Here is another good case study showing how reverse mortgages can be used for more than just supplimental retirement income. This case study illustrates how a reverse mortgage can help with long term care expenses.
Long Term Care Reverse Mortgage Case Study
A 65 year old couple is concerned that they have not saved enough money to cover long term care expenses and excessive medical costs. Their investment properties and pension provide a comfortable level of income today, but they are worried it may fall short in the future.
Their assets include a highly appreciated $2.2 million waterfront property with a detached rental cottage. If they sell the property outright they will lose $275,000 to capital gains taxes.
One solution is for them to take out a reverse mortgage against their property. They would recieve $800,000 line of credit from the reverse mortgage. They could then use part of the line of credit to purchase a SPIA (Single premium immediate annuity) and use the annuity payments to pay the monthly premiums on a long term care policy. The remaining portion of the reverse mortgage line of credit can be used to cover future medical expenses.
As the property appreciates in value of time, it's possible for the appreciation to far exceed the withdraws that are used to cover their future medical expenses. After 25 years (age 90 for the retirees) the balance on their reverse mortgage will be between $2 and 3$ million depending on the fequency and timing of their line of credit withdraws. If their home continues to appreciated at 6% over the same 25 years, it will grow in value to over $8.8 million.
This would provide their heirs with a significant estate at the same time providing the security and liquidity that the couple feels they need to pay for future health care and other expenses.
Resource box: For more information visit reverse annuity mortages or the reverse annuity mortgage blog.
Tuesday, February 10, 2015
Thursday, February 5, 2015
Using Real Estate to Pay for Retirement
Have you wondered how you are going to pay for your retirment? Well a new book "Retire on the House" by Gillete Edmunds and Jim Keene may open your eyes to new possibilities. If your like most homeowners, you only think of your home as a place to live and not as a powerful financial tool.
In the book the authors discuss almost every possible way to turn your home into a an income stream without selling it. The suggestions provided will give retirees who own their home many different ideas to suppliment their retirement income.
Some of the suggestions include converting your home into a boarding or rental house, refinancing your home, downsizing, moving to senior community and investing sell proceeds, or taking out a reverse mortgage.
The book does an excellent job of explaining the pros and cons of each alternative, especially its discussion on the complex subject of reverse mortgages. The authors present an easy to understand overview of the pros and cons of using a reverse mortgage.
Although this book tackles some complicated topics like reverse mortgages and can get a little heavy, the information provide is absolutely invaluable. Any Senior that owns their own homes should pick up a copy and study it, if only just to open their eyes to the possibities.
Information brought to you by the Reverse Mortgage Guide and the Reverse Annuity Mortgage Blog.
In the book the authors discuss almost every possible way to turn your home into a an income stream without selling it. The suggestions provided will give retirees who own their home many different ideas to suppliment their retirement income.
Some of the suggestions include converting your home into a boarding or rental house, refinancing your home, downsizing, moving to senior community and investing sell proceeds, or taking out a reverse mortgage.
The book does an excellent job of explaining the pros and cons of each alternative, especially its discussion on the complex subject of reverse mortgages. The authors present an easy to understand overview of the pros and cons of using a reverse mortgage.
Although this book tackles some complicated topics like reverse mortgages and can get a little heavy, the information provide is absolutely invaluable. Any Senior that owns their own homes should pick up a copy and study it, if only just to open their eyes to the possibities.
Information brought to you by the Reverse Mortgage Guide and the Reverse Annuity Mortgage Blog.
Monday, February 2, 2015
Reverse Mortgages on the Rise
The popularity of reverse mortgages in the U.S. seems to be exploding as more and more people begin to use their home equity to help fund retirement. Just take a look at these reverse mortgage statistics from HUD.
The U.S. Department of Housing and Urban Development endorsed a total of 7,572 reverse mortgages in June. And it has endorsed 55,659 reverse mortgages thru the nine months of FY 2006 ending June 30.
To put that in prospective the FHA endorsed only 43,131 reverse mortgage loans for all of FY 2005. In fact year-to-date totals represent a 83 percent increase over the 30,404 loans endorsed during the same period last year. That is impressive growth for any industry.
The U.S. Department of Housing and Urban Development endorsed a total of 7,572 reverse mortgages in June. And it has endorsed 55,659 reverse mortgages thru the nine months of FY 2006 ending June 30.
To put that in prospective the FHA endorsed only 43,131 reverse mortgage loans for all of FY 2005. In fact year-to-date totals represent a 83 percent increase over the 30,404 loans endorsed during the same period last year. That is impressive growth for any industry.
Sunday, February 1, 2015
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