Why Mortgage Insurance Premium Is a Strategic Benefit in Retirement Planning
What Advisors Often Miss
Most planners see MIP as just another cost. In reality, it’s the insurance that transforms the Home Equity Conversion Mortgage (HECM) into a strategic planning tool.
What MIP Provides Your Clients
Guaranteed, Growing Line of Credit
- Independent of housing cycles or property values
- Can’t be frozen, reduced, or canceled
Non-Recourse Protection
- Clients and heirs never owe more than the home’s value
Estate “Put Option”
- Heirs can settle the loan at 95% of the home’s value
- Housing risk shifts to FHA, not the family
Why It Matters in Planning
- Buffer Asset: Draw on HECM instead of selling investments in down markets
- Tax Efficiency: Manage income brackets, RMDs, and Medicare thresholds
- LTC & Health Costs: Reliable source for unplanned or rising expenses
- Legacy Protection: Transfers downside housing risk away from heirs
Key Insight
MIP isn’t a drag on returns — it’s the price of certainty.
It allows planners to model the HECM with the same confidence as bonds or annuities, but with greater flexibility.
Bottom Line for Advisors
The HECM, powered by MIP, isn’t just another product — it’s a retirement income strategy enhancer.
Bob Tranchell, NMLS ID 286716. 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-102589. 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). These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to:www.nmlsconsumeraccess.org
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