In Times of Market Volatility, A Reverse Mortgage Loan Can Be Your Secret Weapon
You may have considered taking out a traditional Home Equity Line of Credit or selling your home to monetize the equity just to make ends meet until the market recovers. But most experts don’t recommend selling following a big drop.
For older homeowners, there’s an exclusive tool to help you ride out stock market storms while allowing your investments to grow: the reverse mortgage loan.
The loan less traveled
Home equity represents about 66% of the average retired American’s wealth. And as home values continue to soar, respected financial experts — including the Center for Retirement Research at Boston College, researchers at Texas Tech University, and Dr. Wade D. Pfau, CFA® — have surmised that older homeowners may have more financial security when using a reverse mortgage to access this important and often under-utilized retirement asset, all while continuing to live in and own the home. As with any mortgage, you must meet your loan obligations, keep current with property taxes, insurance, and maintenance.
- A reverse mortgage line of credit can be a great financial tool that you can use as a “rainy day fund.” You can leave it untouched when you don’t need it, but it allows you to be more financially prepared when you do need additional funds — such as when invested assets are under-performing.
- It has a unique growth feature that you can’t get with a traditional home equity line of credit: The unused amount grows over time, giving you access to more funds as time goes on. (If part of your loan is held in a line of credit upon which you may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.)
- You may also choose to receive your funds as a lump sum or monthly payments to supplement your retirement income or to refinance your mortgage and/or consolidate major debt, all while you avoid tapping into your savings and invested assets. Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages. In certain states, RMF’s EE loan provides a fixed-rate term payment option.
Another huge benefit, a reverse mortgage has a flexible repayment feature. YOU decide whether you want to make monthly mortgage payments or none at all. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, maintenance.
As always, if you have concerns about stock market volatility and how it may impact your retirement accounts, we encourage you to speak with your financial advisor.
What goes up, must come down
Market conditions are constantly changing. But as you near or enter retirement, you might not have time on your side to recover from a down market. A reverse mortgage loan may offer the protection you need, when you need it, to keep your retirement lifestyle on track. Reach out to Reverse Mortgage Funding LLC (RMF) at (888) 277-1567 to learn more about this unique opportunity.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans live the retirement lifestyles that they imagined and deserve, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 5-star / Excellent score on Trustpilot; 4.5 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call (888) 277-1567 to speak with one of our experienced reverse mortgage specialists to learn about our retirement financing products and solutions.