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Reverse Mortgages hold advantages for the ‘mass-affluent’
Last Monday the Huffington Post published “Is a Reverse Mortgage a Lucrative Option with your Financial Situation?”. Cited in the article was a white paper published by Edinboro University stating that using a HECM line of credit is more lucrative than selling investments. This speaks to the mass-affluent borrower with substantial retirement savings and investments as opposed to the needs-based-borrower of the past.
Beyond merely preserving the portfolio by not selling depreciated assets the study cites the tax benefits. “Commonly, retirees will use 401(k) funds, or other savings to pay off a mortgage. But if there’s enough equity in the home, the reverse mortgage could be used instead of using tax-deferred savings.” A good point since qualified…
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