For a long time, reverse mortgages were thought of as a ‘last resort’ of sorts for cash-strapped seniors. In recent years, though, reverse mortgages have become a more common (and more respected) form of retirement planning and finance. At Reverse Mortgage Financial Solutions (RMFS), we work with seniors on reverse mortgages—from the enquiry and consultation phase to the process of planning the most effective reverse mortgage strategy given the circumstances.
We firmly believe that a reverse mortgage for seniors can make the retirement years easier in a lot of ways. Certainly, borrowing money against your home equity can be reckless if you don’t have a plan in place for how to use the funds or limit your risk. However, by working with a credit advisor who understands reverse mortgages and how they work, you can absolutely incorporate reverse mortgages into your retirement strategy responsibly and effectively.
How Reverse Mortgage Loans Benefit Retirees
Most seniors have a few different portfolios or accounts that they have used for years to save money for retirement. The most common type of retirement plan for Australians is the superannuation fund, which is usually set up and provided by an employer. You might also have money in a stock portfolio, which you use to build wealth and maintain a steady income stream over time.
Sometimes, these retirement funds and income sources are sufficient to help seniors navigate the expenses and challenges of retirement. However, there are certain situations in which you may want or need another source of cash. For instance, perhaps your stock portfolio hits a down period and stops delivering the returns that you usually use to pay your living expenses. These down periods can last weeks, months or even years. What do you do to make it through a lean period to reach a more profitable stock year?
Reverse mortgage loans can be incredibly useful in this kind of scenario. Your reverse mortgage can essentially give you a ‘Plan B’ for keeping yourself afloat and covering your regular expenses. Having the option of using the reverse mortgage funds in bad stock years and then switching back to your portfolio as a primary source of income when things turn around will provide you with peace of mind and extra financial security.
Similarly, if you have a major expense you need to plan for—such as a new car or family vacation—it might not be the best idea to use your stock earnings or superannuation money for that purpose. Reverse mortgages can provide a solid supplementary cash flow option in these cases.
Learn More about Reverse Mortgages from RMFS
At RMFS, we would be happy to speak with you about reverse mortgages for seniors. Even if you aren’t sure whether you need another source of cash for your retirement, it isn’t a bad idea to learn about the basics and benefits of reverse mortgages. Our team at RMFS is extremely experienced in crafting reverse mortgage loans for seniors that make sense and deliver the pros of a reverse mortgage without exposing the client to many of the cons. To get started with us, reach out today.