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

After reading an article about the advantages of a reverse mortgage, the two of you are ready to learn more. It seems that using the equity you’ve built could make it possible for you to live out your lives in the home you’ve owned and lovingly cared for during the past three and a half decades. You both feel staying put holds more appeal than moving to a retirement community, but you know some remodeling will need to be done to accommodate your needs as you age.

The two of you have always tried to be organized rather than impulsive when making important decisions, carefully mapping out the steps needed to turn your goals into reality. You know it’s important to consider the long term effects of big financial moves. As you explore reverse mortgage options, you’re wondering which advisors to consult.

Your four adult children have all proven to be fiscally responsible, each making choices that make sense for them and their mates, keep you in the loop, but never asking for your help. In turn, the two of you have not consulted your offspring when making either spending or investment decisions. You’re wondering if a reverse mortgage might be an exception to that practice.

Advisors to consult might include a) Tax advisor – while selling investments or taking retirement plan withdrawals to fund the remodel on your home could generate capital gains tax or even ordinary income, draws on a reverse mortgage are nontaxable. b) Estate planning attorney – your decision to take a reverse mortgage might generate a need to adjust beneficiary designations on other assets or on the home itself. c) Family physician – is your medical prognosis consistent with your desire to “age in place”?

Upon the death of a reverse mortgage borrower (in your case when the second of the two of you dies), the loan becomes due and payable. Your heirs have the right to buy the home,sell it, or turn it over to the lender to satisfy the debt. If you were planning on leaving the home to all of – or any of – your children, it would make sense to talk to them now about the options they will have.

Who needs to talk the housing wealth talk? Whoever can help you make the decision that’s best for you!

https://mutualreverse.com/david-garrison

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

While the years following the death of your wife have been extraordinarily difficult, you have now met a wonderful woman and are planning remarriage. Your original intention was to sell your home and move into a condo; your plan now is to remodel (your fiancée is a decorator)and stay put. You are still working part time (she still full-time) and want to remain in the area. The plan is for her to sell her condo and move into your home, directing the remodel and sharing the costs. However, as you explained to your estate planning attorney, you are not planning to add her name to the title, as you want the home to ultimately go to your one daughter. On the other hand, with a fifteen year age difference between you (at age 60, she is not yet eligible, even after you’ve married, to be a borrower on a reverse mortgage) you want your new wife to be able to stay in the home for the rest of her life should she so choose.

It sounds as if a reverse mortgage, entered into after the marriage, might address a number of the concerns you mention, so you might wish to introduce the idea as you continue your estate and financial planning discussions. Not only might using your housing wealth to finance the remodel avoid the need to make untimely (and perhaps tax-costly) sales of investment assets, there would be no mortgage payments required, again allowing you to devote more of your earnings and assets to your new lifestyle together.

A reverse mortgage would ensure that each of you has the right to remain in the home for as much of your lives as you choose. On the Home Equity Conversion Mortgage contract, you would be listed as the only borrower, while your new wife would be listed as an eligible non-borrowing spouse. Should you pass away while the loan is still active, she would be guaranteed the right to remain in the home, provided she continued to maintain it, keeping up to date with property taxes and homeowners’ insurance. As you begin your new life together, beyond financing the remodel, the reverse mortgage could provide a source of cash for emergencies or for funding future travel or lifestyle costs.

There is one important caveat: a following your death or permanent relocation to a nursing home, your widow would not have access to disbursements from the mortgage.

Meanwhile, during no point in your own life (assuming property upkeep, taxes and insurance were maintained) would your ownership of the home be compromised, and your daughter could remain as the beneficiary of the property. She might decide to sell the home or pay off the loan with a new mortgage.

https://mutualreverse.com/david-garrison

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

With retirement planned for each of you within the next year or two, you’ve been debating whether to move closer to your son and grandchildren on the East Coast or stay in Indiana, closer to your daughter and her family. Both sets of grandkids will be entering or returning to different colleges, so it’s apparent that you’d be unlikely to see very much of them in between holiday gatherings even if you chose to relocate. With both of you in generally good health, your final mutual decision has been to stay put in your comfortable home in the Hoosier state.

Interestingly, in a family discussion about estate planning, your daughter surprised you by expressing an interest in someday inheriting her childhood home, understanding that you yourselves now hope to live in the home for decades to come. While you own a timeshare that could be bequeathed to your son, its value is far less than that of your home, on which you have less than three years of mortgage payments remaining. All these considerations are being weighed as you plan your financial future. (Basic powers of attorney and other documents have already been in place for awhile, along with long term care insurance.)

