Inflation & Reverse Mortgage Solutions

Five Benefits of Reverse Mortgages during Inflation:

1. Supplementing Retirement Income: Inflation erodes the purchasing power of fixed incomes, making it challenging for retirees to cover everyday expenses. Reverse mortgages can provide a much-needed boost to retirement income by unlocking the equity built up in their homes. The additional funds can be used to pay for rising healthcare costs, essential household expenses, or even to indulge in enjoyable activities that enhance the quality of life.
2. Hedge against Inflation: Reverse mortgages provide a hedge against inflation by allowing homeowners to tap into the value of their homes, which typically appreciates over time. As inflation drives up the prices of goods and services, the value of the home also tends to rise. By accessing home equity through a reverse mortgage, homeowners can benefit from the appreciation of their property, thereby safeguarding their financial stability.
3. Non-recourse Loan Feature: One of the most advantageous features of reverse mortgages is the non-recourse loan provision. This means that homeowners or their heirs will never owe more than the appraised value of the home, even if the loan balance surpasses this amount. In times of inflation, if property values decrease, homeowners are protected from being saddled with excessive debt. They can walk away from the home without personal liability, allowing them to preserve their other assets and financial well-being.
4. Flexibility in Loan Disbursement: Reverse mortgages offer flexibility in how loan proceeds are received, allowing homeowners to customize their financial strategy according to their needs. During inflation, this flexibility becomes even more valuable. Homeowners can choose to receive regular installments or establish a line of credit to withdraw funds as needed. This adaptability enables them to effectively manage rising costs and unexpected expenses associated with inflation.
5. No Monthly Mortgage Payments: One of the most appealing aspects of reverse mortgages is that homeowners are not required to make monthly mortgage payments. This can be particularly beneficial during inflation, as retirees often struggle with the rising costs of living. Eliminating the burden of monthly payments allows homeowners to redirect their funds towards essential needs, effectively mitigating the impact of inflation on their overall financial stability.

Conclusion:

Reverse mortgages can serve as a powerful financial solution during times of inflation. By unlocking the equity built up in their homes, senior homeowners can effectively supplement their fixed income, hedge against inflation, and enjoy the flexibility and peace of mind that comes with a reverse mortgage.

However, the reverse mortgage is not for everyone.  Call Pete Tentler and learn if the reverse mortgage is your best choice or not.

Why the home could be one’s most valuable asset in retirement: financial planner

Unlock the Equity in Your Home…

With American seniors finding it more difficult to maintain their quality of life after retirement, many may be overlooking their most valuable financial asset in late life: their home. This is according to Julie Virta, a certified financial planner (CFP) in a new commentary published by Kiplinger . “According to recent Vanguard research , about 80% of Americans over the age of 60 are homeowners,

Source: Why the home could be one’s most valuable asset in retirement: financial planner

Forbes: Reverse Mortgages Part of Opportunity in Current Estate Planning

If a senior planning an estate has mortgage or other debt, there is a key opportunity that they may be able to take advantage of due to the current economic climate. Because interest rates are so low, refinancing that debt to take advantage of those rates can likely be a good economic strategy, and a reverse mortgage may fit into that equation.

Source: Forbes: Reverse Mortgages Part of Opportunity in Current Estate Planning

Financial Planner: Reverse Mortgages Can Offer Path to Retirement ‘Paycheck’

Managing finances in retirement can be difficult for a senior, most especially if someone is already strapped for cash. That makes the possibility of regular cash flow in addition to pre-existing benefit programs very attractive, and reverse mortgages can offer some seniors a viable path toward just such a path.

Source: Financial Planner: Reverse Mortgages Can Offer Path to Retirement ‘Paycheck’

Why Financial Advisors See Reverse Mortgage a Benefit in a Volalite Market

Positioning Reverse Mortgages as a Solution in a Down Market

March 27th, 2018  |  by Alex Spanko  |  HECM, News, Retirement, Reverse Mortgage

One of the most prominent scholarly advocates for using reverse mortgages in retirement laid out a case last week for finding opportunity in the volatile stock market.

“A reverse mortgage helps preserve a portfolio and gives it a chance to recover,” Wade Pfau, professor at the American College of Financial Services, said at the 2018 Housing Wealth in Retirement Symposium in Washington, according to a Forbes report.

Pfau and fellow Home Equity Conversion Mortgage researcher Barry Sacks examined the ways the products can become more attractive in bear markets at the event, which was co-sponsored by the American College and the Bipartisan Policy Center, a Washington-based think tank.

