Reverse Mortgages vs. a HELOC and a Home Equity Loan

Advantages of a Reverse Mortgage Loan vs. a HELOC and a Home Equity Loan Reverse Mortgage vs HELOC.  For homeowners aged 62+, a Home Equity Conversion Mortgage (HECM, commonly called a reverse mortgage) loan offers some distinct advantages over other types of home-equity-release loans. According to a survey conducted by Clever, about half (51 percent) of […]

Reverse Mortgage After Death

If you are looking for servicing an existing reverse mortgage for your loved ones, visit this link. Taking out a mortgage is one of life’s big decisions. If you are considering a reverse mortgage loan, you likely have a lot of questions around what a reverse mortgage is and how it works. At Fairway Independent Mortgage […]

Three Buckets of Retirement Income

Three Buckets of Retirement Income:  The Sacred Cow of Home Equity Many people feel that paying off their home and having no mortgage with lots of equity is the Holy Grail of retirement. Several people wait until their home is paid off before they retire and then feel they are safe to do so. The […]

Reverse Mortgage For Purchase Loan (H4P)

Get Started The Financing You Need to Buy the Home You Really Want in Retirement. Reverse Mortgage for Purchase Loan (H4P). If you are 62 or older, you may be thinking about buying a new home that better meets your needs in retirement. Maybe you have your sights set on a home that’s closer to […]

Inflation Presents Unique Challenges for Retirees

Home Wealth Can Help Retirees to Fight Inflation These days, inflation is on the minds of most people — and it is of particular concern for seniors. With prices rising at the fastest pace in decades, many people who are in or nearing retirement have heightened fears they may outlive their savings. What Is the […]

How Seniors Could Double Their Home Buying Power — Despite Rising Interest Rates

The advantage of the H4P.  These days, in much of the U.S., the housing market is tilted sharply in favor of sellers. There’s fierce competition among buyers, interest rates have been rising, inventory is tight, and home prices are at record highs. According to Fannie Mae, U.S. home prices are expected to rise 10.8 percent […]

The Pros and Cons of Reverse Mortgage Loans

Pros and Cons of a Reverse Mortgage Most older adults hope to live in the place they know and love for as long as possible—their own homes. Home equity is typically one of the biggest slices of the net worth of older-adult homeowners—and the strategic use of home equity can be a great option for […]

Tax Benefits Of Reverse Mortgage Loans

The Top Three Tax Benefits Of Reverse Mortgage Loans* A Reverse Mortgage Loan Converts Your Home Equity Into Cash, And For Many People, It’s A Life-Changing Influx Of Money. So You May Find It Surprising That There Are Many Tax Benefits Of Reverse Mortgage* — And Here Are The Top Three. Reverse Mortgage Loan Proceeds Are […]

Reverse Mortgages Facts Top 30

Reverse Mortgage Facts Top 30 Reverse Mortgage Facts. Some of these reverse mortgage facts may surprise you.  It is common that when we talk about reverse mortgage loans with people, they often don’t know a lot about them.   We are happy to share these with you in hopes that it will answer some of your […]

A Reverse Mortgage Retirement

Reverse Mortgage Retirement Reverse Mortgage Retirement.  Planning your retirement can be a lot like preparing for your wedding day. Many thoughts are going through your mind. Do we have enough money to afford this? Is now really the right time? Am I ready to make this commitment? However, for most people that waited longer to […]

How Does A Reverse Mortgage Affect Title

How Does A Reverse Mortgage Affect Title How does a reverse mortgage affect title? One thing to consider with all mortgages, including the reverse mortgage loan, is how ownership of the property is structured. In most instances, the property title is held either fee simple or joint ownership traditionally. However, occasionally the homeownership can be […]

How A Reverse Mortgage Loan Works In Divorce

How A Reverse Mortgage Loan Works In Divorce How a reverse mortgage loan works and can provide additional support during one of life’s difficult steps.  Divorce can be emotionally stressful enough for everybody involved without the added worry of what’s going to happen with their finances. Often, one of the first questions asked is what […]

How A Reverse Mortgage Loan Could Help Protect You And Your Home In Uncertain Times

Can you protect something? Maybe your home?

