There’s a lot of talk about reverse mortgages and for good reason. They can be powerful tools for seniors looking to access their home equity in retirement.
According to an article published by Nasdaq, financial advisors believe that seniors can also prepare for their future with reverse mortgages.
But it’s important to understand how reverse mortgages work and how they can be used as investment tools, not just sources of extra income.
Let’s find out how.
How Reverse Mortgages Have Worked In The Past
Reverse mortgages have been around for 60 years. But they have gotten a negative reputation for years, with stories of people taking out reverse mortgages without fully comprehending or being told their specifics.
Those days are long gone. Thanks to new regulations and updates, reverse mortgages are more popular, regulated, and utilized in the senior community.
Even the government has backed up reverse mortgage programs, like the Home Equity Conversion Mortgage (HECM) for Purchase.
Reverse Mortgages as An Investment Tool Now
We’ve seen how reverse mortgages are used as tools to turn the equity in your home into cash to improve financial situations.
Today, many financial advisors say that a reverse mortgage can also help seniors during periods of inflation without depleting their savings.
According to the Nasdaq article, financial advisors feel that a reverse mortgage may give retired seniors more money to spend while giving their portfolio a chance to grow. It can act “as a built-in neutralizer” for a more stock-heavy portfolio, letting you remain invested in equities longer.
Seniors can also use reverse mortgages to protect investment portfolios from market downturns. In a down market, that portfolio and cash flow may not be at its best performance, and with that reverse mortgage, those funds can protect seniors until the market picks back up again.
How Can We Help You?
Reverse mortgages are becoming an increasingly popular choice for seniors looking to supplement their retirement income. In addition to being a fantastic way to get cash out of your home, reverse mortgages can also be used as an investment tool.
And if some of the clients you serve haven’t thought of this, we want to help you give them all the information needed to understand the benefits of reverse mortgages and their options.
If you have any questions about this subject, we’re happy to help. Don’t hesitate to contact us to learn more!