Forbes contributor Ted Knutson laid out the hypothetical example of a retiree who needs $3,000 per month from her portfolio to cover expenses for a year. If her index fund had a value of $250 per share, she’d have to sell 144 shares to recover that amount — or 180 shares if the stock market causes the fund to dip 25%.

“Home equity creates much more stability in retirement,” James Lockhart, the co-chair of the Bipartisan Policy Center’s Commission on Retirement Security, said at the conference, according to Forbes.

Back in February, when the stock market took its first tumble after seemingly endless good news, reverse mortgage originators told RMD that a short-term correction wasn’t enough to boost volumes — but that extended uncertainty could. Since then, the market has seen wild swings amid the president’s unilateral actions on trade, which could create an opening for HECMs to fill a need for retirees worried about a fluctuating Dow Jones Industrial Average.

Changing perceptions

Speakers at the conference noted the potential downsides of taking out HECMs, with MIT finance professor Deborah Lucas pointing out the costs and fees associated with a reverse mortgage. She pegged the average origination cost at $27,000, with a general guideline of $18,000 for $100,000 in HECM proceeds.

In general, however, the gathering emphasized the ways that the reverse mortgage industry have changed since the days “of operators evicting widows,” as Knutson put it. Former Treasury Department advisor Mark Iwry characterized home equity as a way to avert emergencies in retirement, while also acknowledging that retirement planners have largely neglected the asset class when looking at their clients’ overall financial health.

Jamie Hopkins, also an American College professor, suggested that employers should mention reverse mortgages to retirees during their exit interviews going forward.

“I find it shocking financial advisors haven’t paid much attention to housing wealth in retirement,” Hopkins said, per Forbes. “That has to change.”

Written by Alex Spanko

Tax & Financial Advisors See Reverse Mortgage Solution for Their Sandwich Generation Business Owners

Over the last year, tax and financial advisors witnessed a surge in reverse mortgage requests came from an unlikely source, the Sandwich Generation (A generation of people – between the ages of 34-54 – who are financially caring for their senior parents while supporting their own children.)

As we approach the busy tax season, CPA’s may want to find out how many of your business clients are members of the Sandwich Generation.

Sandwich Gen Stress
Here are problems business people of the Sandwich Generation experience that could be resolved with a reverse mortgage for their senior parents:

• Financial stress, which distracts from business affairs
• Added stress to home life and family members
• Senior parents’ preference to remain independent of their adult children, and live with dignity

In a recent study by the National Council on Aging, one-third of senior households have no money left over each month or are in debt after meeting essential expenses.  Their lack of sufficient funds puts added pressure on the children who are helping to support them. This leaves both parties vulnerable if the supporting “Sandwich Generation” families have their own unforeseen financial setback such as needing home repairs or medical treatment, or, even worse, having one of their household’s “breadwinners” sustain a job loss.

Advisor’s Solution
Fortunately, many advisors are now seeing reverse mortgages as a solution, not only for their senior clients but also for their clients in the Sandwich Generation.

• • • “I only thought a reverse mortgage would benefit those over 62 and only if they were house rich and cash poor.  Now I am learning that the reverse mortgage can be a solution to my business clients who are also supporting their parents, and alleviating the stress in their personal lives and families.”

Barry Z.  CPA
San Diego

Understand the Truths
To find out if a reverse mortgage can benefit your clients, call Pete at 858.999.1776 and schedule a personal, no obligation meeting at your office or your client’s home.

Pete Tentler is a Certified Reverse Mortgage Professional®. He has been serving the residential lending industry since 1990 and offering reverse mortgage solutions since 1994.  Over these years of service, his diligent focus and accountability, he has earned the status of trusted advisor to many financial planners, CPA’s, and legal advisors for their clients.

Tax & Financial Advisors See Reverse Mortgage Solution for Their Sandwich Generation Business Owners

Over the last year, tax and financial advisors witnessed a surge in reverse mortgage requests came from an unlikely source, the Sandwich Generation (A generation of people – between the ages of 34-54 – who are financially caring for their senior parents while supporting their own children.)

As we approach the busy tax season, CPA’s may want to find out how many of your business clients are members of the Sandwich Generation.

Sandwich Gen Stress
Here are problems business people of the Sandwich Generation experience that could be resolved with a reverse mortgage for their senior parents:

• Financial stress, which distracts from business affairs
• Added stress to home life and family members
• Senior parents’ preference to remain independent of their adult children, and live with dignity

In a recent study by the National Council on Aging, one-third of senior households have no money left over each month or are in debt after meeting essential expenses.  Their lack of sufficient funds puts added pressure on the children who are helping to support them. This leaves both parties vulnerable if the supporting “Sandwich Generation” families have their own unforeseen financial setback such as needing home repairs or medical treatment, or, even worse, having one of their household’s “breadwinners” sustain a job loss.

