Financial writer Jeff Brown’s recent Wall Street Journal article, does a good job of explaining why some financial planners are encouraging seniors in their early 60s to take a reverse mortgage line of credit. “Research has shown that setting up a line of credit as soon as possible, age 62, in order to let it grow and only tapping into the line of credit when needed can substantially improve the long-term sustainability of a retirement-income portfolio, meaning you can make your money last longer,” said Jamie Hopkins, associate professor of taxation at the American College of Financial Services.
My eyes close and I imagine the possible fountain of youth that comes as a result of practicing yoga. When I started running many years ago, not as a young woman I may add, I felt a lot of benefits then that I now receive from yoga. Something positively magical happens! Yoga opens the body to release stress, anxiety and tightness found in every day living. It undoes stiffness, tension, and soreness in my neck and shoulders from sitting hunched over a computer, from standing or from the pounding of a competitive tennis match.
Yoga stretches me out so that I am once again flexible. Balance, strength and better posture are due in part from a steady diet of yoga, I am certain.
But that’s not all. This physical restoration keeps me very interested in returning to class over and over. What I have also discovered are other subtle benefits to staying consistent. Sometimes a spiritual or creative mindset takes over my thoughts and my open heart begins to explore what I might be feeling: joy, pain, excitement, grief or simply peace. It’s a softer endorphin rush than what I experienced with running. It is nevertheless a physical and emotional plate of feel-good! Yoga is delicious; don’t just try it out, give it a long term commitment and enjoy the many benefits.
As my eyes open I am refreshed, invigorate and relaxed after my one hour Vinyassa session. I leave class feeling that aging just slowed a little, if even for a day.
There is always uncertainty in the market in an election year, but many people are wondering exactly what kind of impact Donald Trump’s election will have on their mortgage and the real estate options available. Whether you are still paying off your home or have been shopping around for the right one, here are some possibilities for the real estate market following the results of the 2016 election.
An Increase In Luxury Properties
With the release of Donald Trump’s tax plan which provides the most sizeable tax cuts to the wealthy, it could be the case that there will be an increase in the demand for high-end properties which may lead to less availability and a higher price point. As this kind of demand could also work to bump up the median price of real estate in urban areas, it could have an adverse impact on low-income earners who may see themselves priced out of a more expensive market.
Rising Mortgage Rates
Most people that have been perusing the market recently have heard about the low interest rates that make purchasing a home a good financial decision. However, following the uncertainty of the election, interest rates are on the rise. While the sense of instability may persist until potential home buyers know more, this boost in the rates since the election may mean that many buyers will decide to hold off until the new year.
A Loosening Of Regulations for a Conventional Residential Loan
The concept of the cost involved in regulation was something that Donald Trump brought up many times on the campaign trail, and this could be a sign that he is ready to make adjustments when it comes to housing regulations. While there may be little he can do at the local level, if regulation changes take hold, this could mean more loan opportunities for those with a poor credit history who may not have been a shoe-in for a mortgage previously.
With the fluctuations of the market dependent upon a variety of factors, it’s hard to say what will occur in the mortgage market in the next few months and years. However, with mortgage rates on the rise and the potential change in regulations, it could continue to fluctuate until there is more certainty on the horizon.
However in the world of reverse mortgages, if you’re currently in the market to downsize or rightsize and are curious about your options, contact me about purchasing a home with a Reverse Mortgage HECM.
With the incoming influx of baby boomers entering retirement age, the number of older homeowners will soar in the near future. While many will prefer to age in place, certain challenges will prevent these desires from becoming reality. But here is where a reverse mortgage can be a financially realistic option to help older homeowners alleviate cost burdens and comfortably age in place, according to a new report from Harvard University.
More than one in five people in America will be aged 65 or older by 2035. Furthermore, one in three households will be headed by someone 65 or older, according to the report released Tuesday by the Joint Center for Housing Studies of Harvard University.
During an era that will see vast quantities of older people with low incomes and high housing costs, reverse mortgages—if used strategically—could provide another solution for helping older homeowners facing cost burdens.
“For those homeowners with mortgages they cannot afford but who still have substantial home equity, reverse mortgages may make it more financially feasible to age in place,” the Harvard report states. The report also includes information on projections of older population and households, tenure and housing circumstances of older adults, disabilities of older adults, the financial situation and implications for housing.
May this holiday season be happy and bright for you, always full of hope and gratitude.
People are living longer than ever and by 2050 there will be an estimated one million centurions in the United States. However, living longer also means running the risk of outliving retirement savings, explains a recent article by Investment News.
Financial advisers are starting to get the message that their clients are living longer and are urging them to save more money, according to an Investment News survey of 348 advisers.
Reverse mortgages are becoming a more popular solution to help close the gap when seniors start to outlive their retirement savings, but there are still some issues surrounding the product that can make it a tough decision for some.
Read the article HERE.
For many American workers today, the road to a comfortable retirement is paved with many challenges, both within and outside of retirees’ control. Not the least of these issues is the fact that a shortfall in savings will force retirees to consider non-traditional retirement funding solutions, particularly home equity and reverse mortgages, said one official from a Washington, D.C.-based think tank this week.
