2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

Yours is a story of senior dating site success – after nine years of widowhood, at age 66, you’ve met the person with whom you plan to spend the remaining years of your life. A family-and-close- friends-only wedding is planned for later this summer. Your fiancé, who is 60 and still working full-time, has sold his condo and moved into your house. Within your first year together,the plan is to do some major remodeling in order to better accommodate a carpentry workshop for him, while also expanding your yoga space and art studio.

Fortunately, the two of you have been able to openly discuss financial and legal matters,and have executed a pre-nuptial agreement. Each of you has investments, with the greater portion of his tied up in retirement accounts. You are receiving social security income and drawing regularly from both your IRA and from your other investment accounts. The plan is for you to retain full ownership of the home, with the stipulation that, should you predecease him, your husband will be able to choose to continue living in the home until his death. (Your decision on this matter comes from the fact his Long Term Care policy covers at-home care in addition to facility care.) The two of you are planning to share the remodeling expenses.

A reverse mortgage can provide funding for several of the wonderful plans you describe setting up a government-backed HECM loan will allow you to use the equity built up in your home to fund your share of the remodeling expense, without compromising the accounts on which you rely for regular income.

Although you would be the only borrower (since your spouse is under age 62, he would not qualify as a borrower), the reverse mortgage would ensure his right to remain in the home for the rest of his life. . It is statistically probable, as you’ve realized, that your second husband will outlive you. Important to realize is that, after your death, your husband would not be allowed to draw on the reverse mortgage line of credit, but would continue to be responsible for keeping up the maintenance and taxes on the home.

Not only is yours a story of senior dating success, but your story show how housing wealth can be used to financially launch that second start!.

https://mutualreverse.com/david-garrison/

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

It’s a good time to sell a home in Indiana, as you and your friends were discussing just the other day. “List on Thursday and have multiple offers by Sunday,” your newspaper reported recently.

You hate to miss out on such a selling bonanza, but the two of you haven’t the slightest interest in moving. What you had been discussing is taking out a second mortgage in the form of a line of credit, perhaps also refinancing your basic mortgage (now scheduled to be paid in full by the time you retire).

Your general plan – lock in today’s low interest rates on the basic mortgage, then work to get it completely paid off within the originally planned three year time frame. Meanwhile, you reason, the home equity line of credit would serve as a backup “reserve fund” to help you transition into retirement.

Good thinking, but you might be ignoring another option, which is trading your forward mortgage for a reverse. As with a forward loan, you would be taking advantage of the increased “wealth” in home equity produced by the housing “boom”. And, in keeping with your original plan, you would continue to make monthly mortgage payments.

Big difference is – with a reverse mortgage, not only could your mortgage balance be paid off in approximately the same length of time as you had planned for the traditional mortgage, but in the process of making payments, you’d be funding your own future “Line of Credit”.

Consider this: Putting your borrowing strategy into “reverse gear” means allowing your housing wealth to function as a natural “backup plan”.

*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.

https://mutualreverse.com/david-garrison/

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

You’re the proverbial “ducks-in-a-row” type, and you’ve already begun to plan for your retirement four years from now (which is when you first become eligible for full Social Security benefits). One big piece of the puzzle is your home, two and a half years away from being mortgage-free.

You’ve refused multiple offers to purchase this house from you, but your intention is to continue to occupy it, hopefully for the rest of your life. Widowed for over a decade, you have a steady companion who lives in a neighboring state. While you enjoy traveling together and spending time in each other’s homes, you’ve concluded it will be best for both you and him to keep permanent residency in your present locations.

As one piece of your own retirement plan, you have decided to take out a reverse mortgage on your home, set up as a line of credit to fund any serious future medical costs. (While you plan to keep up with the premiums on the long term care insurance you purchased some eight years ago, the policy does not cover home health care.) The question with which you are now wrestling is whether to establish the mortgage loan today or to wait until your retirement date is imminent.

