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Another Case for Reverse Mortgages

May 20, 2016 by admin

With more and more people taking a look at the financial sense of Reverse Mortgages, the Wall Street Journal weighs in with another article on why they might make the most dollars and cents for you.

“Intuitively, there are two reasons why opening a reverse mortgage earlier in retirement has the potential to improve retirement efficiencies despite the reverse-mortgage costs for those wishing to remain in their homes.

First, coordinating draws from a reverse mortgage reduces the strain on investment portfolio withdrawals, which helps to manage the sequence of returns risk facing retirees. Retirees are more exposed to investment volatility because volatility has a bigger impact on financial outcomes when taking distributions from the portfolio as compared with when adding new funds to the portfolio. Reverse mortgages provide a buffer asset to sidestep this sequence risk by providing an alternative source of spending after market declines.

The second potential benefit for opening the reverse mortgage early, especially when interest rates are low, is that the principal limit that can be borrowed from will continue to grow throughout retirement. Reverse mortgages are non-recourse loans, and for sufficiently long retirements, there is a reasonable possibility that the line of credit may grow to be larger than the value of the home.”

http://blogs.wsj.com/experts/2015/11/30/the-new-case-for-reverse-mortgages/

When you’re done, take a look at our Reverse Mortgage Center and see how we can help you reach your goals.

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Filed Under: Reverse Mortgages

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Lynchburg, Virginia 24504
(434) 846-1300 Phone
(434) 846-7670 Fax

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