rollover account(s) in order to purchase the condo, you might also consider expanding the price range you can afford, by partially funding the purchase through a HECM (Home Equity Conversion Mortgage). As a 70 year old, the reverse mortgage could provide as much as 40% of the new home value, The pre-qualification process for the HECM will ensure that any purchase offer you make will be treated seriously by the seller, but, even more important, so long as the condo remains your primary residence, there will never be a requirement to make monthly mortgage payments.*

If and when you receive that inheritance you may opt to put that money towards repaying the reverse mortgage loan. If you do choose to make payments, the “restored” (unused) portion of your home equity will grow in a liquid, non-taxable line of credit at the same rate as that being charged on borrowed funds.

In a way, you’d be approaching the “residing in place” process in reverse.

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

#312: Distinguish between two approaches to accessing housing wealth

By: Kelly Daley

October 29, 2026

HOME EQUITY INVESTMENT AND REVERSE MORTGAGE — A WORD PAIR THAT IS NOT SYNONYMOUS

“Does it really matter if you say “jam” or “jelly”, “college” or “university”, “disinterested” or “uninterested”? Jennifer A. Freeman, writing in wordsmarts.com, thinks it does. “Precise language is the mark of a good writer,” she says. For example, universities offer both undergraduate and graduate programs, while colleges usually offer only associate and undergrad degrees.

Precise language is perhaps even more important when it comes to financial products and services. In fact, it’s the responsibility of any advisor to provide clear explanations and detailed documentation, demystifying financial concepts and products, Matthew Jarvis explains in Adviser Perspectives.

Two terms important to differentiate are reverse mortgages and home equity investments. While both are tools offering homeowners an opportunity to access their own housing wealth, the differences between the two can be highly significant for senior homeowners desiring to “age in place”, hoping to spend their remaining years living at home.

Motivations for accessing home equity are varied, of course, with borrowers aiming to satisfy their own cash flow needs, provide help to family members, fund life and health insurance premiums, and achieve charitable giving goals, all without disturbing their portfolio asset allocation or interrupting any system set up for periodic portfolio withdrawals. For all these purposes, the biggest difference between home equity investments (HEIs), and HECM reverse mortgages is what matters – Reverse mortgages are designed for long-term, even life-long stays, with no fixed repayment date so long as borrowers are able to keep occupying the home. In contrast, HEIs have a fixed term. Significantly, there are no “guardrails” in place for the protection of the borrower, ie. State or Federal Regulatory Safeguards.

While there are a number of other significant differences between HEIs and reverse mortgages, the other most significant one has to do with risk. Although interest and fees accrue on a reverse mortgage, by definition it is a non-recourse loan, meaning that the homeowner or his/her heirs cannot owe more than the sale value of the home itself. In contrast, an HEI is not a loan, but a “partnership agreement”, in which the homeowner will owe a percentage of the home’s appreciation from the time the agreement was formed until the end of the period, which might end much sooner than the homeowner’s life

HEIs (Home Equity Investments) and HECMs (Home Equity Conversion Reverse Mortgages) are a word pair that is not synonymous.

https://mutualreverse.com/david-garrison

Housing Lender

#311: Using housing wealth to help niece achieve doctorate

By: Kelly Daley

October 29, 2026

USING HOME EQUITY TO A HIGHER DEGREE

Widowed, and with no children of your own, you have found joy in helping your younger brother, who has very limited means, by contributing towards his one child’s college costs. Highly dedicated to pursuing an advanced degree in aviation engineering, your niece is close to completing her undergraduate work. At a recent visit with you, she proudly reported that she’s been accepted into a coveted graduate training and research program beginning in January. However, she learned, the Grad PLUS federal loan program she’d planned on using (which would have allowed her to borrow the full cost of tuition) has been eliminated for new buyers. With her usual thoroughness, your niece looked into her options under the new Repayment Assistance Plan.

You’re extremely proud that this young woman has been so highly disciplined and thoughtful about money matters, keeping her “eye on the ball” in achieving career goals. You and your late wife were in total agreement about being fiscally responsible. Now, following this new development with the niece, you feel at somewhat of impasse. Your own retirement is planned for the end of next year. With the recent escalation in everyday living costs, you are fearful of jeopardizing your own carefully thought-out income plan. (The basics are in place — you’ve decided to continue living in your home rather than move to a retirement community and in fact have updated the home to make it more aging-in-place-suitable. You’ve been working with your financial advisor on a planned income withdrawal and investment reallocation plan.)

Rather than adjusting your own carefully thought-out retirement income plan, you might consider tapping into your housing wealth in order to help your niece with her advanced education costs. By applying for a government-insured Home Equity Conversion Mortgage, or HECM, you can convert home equity into a source of tax-free* cash. You’d continue to be responsible for property taxes, insurance, and maintenance while using withdrawals from your equity line of credit to help your niece with her costs. There will be no required mortgage payments;** in fact, any unused portion of your equity will grow at the same rate as the interest being charged on the borrowed portion.

Continuing to serve as a good example of fiscal responsibility, you would be using your home equity “to a higher degree”.

https://mutualreverse.com/david-garrison

*Please consult a tax advisor. **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.

Equal Housing Lender

#310: Home equity investments in contrast with reverse mortgages

By: Kelly Daley

October 29, 2026

HOME EQUITY INVESTMENTS AND REVERSE MORTGAGES — UNDERSTAND THE DIFFERENCE

For senior homeowners wishing to gain access to their own housing wealth, a newer financial product gaining some attention is the HEI, or Home Equity Investment, different from a reverse mortgage in several significant ways. A “shared appreciation product”, an HEI lets homeowners get cash out of the equity in their home, but there the similarities seem to end.

Eligible borrowers

HEIs, which are equity-share contracts, not loans, may be issued to younger homeowners; the minimum age for reverse mortgages is 55. Homeowners receive cash today, then owe back that cash plus a percentage of their home’s appreciation (and sometimes a share of existing equity) at settlement.

Repayment timing

Reverse mortgages are designed for long-term stays. In fact, there is no fixed repayment date as long as sale or refinance is mandatory. HEI agreements give the provider a lien against the home equal to a specified percentage of the home’s value (that may be as high as 70%), due at the pre-specified fixed term (whether the homeowner still wants to remain in the home or not. If the homeowner has an existing mortgage, those payments will need to be made (reverse mortgage borrowers have no requirement to make monthly mortgage payments).*

Repayment amount

Although interest and fees accrue on reverse mortgages, most are non-recourse loans, meaning that the homeowner or their heirs can’t owe more than the value of the home when the loan becomes due. In contrast, as the California government consumer protection website explains, an HEI “partnership” may not be equal. “For example, the HEI provider may pay you 10% of your home’s current value but later require you to repay that amount plus 25% of your home’s future appreciation.” That means that if, at the end of the term, the home has appreciated substantially, the homeowner may end up owing a substantially higher loan repayment. But even if the home does not appreciate, an HEI may require homeowners or their heirs to repay much more than the original amount.

Regulation

Reverse mortgages are regulated by the Federal Housing Authority (FHA) and provided by approved lenders. Home equity investments (HEIs) are primarily regulated at the state level, as they are not governed by federal credit laws. If passed, the Home Equity Lending Integrity Act would regulate home equity investment products, including subjecting HEIs to requirements under the Truth in Lending Act.

Accessing their housing wealth, either through an HEI or a HECM reverse mortgage, can help senior homeowners achieve many different financial goals, but it’s important that you help your clients understand how the two options differ in durability and in levels of risk.

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.

Equal Housing Lender