By Chris Clow on June 2, 2019
The Home Equity Conversion Mortgage (HECM) program is a unique hybrid of the public and private sectors, with a great deal of interest directed toward the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD) who set the policies by which that program operates.
Full article can be found here.
by Marguerita M. Cheng, CFP® , RICP®, CRPC®, CDFA®
For homeowners over the age of 62, money may be tight due to a turbulent economy, greater longevity, and rising health care costs. And let us not forget the roller coaster ride called the housing market. One way to lessen the unexpected shocks that can jeopardize a comfortable retirement is to consider acquiring a reverse mortgage.
For article may be found here
by Wade Pfau on May 30, 2019
A common question I receive regards how to find a trustworthy reverse-mortgage lender. This is not necessarily easy for those beginning the process with little more to rely on than an Internet search engine. A starting point may be with personal referrals from your financial advisor, or from friends or family who have felt satisfied with their lenders. I am also willing to help readers find the names of local lenders from reputable companies if you write to me providing your city and state. I am not compensated by reverse-mortgage lenders for giving such referrals.
Full article may be found here.
by Peter Neuwirth, FSA, FCA; Barry H. Sacks, J.D., Ph.D.; and Stephen R. Sacks, Ph.D.
This paper examines the effect of using reverse mortgage credit lines to supplement retirement income by two types of retirees that have not been addressed in the previous literature: (1) those whose retirement savings are significantly below those of the mass affluent; and (2) those who are “house rich/cash poor.”
Results of this analysis demonstrate an important contrast with the results of the earlier literature; specifically, the greater percentages of home value, when coordinated with the retirement savings portfolio, resulted in substantially greater percentages of the portfolio that can be drawn.
This paper suggests a new alternative to the 4 percent rule that can guide planners and retirees toward an optimal cash withdrawal strategy. This new rule takes into account the total of the retiree’s retirement savings plus his or her home value.
The quantitative analysis in this paper uses the same spreadsheet models and strategies first presented in the Journal by Sacks and Sacks (2012). This paper builds on that work by extending the analysis to a broader range of retirees.
Full paper here
by Barry H. Sacks, J.D., Ph.D., and Stephen R. Sacks, Ph.D.
This paper examines three strategies for using home equity, in the form of a reverse mortgage credit line, to increase the safe maximum initial rate of retirement income withdrawals.
These strategies are:
Full paper here.
by Marguerita M. Cheng, CFP® , RICP®
For homeowners over the age of 62, money may be tight due to a turbulent economy, greater longevity, and rising health care costs. And let us not forget the roller coaster ride called the housing market. One way to lessen the unexpected shocks that can jeopardize a comfortable retirement is to consider acquiring a reverse mortgage.
PDF of full article may be found at http://blueoceanglobalwealth.com/pdf/reversemortgage.pdf
by Shelley Giordano
SOA research has shown that non-financial assets are the biggest part of retirement assets for many middle American families. The largest part of non-financial assets by far are home values. Housing is the largest item of spending for older Americans, and housing costs vary greatly by geographic area and type of housing. Reverse mortgages offer a way to use some of the value of the home while still living in it. The SOA post-retirement risk research has indicated that few retirees are taking into account home values in their retirement planning. The 2015 focus groups indicated low interest in reverse mortgages. People thinking about planning have been asking the question: how do we take housing values into account in retirement planning? What are the options? How do we evaluate them? This interview with Shelley Giordano provides information about reverse mortgages and how they are being used today.
Full story at https://toolsforretirementplanning.com/2017/05/06/understanding-reverse-mortgages-an-interview-with-shelley-giordano/
by Wade Pfau, Ph.D., CFA
Originally published at Forbes
A mortgage’s effective rate is applied not just to the loan balance, but also to the overall principal limit, which grows throughout the duration of the loan. How the effective rate is applied may sound technical, but it is an overwhelmingly important point to understand in order to grasp the value of opening a line of credit as early as possible.
Full story at
https://retirementresearcher.com/how-does-the-line-of-credit-for-a-reverse-mortgage-work/
by Wade Pfau, Ph.D., CFA
Originally published at Forbes
Most current HECM reverse mortgages use an adjustable interest rate, which allows the proceeds from the reverse mortgage to be taken out in any of these four ways or a combination thereof…
Full story at
https://retirementresearcher.com/spending-options-for-a-reverse-mortgage/