Are some common beliefs about reverse mortgages actually myths? Robert "Bob" Powell sits down with Don Graves, Founder of the Housing Wealth Institute, to discuss how a reverse mortgage can unlock crucial equity that can be used to make the most of your retirement.
In the full episode of Decoding Retirement, Bob and Don discuss the intricacies of reverse mortgages and what kind of homeowners can benefit from them the most.
Catch the full episode with Don Graves on Yahoo Finance's Decoding Retirement. Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Dennis Golin. Find more episodes of Decoding Retirement at http://www.goldberglawma.com/?id=videos/series/decoding-retirement. Thoughts? Questions? Fan mail? Email us at yfpodcasts@yahooinc.com.
This post was written by Dennis Golin.
that house you had, your $700,000 house, 20 years later, has doubled in value. So now you've got a $1.4 million home, your reverse mortgage balance is $500,000. I'm just making up numbers. The heir is the estate. They sell the house for 1.2, they pay off the five. There's $700,000 left to the heirs or to the estate. And that's something that some people don't realize. Oh, wait a minute. I thought that's the loan where the bank loans you the money and when you die they take the house. No, no, that'd be criminal. But that's one of the misconceptions or Don, you can get put out of the house. Oh, don't get the reverse. No. Living it, take care of it, pay your taxes, keep insurance in force. Those are the four requirements. So, some of the mythologies or the common misconceptions are, I can lose the house. I can get put out of the house. If I run out, if I spend all the money down at the river boat, they'll come. No, no. So, Don, a lot of times people ask when they think about a reverse mortgage is, well, I really want my children to inherit my home after I pass on. And is that even possible with the reverse mortgage in place?
Absolutely. Depending, there are 52 ways we teach to structure this. And I say, what if I told you that you could leave your children four times the amount of money by using a reverse mortgage? And that's the work we've done at the American College and other places that says, if you've got a portfolio and a million dollars, and sometimes the it dips. And if you're taking money out during the dips, that's going to contract the length of that portfolio. So, all advisors know if my clients or you watching, maybe you're a consumer yourself, if I don't have to take money out during the dips and lock in the loss, that's going to prolong it, but I have to eat during the dips. So if you've got another asset, cash equivalent, life insurance, or the reverse mortgage line of credit, using that is going to prolong your portfolio. And the research we've done says that if you do that one to four times early in retirement, the difference is amazing. It's counterintuitive. Yeah. And so that's one way. So you leave your If I said you can leave your children more. But the example I just gave you, I said, you leveraged your house, you did whatever you needed to do, and you left your children whatever you left them.
This content was not intended to be financial advice and should not be used as a substitute for professional financial services.
