It was the year 2009 when the Federal Housing Administration introduced its new product HECM for purchase, which enabled older Americans to secure their retirement. So far, this HECM reverse mortgage has been little used. It was due to lack of research and proper education about these mortgage solutions that lead to misinformation in mainstream media. But now, these loans are steadily gaining popularity for the unique and beneficial features they offer borrowers. Today, the Hawaii Reverse Mortgage is a viable planning tool that has helped more than one million homeowners of age 62 and above to lead a comfortable retirement.
Earlier people used to consider HECM reverse mortgage as a last resort, but this is no longer true today. In fact, it is the best way to improve your retirement income plan, which lets you convert the home equity from your primary residence into a fixed income stream if you are at least 62.
However, many people are skeptic about reverse mortgages, which is not at all bad because it is always important to exercise caution while utilizing debt. But believe me, there are so many uses of reverse mortgage that it will improve your retirement spending outcomes in a sensible way. Discussed below are the four ways in which an HECM reverse mortgage will improve your retirement income plan.
• Helps In Coordinating Your Expenditure With Your Portfolio: One of the biggest risks for retirees making withdrawals from their investment portfolios is enduring a period of negative stock market returns in the initial years of retirement. The HECM reverse mortgage will help mitigate this risk with the help of its standby line of credit feature. It can be used as a buffer to protect against adverse portfolio returns early in retirement.
Read More: A Know How About Reverse Mortgages In Hawaii
• You Don’t Need To Delay Your Social Security Benefits: The best part about taking a reverse mortgage is that it will produce a bridge income, which can be used to replace all or a portion of the income your social security benefits would have provided. So no more delays once you have an HECM reverse mortgage with you.
• An Easy Funding Option For Paying Taxes For Roth IRA Conversions: An HECM reverse mortgage is of great help to retirees who are rolling over their traditional IRAs or Roth IRAs, where they are asked to pay taxes upfront for creating a tax-free income source for the future. This is where reverse mortgage plays its role. When your after-tax investments or cash accounts get limited, reverse mortgage income can be used.
• You’ll Be Able To leave Larger Inheritance For Heirs: You might think reverse mortgage would reduce an inheritance you hope to leave your heirs. This could be true but it’s not necessary. An HECM reverse mortgage is a protective hedge against the value of your home. It won’t leave your heirs on the hook for the debt.
So, for all those retirees who think their retirement savings have been hammered by the down market, it’s time they should start looking for a professional reverse mortgage lender in Hawaii.