You might consider a reverse mortgage, perhaps combined with a survivorship whole life insurance policy. First of all, by replacing your forward mortgage with reverse financing, you would no longer need to make monthly mortgage payments and could divert that cash to paying premiums. Survivorship life insurance would pay a death benefit when the second of you has passed away. The insurance could serve two functions: 1. “Equalizing” the inheritances you leave to your two children, with your son receiving the time share, your daughter the home. 2. Paying back at least part of the reverse mortgage loan.

Meanwhile, the reverse mortgage would ensure that each of you has the right to remain in the home for life. After three years have elapsed (when your original mortgage would have been paid off), you could take a “draw” to help pay the insurance premiums. Your estate planning attorney can discuss with you setting up a life insurance trust to implement the plan.

https://mutualreverse.com/david-garrison

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

By next spring, when you will both be qualified to receiver social security benefits, you’re going to retire from long careers in education. You’re justifiably proud of the fact that you’re close to paying off your home, have no credit card debt, and have each accumulated a nice 403b nest egg (you plan to roll these into self-directed IRA accounts). While neither of you is a “stock trader”, you have been comfortable working with your financial advisor to choose and periodically rebalance your portfolios.

You will each be receiving a pension, but that will not totally support your needs. As you contemplate using both social security benefits and investments to augment your cash flow, you are more than a little concerned about depleting your assets too quickly, particularly since you will no longer be making those contributions through payroll deductions.

Consider “reversing the sequence” by using housing wealth for support. In other words, with a reverse mortgage line of credit, you could defer tapping your retirement portfolio, perhaps for decades, instead supporting your lifestyle with a combination of social security benefits and periodic, tax-free “draws” out of the equity you’ve build up in your home. Meanwhile, you’d continue managing your rollover accounts. Because even short term drops in the value of your investments at the start of retirement could be devastating, you’d be allowing those assets time to build.

Using the same logic, you might explore using a reverse mortgage to defer Social security benefits for one or both of you. Delaying Social Security benefits by just five years can increase benefits by as much as 30% for the rest of your life!

With three potential sources of support (pension, Social Security benefits, and investment draws), it might be smart to “reverse the order”, deferring Social Security and investment asset liquidation, while using your housing wealth as a main source of support as you begin your retirement

*Not Intended as Tax Advice. Consult a Tax Specialist.

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

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

As an only child, daughter of a mom who was widowed 2 ½ decades ago, you were always taught to be independent and financially responsible. Now married with children of your own, you maintain close ties with your mother, who lives in the family home less than an hour away. While the two of you never directly discuss either her finances or yours, you sense that Mom is just barely managing to cover her lifestyle expenses.

Mom has shared with you her desire to remain in the home for the rest of her life (as opposed to moving into a retirement community). In order for her to be safe, however, you realize certain modifications need to be made to the house itself. You are aware that Mom has aLong-Term Care insurance policy, which she has so far not needed to use.

You are not in a position to offer meaningful financial help; in any event, your mother would be hurt by such an offer. A reverse mortgage might provide a solution, allowing your mom to cover the costs of the remodel and to supplement her income as well. Since she would be using “her own” housing wealth, your mother’s desire to operate independent of your help would be satisfied.

With a reverse mortgage line of credit, your mother could take a one-time “draw” on to make the needed modifications to the house. Then, through either periodic, tax-free “draws” out of the equity she’s built up in your home, or through converting the mortgage into a lifelong “annuity” payout, she would supplement her monthly income.

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

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

Before your wife of almost fifty years passed in 2020, the two of you had planned to remain in the home you’d occupied for almost four decades. Together, you had begun exploring the possibility of taking out a reverse mortgage, but the process had to be sidelined while you dealt with hospitalizations and treatments. Your intention continues to be occupying the residence for the remainder of your own life.

While right now you are well able to financially support your own lifestyle, you like the idea of having a reliable and readily available cache of money from which to draw in the event of unexpected opportunities or needs. Both your children have homes of their own, but your one big hesitation about the reverse mortgage is that you don’t want to leave any debt or hassle for them in settling your affairs.

When a reverse mortgage borrower dies, the lender will typically explain to the estate representative different options for paying off the loan. If the heirs to your home are your two children, they will have the choice of: selling the property to pay off the reverse mortgage balance, or to pay off the loan with a new mortgage.

One possible way to avoid passing on any debt obligation to your heirs is buying a whole life insurance policy. Your heirs could use those insurance proceeds to pay off any balance remaining on the reverse mortgage without needing to sell the property should they make the decision to continue to own it.

Your housing wealth would thus have come full circle, there to fund your own unexpected opportunities or needs, yet preserving your children’s power of choice about their childhood home.

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

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/