Financial Planning Using a Reverse Mortgage

reverse mortgageAs of September 23rd, a new rule from the US Department of Labor will require stricter fiduciary duties when a trusted financial services provider gives investment advice about retirement-focused investments. The financial adviser community is a popular referral source for a reverse mortgage professional. Why?

The simple discussion of a reverse mortgage between a financial advisor and their clients lends more credence to the product category. Moreover, more and more retirement planners are starting to see the value of the reverse mortgage program in an overall comprehensive financial plan. Since home equity can make up a large percentage of an individual’s net worth, the question arises: what’s taken so long? Regardless, let’s explore ways that a reverse mortgage may help play into an overall financial plan.

Long-Term Care Management Costs

First, have you looked into the cost of assisted living? What about a long-term care insurance policy? Premiums often run $10,000 – $15,000 per year, or more. Therefore, a reverse mortgage could help offset these costs and aid in your planning.


Next, consider a divorce later in life. It isn’t what anyone thinks of, but sadly, it happens. How do we manage the associated costs of two households after the divorce? For example, I once had someone tell me that he wished he was wealthy enough to be able to afford a divorce – he didn’t want one, he just wished he was wealthy enough. Sadly, it happens and we just need to be able to afford it when it does.

reverse mortgageH4P (Home Equity Conversion Mortgage for Purchase)

Additionally, a little-known program is the reverse mortgage for purchase program. It helps someone buy a home. No one wants a house payment when they retire, but they often want to move into a new home. Moving is often due to downsizing, wanting one-story living, divorce, or simply to be closer to family. The reverse mortgage for purchase allows you to buy a new retirement home without putting down 100%, and without having a monthly payment. Perhaps you don’t have enough to pay cash, or maybe you do; but with the H4P, you can keep money in the bank for retirement and never have a monthly payment to worry over.

Sequence of Returns Risk Offset

Moreover, using a reverse mortgage will extend the value of your portfolio/savings when the “markets” decline. However, some don’t understand the concept. This concept is simple math, and it’s proven. Take time to learn if you aren’t already familiar with it. It may save your portfolio in times of a down market. For instance, Google Barry Sacks & Reverse mortgage, or I’d be happy to send you the study by Mr. Sacks.

Pay Off Existing Mortgage

Furthermore, if it’s used to simply pay off an existing mortgage, monthly required debts are reduced while monthly disposable income increases. Without this monthly payment, you could lower draws from your portfolio and prolong its lifespan.

Stay safe everyone, and may God bless you all. – David Stacy

Ready to secure your financial future with a reverse mortgage? Contact David Stacy Reverse Mortgage Specialist today to learn how our expert services can help you find the best loan options tailored to your needs!

David Stacy Reverse Mortgage Specialist
Myrtle Beach, SC 29577
(843) 491-1436
Reverse Mortgage Specialist
Columbia, SC 29205
South Carolina Reverse Mortgage Services
Charleston, SC 29401