It’s apparent that you are giving careful thought to each of your retirement planning decisions. There is no one “best” time to apply for a reverse mortgage on your home, but there are a number of factors you might consider. First, home values (as you’ve learned from the multiple, unsolicited offers you’ve received on your own home) are at record highs, meaning that your equity or “housing wealth” is at a premium. Were home values to decline in the future, establishing a reverse mortgage today would be a way of “locking in” the present value of your equity. Additionally, today’s low interest rates are providing the highest principal limits (think Home Equity Line of Credit size) in years.

Remember, too, that, should interest rates rise from today’s record lows, the unused portion of your Home Equity Line of Credit would have growth matching that increased interest rate, in essence building up your “healthcare slush fund”.

In counting down towards retirement, a reverse mortgage could be a way to make your housing wealth – count!

https://mutualreverse.com/david-garrison/

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

In this, your fifth year of “semi-retirement” following 40+ year careers in the private education system, the two of you have decided to spend all winter months in sunny…to be decided (probably the Florida Panhandle where several friends live). Because most of the younger members of your extended family are located here in Hoosierland, you plan to continue using your Indiana house as home base (hopefully for the rest of your lives).

This winter, as has been true for the past several years, you’ll be staying in a rented condo, but going forward, you realize it makes more sense to own a modest winter residence. To help finance the purchase, you could increase the part-time consulting work that helps augment your retirement income, since that work can be done from anywhere. Still, an outright property purchase would force you to dig into your retirement assets, something you are reluctant to do.

A reverse mortgage might help speed your path towards acquiring a second home in that sunny TBD place. A reverse mortgage refinance can help homeowners purchase new homes using the equity in their “home base” property. Assuming you’ve built sufficient equity in your Indiana home to finance the purchase of the winter home, there might be no need dig into your retirement assets; no mortgage payments would be mandated.

You would, of course, continue to be responsible for property taxes, homeowners insurance, and home maintenance costs on your Indiana residence. Meanwhile, your consulting income could go towards financing the maintenance costs and taxes on the second property. Important to realize is that, under a reverse mortgage, you will need to occupy your Indiana property more than six months out of each year.

To be determined…will a reverse mortgage help you make “snow-birding”your new retirement reality?

https://mutualreverse.com/david-garrison/

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

You’ve both been employed at the same company (in different departments) for the past nineteen years. Events of the past year and a half have gotten you thinking about retiring sooner than originally planned, possibly at the end of first quarter 2022. One big concern is health insurance, because you won’t turn 65 until December 2022; your wife not until February of the following year. Because you’re not yet prepared to let the company know your plans, you’ve avoided talking to HR about options, instead reading up on your own about COBRA.

Relevant information you’ve gathered: a) Although you plan to wait until you each reach Normal Retirement Age to apply for Social Security, you will each be eligible to collect Medicare beginning at age 65. b) You plan to extend the coverage you have through your employer by enrolling in COBRA. c) You understand that you’ll need to pay not only the premium amounts that are being deducted from your paychecks, but the employer share as well and possibly a markup by the insurance company. (You realize you could enroll in a Marketplace plan, but believe the employer plan is better if you can afford the cost.) Meanwhile, your Long-Term Care insurance company has just notified you of an increase in premiums, beginning this November.

Post retirement, each of you plans to supplement your income with consulting gigs done through a friend, himself a retiree in your field. A regular draw out of your investment and retirement accounts, combined with income from this free lance work should be sufficient to maintain your lifestyle. Your home mortgage should be paid off by the end of 2022, which will make things easier on the budget. The concern is this “interim period” between full time income – and full Social Security eligibility.

Consider using a reverse mortgage to make your transition into an earlier-than-planned retirement less of a financial strain, tapping your housing wealth to bridge the income “gap” as your regular paychecks stop coming. With a Home Equity Conversion Mortgage, you can draw cash to pay these interim costs, all while relieved of the need to make mortgage payments or draw down your investment accounts in the early years of retirement.

A reverse mortgage can bridge the COBRA-to-Medicare Gap.

