A recent trend in mortgages has been the re-emergence of the reverse mortgage. Why? One would think that it’s because of the incredible appreciation that we’ve seen in housing prices, which is true, but really the reverse mortgage has become a critical financial-planning tool for the Baby-boomer generation. How? Many Baby Boomers did their best to properly save for retirement/financial independence, but the financial markets of 2001 and 2008 had a serious impact on retirement saving accounts. Now with home prices and the financial markets recovering dramatically well.., the home has become a significant source of equity and an ideal source of funds to cover expenses during retirement.
As such, a mortgage that:
- has NO payments,
- allows extra capital for property improvements
- potentially optimizes one’s tax strategies
- allows for proper asset allocation and financial independence
- has a loan allowance that actually grows over time
- no prepayment penalties
- will never cause the property to be underwater
- is easy to qualify for those 62 years of age and older
seems to warrant serious consideration to anyone planning for retirement.
“But what if I want to downsize..? Can I use a reverse mortgage to purchase a home as well?” Yes! Many of us think that a reverse mortgage is more of a refinance mortgage, but the truth is that a reverse mortgage can be used by qualified candidates to purchase property as well.
For expert guidance on your mortgage situation, please contact any one of our Mortgage Advisors at Absolute Mortgage Banking. We are also happy to refer clients to qualified financial planners as well.