Do you remember in 2008 what had happened before and after the housing market bubble? The market was going up, home values were increasing, and we had low unemployment rates before the bubble crashed. Before the crash, when houses in larger cities went up for sale, a few hours later, it would have multiple offers over the asking price. Then shortly after the housing bubble crashed, home values had started to drop, and the time frame for selling homes became much longer. After the bubble, the Home Affordable Refinance Program (HARP) became a popular loan option because a lot of people owed more on the mortgage than what they were worth from the home’s declining values.

Fast-forward to today, where you see more and more seniors continue to stay in their homes longer, and starter homes are getting harder and harder to find. Millennials are looking to buy starter homes, and the supply for entry-level homes is going down. Prices and demand for entry-level homes for the past few years have been significantly increasing.

Before Covid-19, the market was going up, Las Vegas home values were increasing, and we had low unemployment rates. According to thebalance.com, the unemployment rate for 2019 was at 3.5%, which the last time we had seen rates that low was since 1969 when Nixon took office and just before the mild 1969-1970 Recession. Do you believe history tends to repeat itself, and all ships rise or fall with the tide? Are you concerned about your home values going down just like the stock market has decreased recently?

There is a lot of worry and fear being caused currently from the Covid-19 virus in the news lately. For some, the market’s recent downswing of 30% in their retirement funds is causing even more fear. We are all hoping this will be a fast rebound like the 1969-70 mild recession, like a rubber band pulled back, testing its limits, and shooting forward with a stronger force behind it. Hopefully, it will not take several years, like the 2008 housing bubble, took to recover. The question is, what can you do about it, so you’re not just sitting and hoping things change. If your 62 or older with some equity in your home, you may have the ability to use a reverse mortgage loan.

Here are some reasons why I believe a reverse mortgage loan is going to become a popular loan option like the HARP loan was after the 2008 bubble.

1. Are their better places to pull your money from besides your 401k accounts?

There have been many studies done that show it’s better for your portfolio’s survivability if you pull the money from a growing reverse mortgage line of credit in market downswings than from your investments.

Are you currently using your home equity to potentially strengthen your portfolio? Are you presently pulling money out of investments? Wouldn’t it be beneficial to have the funds come out of another source of funds rather than what you have in the stock market now*? If not your home, where else are you going to get the funds to meet the cash flow you need? The interest rate on a reverse mortgage loan is pretty low right now. Wouldn’t you rather leverage your available assets than ignore them to prevent you from having to sell your investments?

2. Are you concerned about your home values going down?

A reverse mortgage loan is a non-recourse loan. The definition from Investopedia for Nonrecourse debt is a type of loan secured by collateral, which is usually property. If the borrower defaults, the issuer can seize the collateral but cannot seek out the borrower for any further compensation, even if the collateral does not cover the full value of the defaulted amount.

So if you are concerned about home values going down as they did after the 2008 housing bubble a reverse mortgage loan would be a good loan to consider. If your home value drops, the lender is not able to request their funds back that they already borrowed you.

3. What could the benefits of having additional cash flow be?

One of the first things said about reverse mortgage loans in most advertisements is no monthly mortgage payments except for taxes, insurance, and maintenance. In times of fear and concern tend to be the best time to have additional cash flow. The best time to help people is highest when there is a need when people are struggling. You can use the additional cash flow to help your loved ones who may be struggling with recently becoming unemployed and struggling to keep up with life essentials as buying food. If home prices, the market, and other items continue to lower in price, you can use the additional cash flow to purchase things at discounted prices. Whatever the reason is, I’ve never heard anybody complain about having additional cash flow.

It’s often wise to take the time to learn something new, and it doesn’t pay to wait. Rick R. Rodriguez is your local Certified Reverse Mortgage Professional, CRMP, who has been specializing in reverse mortgages since 2005 and has first-hand experience with how reverse mortgages helped homeowners back in 2008 to help you navigate through our current conditions. Whether you are looking in Las Vegas for a reverse mortgage or beyond, contact our team for more information.