1. When the homeowner doesn’t need it. One of the most powerful aspects of the FHA HECM is the option of a “stand by” line of credit. For very little cost the reverse mortgage Line of Credit, with its built in growth factor, can create a line of Tax Free funds that in 8 to 10 years eclipses the original value of the home. Think of this as an “equity hedge” insurance strategy.
2. Social Security maximization. File and suspend, use income from housing wealth until max benefit age achieved.
3. Retire an existing mortgage eliminating monthly mortgage payments. Reduces monthly expense, allows other investment accounts to remain more intact.
4. When current retirement plans have not been able keep up with their cost of living… housing wealth is available through the safest mortgage option available, the FHA HECM, the modern Reverse Mortgage.
5. Purchase a New Home or Home Improvement. Many older homeowners are facing either deferred maintenance issues or require retrofit for aging in place such as iramps, hand rails, pull out cabinets, etc… Or a new home that is age appropriate can be purchased using a Reverse Mortgage
6. Lifestyle… difficult to put a price on being able to enjoy retirement while a homeowner is physically able to actually enjoy retirement… travel, hobbies, gifting to children or grandchildren…
7. Legacy. Funds from the FHA HECM have no restriction in use. HUD will require full disclosure of intent to purchase other financial products such as life insurance, long term care, annuities, which can be funded by HECM proceeds.
8. Pay off credit card or medical bills. Even if the homeowner chooses to make monthly payments the FHA HECM interest rates are usually much lower than other finance options. Plus, the homeowner has the option to never make a monthly payment at all.
9. Assisted living benefit for a spouse that is forced out of the home. Many times, with married couples, one will have an incident that requires them to seek living options outside the home. As long as one spouse remains a permanent resident of the home the reverse mortgage remains a viable option for funding care.
10. Foreclosure rescue. Many times homeowners have adequate equity but are facing foreclosure. The FHA HECM can save their home, and their equity. And all with the safety, security and peace of mind knowing that the homeowner will be able to remain in your home, without the need to make monthly mortgage payments. Simply continue to pay property tax, insurance and Home Owners Association dues per usual.