By Steven J. Sless, CLTC®
An unprecedented number of people are currently out of work due to the COVID-19 pandemic. The good news is that buyers or those seeking to leverage their home equity who are furloughed or otherwise unemployed can still get mortgages.
Lending has become very restrictive, but it’s still possible to be approved. It’s advised to contact a licensed lending professional to review your situation -- analyzing finances, assets, credit, etc. These days, lenders will focus more on credit history, down payment, reserves and assets.
Last Updated 2020
By Steven J. Sless, CLTC®
As in the case with most recessions, the COVID-19 global pandemic has investors and businesses looking to “leverage.” Simply put, this is the concept of using various financial instruments or borrowed capital to multiply the potential return.
My team recently has seen a surge of interest from business executives and CEOs in jumbo reverse mortgages. Many of these clients have been referred to us by financial advisers seeking a buffer from the economic volatility and loss of income their clients are now facing.
Specifically designed for homeowners 60+ with higher home values, jumbo reverse loans offer the following advantages versus traditional HECM reverse mortgages:
U.S. and global economic volatility due to the COVID-19 pandemic have many retirees (and those close to retirement) worrying how to survive these turbulent times.
Will you have enough assets to maintain your lifestyle and meet retirement spending goals in the face of a possibly long-term bear market?
Traditionally, older adults fund retirement with a mixture of Social Security, pensions, 401(k)s and other retirement and saving accounts.
However, many could be sitting on (or rather, in) hundreds of thousands or even millions of dollars they haven’t considered using: home equity. This source of wealth is often ignored in retirement income planning.
One of the most sensible ways of leveraging home equity in retirement age is through Home Equity Conversion Mortgages (HECM), also known as reverse mortgages. With increased safeguards to protect consumers and lower costs than in the past, reverse mortgages are becoming mainstream financial instruments.
We wanted to provide a glossary to help you understand the terminology used in education materials and literature on Reverse Mortgages.
Home Equity Conversion Mortgage. This is the industry term for Reverse Mortgage.
A report that states an opinion on the value of a property based on its characteristics and the selling prices of similar properties in the area.
A service provided by an independent third-party, typically approved by the U.S. Department of Housing and Urban Development, to make sure the borrower fully understands the reverse mortgage and reviews alternative options, prior to application. Mandatory for the HECM program and in certain states for all types of reverse mortgages.
The HECM (Home Equity Conversion Mortgage), more commonly known as a reverse mortgage, is designed to help older Americans age in place and enjoy retirement.
Since its inception, the reverse mortgage program has been widely misunderstood, sometimes misrepresented and often overlooked by financial planners and consumers alike.
It’s important to get the facts before making a decision for yourself or your family. This article will examine the pros and cons of reverse mortgages, dispel common misconceptions and discuss the ways reverse mortgage loans can help solve America’s longevity funding dilemma.