For many seniors in or entering retirement, the
prospect of purchasing long-term care, investments or annuities can be cut short
by a lack of retirement income. Statistics show that 3 out 4 seniors will have
to lower their current standard of living during retirement. Social Security,
IRA's, 401k's, and other methods of retirement income usually provide enough
income for living expenses and recreational activities, but do not leave much
room to improve your financial future. A Reverse Mortgage is an increasingly
popular solution for increasing income, and large amount of tax-free funds to
safely move into investments and securities.
Reverse Mortgages are Federally regulated and guaranteed financial vehicles that
allow a senior, age 62 or above, to extract a large amount of the equity locked
in most senior's largest illiquid asset: the home. A Reverse Mortgage will
provide a percentage of the home's appraised value, usually 20-60%, in a variety
of different payout methods, but the senior is never required to make a payment
on the loan for as long as they live in the home. All repayment, closing cost,
and interest are repaid when the senior moves or the home is sold, so it
produces a large amount of capital with absolutely no risk of default or
foreclosure on the home. "There a is Reverse Mortgage myth that the bank can
take your home, that is totally false" says Troy Shellhammer of
Reverse Mortgage Nation.
All funds generated with a Reverse Mortgage are tax-free. They also will NOT
impact any social security or Medicare benefits. This vehicle becomes very
attractive when looking at ways to increase income or an investment portfolio.
Example: A couple who are both age 65, with a home value of $200,000, zero
mortgage, and are looking to either purchase an immediate annuity or a joint
long-term care insurance policy. A Reverse Mortgage could potentially provide
over $100,000 to fund the annuity or a single premium insurance policy, with
interest growth and a long-term care rider.
The true power of the Reverse Mortgage as an investment tool lies in two aspect
of the product. The first is that any funds generated from a Reverse Mortgage
are completely tax free, and will not affect the tax bracket of the applicant.
The other is the single largest asset of most seniors is their home. The home is
a peculiar investment because the only way to see a real return from the growth
of the home's value through its appreciation is to sell the home, or liquidate the
entire asset.
A Reverse Mortgage lets the savvy senior employ the appreciation of the home
without having to leave the home, or make any payments on the loan. These are
some of the reasons that in last three years, the average of Reverse Mortgage
loans produced nationwide has risen almost 300%, along with a rise in loans done
on homes with values of $500,000 and up rising almost 500%.
Troy Shellhammer is a Reverse Mortgage specialist
with Next Generation Financial Services, a division of 1st Mariner Bank. He
advises seniors on the Reverse Mortgage process and produces Reverse Mortgage
loans nationwide.
Please visit his website at:
http://www.reversemortgagenation.com/troyshellhammer
or call 1-888-9 REVERSE for any questions, information, or an estimate on what
you or your friends and relatives may receive with a Reverse Mortgage.