Advisor’s Solution
Fortunately, many advisors are now seeing reverse mortgages as a solution, not only for their senior clients but also for their clients in the Sandwich Generation.

• • • “I only thought a reverse mortgage would benefit those over 62 and only if they were house rich and cash poor.  Now I am learning that the reverse mortgage can be a solution to my business clients who are also supporting their parents, and alleviating the stress in their personal lives and families.”

Barry Z.  CPA
San Diego

Understand the Truths
To find out if a reverse mortgage can benefit your clients, call Pete at 858.999.1776 and schedule a personal, no obligation meeting at your office or your client’s home.

Pete Tentler is a Certified Reverse Mortgage Professional®. He has been serving the residential lending industry since 1990 and offering reverse mortgage solutions since 1994.  Over these years of service, his diligent focus and accountability, he has earned the status of trusted advisor to many financial planners, CPA’s, and legal advisors for their clients.

Reverse Mortgage Changes: The Good, The Bad, and The Ugly.

FHA will be making major changes to the reverse mortgage (HECM) beginning October 2^nd, 2017.  To avoid being affected by these changes, California applicants need to complete counseling and application, prior to September 22^nd, 2017.

Your time is valuable so I will give you a brief overview of the good, the bad, and the ugly changes, in reverse:

The Ugly
1) The FHA will be reducing lending limits by as much as 20% across the board.

This means that your client will qualify for less borrowing.  This would negatively affect your clients with large mortgage balances and many new applicants may not qualify or would be required to bring in additional funds for closings.

Here is an example:

Currently: A 62-year-old homeowner would qualify for a loan up to 52.4% of their current appraised value (FHA value limit $636,150).  A home value of $600,000 would allow a 62-year-old homeowner to qualify for a HECM loan amount of $314,400.

After October 2^nd: The same 62-year-old homeowner will qualify for only 41.7%, or $250,200.  That is over $64,000, or 20% less than currently.

2) Upfront mortgage insurance premium (UFMIP) will be 2% of the appraised value (FHA value limit is $636,150) regardless of mandatory obligations (mortgage and other liens).

Currently:  If the homeowner’s mandatory obligation is less than 60% of the approved loan amount, the UFMIP is one-half percent (.50%) of the appraised value.

After October 2^nd:  Regardless of the borrowers’ mandatory obligations, their closing costs would increase to 2% or four-fold.  This would have a negative effect on applicants that own their home free & clear

The Bad
The annual credit line growth rate will be reduced by .75%.  Currently, the unused portion of the borrower’s HECM equity credit line increases monthly at an annual rate between 5.232% and 7.203%, based on the option chosen by the borrower.

Currently: A borrower with $300,000 available on their HECM credit line, would see an increase in borrowing power to $316,077 in the first year, based on a credit line growth rate of 5.232%.

In 10 years, the same $300,000 would have increased to $505,650 of borrowing power.

After October 2^nd:  $300,000 would increase to $313,725 in the first year, based on a credit line growth rate of 4.482% (.75% less than 5.232% in the currently scenario).

In 10 years, the same $300,000 scenario would increase to $469,255.  That is $36,394 less than currently.

The Good
After October 2^nd, the ongoing annual mortgage insurance premium will be reduced from one and a quarter percent (1.25%) of the outstanding balance, to one-half percent (.50%) of the outstanding balance.

This will mean the outstanding balance borrowed on a HECM will increase .75% slower than currently.

The Better:
Homeowners can avoid these drastic changes as long as they complete their application and the counseling session prior to September 22^nd, 2017.

Please feel free to call Pete Tentler (858) 999.1776, with any questions you might have and to learn how to begin the reverse mortgage process before the changes.

Pete Tentler Earns Distinguished​ Reverse Mortgage Designation from NRMLA

FOR IMMEDIATE RELEASE
August 2, 2016

Local Businessman Earns Reverse Mortgage Designation

San Diego, CA—Peter Tentler, a Reverse Mortgage Advisor with Liberty Home Equity Solutions, joined an elite cadre of mortgage professionals who have achieved the status of being a Certified Reverse Mortgage Professional (CRMP). Tentler earned the designation after he passed a rigorous exam and background check, thereby demonstrating a competency in the area of reverse mortgages and a dedication to upholding the highest ethical and professional standards.

Only 139 individuals nationwide currently have the CRMP credential.

“Being one of 139 people nationwide to have achieved this milestone is a testament to my commitment to reverse mortgages,” says Tentler. “The process involved to receive this professional designation was long and arduous and adds to the level of expertise maintained by myself and the firm.”