*Not intended as financial planning advice. Please consult a financial analyst.

https://mutualreverse.com/david-garrison/

An alternative approach to consider involves “swapping” your forward mortgage for a reverse mortgage, then continuing to make the same payment you had been making on the existing mortgage. In approximately the same time as would have been true on your existing mortgage (minus the accelerated payment plan), you will have the mortgage balance paid off.

The difference? With a reverse, every payment you make will go into growing a line of credit capable of producing tax free withdrawals when needed in future years (without you ever needing to re-establish credit or qualify for a new loan).

Gearing up for retirement by “paying ahead” is a noble resolution, but, over your retirement years, there might be greater potential for financial flexibility if you pay ahead in reverse!

*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.

https://mutualreverse.com/david-garrison/

There are actually several reasons you might consider refinancing your reverse mortgage, with perhaps the most important being that your husband is now over age 62. As a co-borrower, should you either need to move out of the home into a care facility (or die before he does), your husband would be able to access the line of credit on the reverse mortgage. (While non-borrowing spouses are guaranteed the right to remain in the home, they have no access to the line of credit.)

The fact that both of you are now older is itself a factor in favor of a refinance, increasing the available funds available for withdrawal (either as a monthly payment or as a line of credit.

In the same manner as your neighbors, who are motivated to refinance their homes by the two factors of interest rates having fallen and home prices having increased, you can consider those factors in deciding to refinance your reverse mortgage.

Three years have passed. You’re older. The value of your home has probably increased significantly. Interest rates are lower. All these points indicate in favor of refinancing.

With all that, the most powerful reason for a reverse refinance might be the step up in spousal benefits.

https://mutualreverse.com/david-garrison/

In the course of analyzing your separate and jointly owned portfolio assets, you realize you have become almost “top heavy” in your equity investing with very little in fixed income, although you do keep cash reserves for emergencies and for moderate investing in the art collection. You’re somewhat concerned about inevitable downturns in the stock market, but with interest rates so low, are not ready to make major portfolio shifts to bonds. In terms of your overall financial picture, debt relative to equity is almost insignificant, with no home mortgage or credit card debt.

You’ve obviously devoted serious thought to the future and to re-assessing your portfolio allocation decisions. Going forward, you might consider “re-balancing” your overall asset allocation using your housing wealth. The term “overlay” comes to mind, because portfolio managers of pension funds, faced with the same concerns about the bond and stock markets, use overlays of derivatives and options to offset their exposure to different segments of the market.

https://www.institutionalinvestor.com/article/b14z9mwbj8vgjj/the-growing-demand-for-overlay-strategies-in-pension-fund-management

Three years have passed. You’re older. The value of your home has probably increased significantly. Interest rates are lower. All these points indicate in favor of refinancing.

https://mutualreverse.com/david-garrison/

You have considered refinancing the home in which you hope to spend your remaining years. The purpose would be to make a one-time meaningful gift in the form of a donor advised fund. You like the idea of making a decisive move today (and taking an immediate tax deduction) without needing to make all the decisions now about which specific charities will benefit. The home values in your neighborhood have increased dramatically, and you’d have the chance to access meaningful dollars and still fit the payments into your budget. Still, you’re hesitant to take on an increased monthly obligation.

It’s possible that accessing housing wealth in a different manner might provide the perfect solution. With a reverse mortgage, you would be accessing dollars to fund your donor-advised fund without taking on an obligation to make payments every month or quarter. As you’ve stated, the growth in your home value could allow you to access meaningful funding for your donor-advised fund. Of course, you would continue to pay the property taxes, insurance, and maintenance costs on the home, but any remaining mortgage obligation you have could be paid off, possibly still leaving funds that could be used in emergencies.

As an alternative approach, you might discuss with your tax advisor setting up the reverse mortgage so as to generate retirement income, using some of your investment assets to fund the charitable initiative.

Some careful thought and planning will be needed, but using housing wealth to fund impact investing can help build your own financial plan while you set about doing your small part to help build a better world!

https://mutualreverse.com/david-garrison/