“Home equity, we think, is underutilized in retirement planning,” said G. William Hoagland, senior vice president of the Bipartisan Policy Center, a Washington, D.C.-based non-profit organization that aims to promote health, security and opportunity for all America. The final report can be seen here Securing our Financial Future
Hoagland, who helps direct and manage fiscal, health and economic policy analyses for the BPC, presented on the retirement security and personal savings challenges facing today’s Americans at a policy forum hosted by the Employee Benefit Research Institute and the Education and Research Fund on Thursday.
Citing that Americans own an aggregate $12 trillion in home equity, and that for many retirees home equity represents a significant portion of their assets, Hoagland suggested reverse mortgages will become an even more popular retirement solution.
“Fifty percent of all homeowners age 62 are home-rich and cash-poor in the sense that more than half of their net worth is held in home equity,” he said. “The reverse mortgage market is small and the product carries some risk, but nonetheless we [BPC] think it could be a valuable tool for retirees with significant home equity.”
Two years ago, the BPC launched the Commission on Retirement Security and Personal Savings with the aim of addressing some of the most important financial issues faced by all Americans. Since then, the Commission has extensively analyzed certain challenges and has developed a bipartisan package of solutions.
Such challenges addressed in the forthcoming report include ways to expand access to “well-designed” workplace retirement plans, facilitate personal savings for short-term needs as well as retirement, and strategies to preserve and strengthen Social Security for current and future generations of American workers.
Reverse mortgage policy recommendations will also be included in the final report, Hoagland said, though he did not expound on the finer details of what these proposals might entail.
This video is a replay of a live webcast REALTOR® Magazine presented on April 21, 2016, about selling a home that has a reverse mortgage. The program featured Leslie Flynne, chief operating officer of Reverse Mortgage Solutions, Inc., and Steve Irwin, executive vice president of the National Reverse Mortgage Lenders Association. Jon Boughtin of NAR Public Affairs hosted the program. At a minimum listen to the first 20 minutes! Please contact me if you have further questions.
It is good news that President Obama signed the 2016 Older Americans Act (OAA) Reauthorization into law this week. Our local Monterey County services including Alliance on Aging’s HICAP, Ombudsman, Outreach and Benefits Checkup programs receive Older Americans funding for the services they provide. Meals on Wheels, Legal Services for Seniors, Alzheimer’s Association and some other senior providers are also recipients of this funding. This reauthorization is a very important step to ensure the continuation of these services and funding.
In the beautiful spring month of May 2011, I received a call from a business friend who said “we are ready to sell our home of 20 + yrs. and move closer to services!” This excited announcement could only come from a couple living in the country and longing for a short commute and a plethora of conveniences. The reasons he gave included health care resources, educational opportunities, not to mention friends and all that an urban environment offers compared to living in a rural community.
That phone call and sincere desire to change led to a 5-year search and retirement plan involving everything from the perfect, new house wish list to current home repairs to coming to terms with the inevitability of retiring from a lifelong career. One steady conversation was about the pending reality of a fixed income and their modest bank reserves. Then of course along the way there was angst of locating a home in the appropriate price range, the right configuration, plus the all-important timing of selling their primary residence before buying the next one. That two- step was required in order to provide the down payment for the new primary. Only this wasn’t just the next residence, this home would be the last one, and this home would be bought with a HECM purchase money loan.
Imagine being in your late 70’s and buying a new home, in the right price range, with just the right floor plan, near all the required resources and amenities for retiring on a fixed income. Imagine too that your once modest bank account, just received an infusion of funds from the sale of your primary residence. Why? You only need some of the proceeds from the sale to buy the new home.
Your new, perfect, home with 2 bedrooms and 2 baths only required a cash outlay (down payment) of less than ½ the purchase price and the rest is a reverse mortgage (HECM purchase loan) with no required monthly payments. Did I mention that your bank account swelled with new funding from the sale of the old house?
In the end, a good life for my friends changed for the better; a little more money in the bank, (what a bonus that became) health care resources and various other benefits, especially extended family and friends nearby, all reachable within a short leisurely drive.
At 87 years’ young, life was good. Still an avid golfer, gracious home entertainer of family and friends, active on local charity boards and a philanthropist from the heart, Henry had it all. Well, that is to say until an unhealthy heart had its way with him and after a few surgery’s and other procedures Medicare was not exactly keeping up with all the medical bills. So the logical thing to do was access the retirement funds and the income tax cost was punishing. Yes, he has a substantial passive income but those medical bills were draining one fund after another until Henry discovered the beauty of a HECM reverse mortgage.
His home was free and clear of any mortgage, the children had homes and lives of their own including money in their own bank accounts. Henry did not want to be burden to his children and wanted very much to replenish his retirement funds. He saw the HECM as a way to maximize cash flow again and balance out his retirement funds. A month after signing his loan application his wish came true and his financial stress melted away. He tells me he has never felt healthier! and is grateful for his new found piece of mind. He likes the idea too that he also has a HECM line of credit in the event he has another medical emergency. Life is good again!