I’m a reverse mortgage specialist who closed a for an unique family. They owed nothing on their home. The family’s residence greatly exceeded the maximum claim amount. The husband was still working as a consultant and brought in enough for living expenses and property taxes. With their financial abundance including the equity from the residence, was it necessary to draw money from their home?
During my inquiry, I found out that their son had recently completed Veterinary School and was about to begin his own practice. They decided to assist they son with the creation of his new business with funds from a Reverse Mortgage. Imagine the pride they will feel once their son has built a thriving business with their direct influence.
This was an intelligent to proceed this way for several reasons:
These funds are not taxed (Tax-Free).
2 – The Funds from the Reverse Mortgage came in a Line of Credit. The funds were doled out in identifiable increments for the purpose of the business only. Many seniors that are in the process of creating a Trust are asked themselves, “What is going to happen if our Son/Daughter gets all of their inheritance in one lump sum?” In too many cases that money gets spent frivolously by a generation that is not used to having large sums at their disposal.
Trying to refinance their home, would have lead for it to be denied. The lending institution usually looks at your situation much differently when your income drops due to reaching a particular age. Regardless of whether social security and equity is present. Applying many times at multiple banks will more than likely be a waste of time.
#4 – The process is fast and painless. I had an evening of educating them about this product and how they could benefit from it. This family had already been through HUD Counseling (a required step). I collected a few documents and signatures on the application. The loan was closed in less than 30 days since there is no payoff to schedule.
If you have any questions or would like more information on this topic feel to contact me or click this. Also if you reside near the Santa Ana area, I host a weekly lunch presentation. Follow me on Meetup for updated events.
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