“Peter is one of 139 individuals with the Certified Reverse Mortgage Professional designation. As a CRMP, he has demonstrated knowledge and competency in the area of reverse mortgage lending, and is dedicated to upholding high standards of ethical and professional practice in the industry, ” said Peter Bell, President, and CEO of the National Reverse Mortgage Lenders Association.

Reverse mortgages are available to homeowners 62 years old and older with significant home equity. They are designed to enable older Americans to borrow against the equity in their homes to help fund retirement needs, without having to make monthly payments as is required with a traditional “forward” mortgage or home equity loan. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells, or passes away. Borrowers may draw down funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as they continue to live in the home. To date, more than 963,000 senior households have utilized an FHA-insured reverse mortgage.

About Peter Tentler:
Pete Tentler is a Reverse Mortgage Advisor for Liberty Home Equity Solutions. He has been serving in the residential lending industry since 1990 and offering reverse mortgage opportunities since 1994. Over these years of service, his diligent focus and accountability to every client’s needs, he has earned the status of trusted advisor to many financial wealth managers, CPA’s, bankers, and legal professionals, for their clients.

Many of his clients and advisors have introduced Pete as The Financial Locksmith® because he will unlock the equity in your client’s home, so they may secure their financial future.

A Rotarian since 1999, Pete is a Paul Harris Fellow and Past President (2003-04) of the La Jolla Sunrise Rotary Club. He is currently a member of the San Diego Downtown Breakfast Rotary Club and serves as chair of the Ambassador Committee.

In addition, he was the Chairman of the Board of Trustee (2014-15) with the Business Executives Council (founded in 1971). Pete is also the founder and chairman of MAP – a college student mentoring endeavor which matches students with some of the area’s finest business leaders, who share their methodology of business success and encourage life and career goals with students, soon to enter the business world. MAP works in collaboration with USD, PLNU, and SDSU.

Pete was Chairman of the Social Committee (2005), Golf Committee (2005-07), and co-architect of the club’s sponsorship program at Morgan Run Club and Resort in Rancho Santa Fe.

Born and raised in Chicago and alum of Loyola University Chicago, Pete is an avid golfer, voracious reader, and sports enthusiast.

About the National Reverse Mortgage Lenders Association:
The National Reverse Mortgage Lenders Association (NRMLA) is a membership organization comprised of over 300 companies and more than 2,000 people participating in the reverse mortgage industry. NRMLA serves as an educational resource, policy advocate and public affairs center for lenders and related professionals. NRMLA was established in 1997 to enhance the professionalism of the reverse mortgage business.

For information contact:
Darryl Hicks, Vice President, Communications
202-939-1784; dhicks@dworbell.com

Tax & Financial Advisors See Reverse Mortgage Solution for Their Sandwich Generation Business Owners

Over the last year, tax and financial advisors witnessed a surge in reverse mortgage requests came from an unlikely source, the Sandwich Generation (A generation of people – between the ages of 34-54 – who are financially caring for their senior parents while supporting their own children.)

As we approach the busy tax season, CPA’s may want to find out how many of your business clients are members of the Sandwich Generation.

Sandwich Gen Stress
Here are problems business people of the Sandwich Generation experience that could be resolved with a reverse mortgage for their senior parents:

• Financial stress, which distracts from business affairs
• Added stress to home life and family members
• Senior parents’ preference to remain independent of their adult children, and live with dignity

In a recent study by the National Council on Aging, one-third of senior households have no money left over each month or are in debt after meeting essential expenses.  Their lack of sufficient funds puts added pressure on the children who are helping to support them. This leaves both parties vulnerable if the supporting “Sandwich Generation” families have their own unforeseen financial setback such as needing home repairs or medical treatment, or, even worse, having one of their household’s “breadwinners” sustain a job loss.

Advisor’s Solution
Fortunately, many advisors are now seeing reverse mortgages as a solution, not only for their senior clients but also for their clients in the Sandwich Generation.

• • • “I only thought a reverse mortgage would benefit those over 62 and only if they were house rich and cash poor.  Now I am learning that the reverse mortgage can be a solution to my business clients who are also supporting their parents, and alleviating the stress in their personal lives and families.”

Barry Z.  CPA
San Diego

Understand the Truths
To find out if a reverse mortgage can benefit your clients, call Pete at 858.999.1776 and schedule a personal, no obligation meeting at your office or your client’s home.

Pete Tentler is a Certified Reverse Mortgage Professional®. He has been serving the residential lending industry since 1990 and offering reverse mortgage solutions since 1994.  Over these years of service, his diligent focus and accountability, he has earned the status of trusted advisor to many financial planners, CPA’s, and legal advisors for their clients.