Show your clients how a home equity solution could better their retirement

Did you know, 77% of most retirees’ net worth is tied up in their homes*? Helping your clients unlock and leverage some of that home equity as part of an overall retirement strategy can prove a winning move for you and your clients.

*Marketwatch



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Integrate Home Equity as a Retirement Solution for Your Clients

If you’re always on the lookout for ways to help your clients lead a better retirement, consider adding a Home Equity Conversion Mortgage (HECM) to bring greater balance, diversification and risk management to their portfolio.

It’s a home equity solution that has been specifically designed for homeowners 62 and older who own their home or have only a small remaining mortgage on it.

The advantages to your clients are two-fold:

  1. They continue to live in their home without making future monthly mortgage payments.
  2. They can receive tax-free home equity disbursements in the form of loan proceeds that doesn’t have to be repaid until they leave the home¹.

HECM borrowers, however, must maintain the property, pay property taxes and homeowner’s insurance and otherwise comply with the loan terms.

With a HECM, your clients can budget, save, invest and plan for a better retirement.

Financial Professionals

EXAMPLE:

An eligible couple lives in a home valued at $450,000 and owes $100,000 on their mortgage. They take out a HECM loan and pay off their current mortgage, which eliminates their monthly payment1 and opens a $75,194 line of credit. This line of credit grows over the next 10 years to be worth $130,947. Without a monthly mortgage payment, they may not need to draw down their 401(k) to supplement monthly income*

This example is based on the youngest borrower age 65, home value of $450,000, IMIP of $9,000, origination fee of $6,000 and other settlement costs of $3,306. HECM ARM as of 08/02/2018.



With a HECM, your clients may:

  1. Respond better to market swings. Your clients can access their loan proceeds during market downturns rather than draw down their investments. Similarly, by using their loan funds to supplement their income, they may be able to delay taking social security benefits until they reach full retirement age.
  2. Create more cash flow. Without a monthly mortgage obligation, your clients will free up money to serve other needs and goals¹.
  3. Open line of credit. Unlike a traditional Home Equity Line of Credit (HELOC), securing a line of credit with a HECM requires no monthly mortgage payments¹. If unused, the line grows over time.
  4. Purchase a home. If you have clients seeking to downsize or move closer to family, friends and more of the lifestyle amenities they enjoy, they can purchase a new home, with a combination of their funds and a HECM loan. Because the HECM doesn’t typically have to be repaid until they leave the property, your clients may achieve greater liquidity¹.
  5. Pay for in-home care. According to The Joint Commission, home care can help many patients achieve optimal health outcomes². With a HECM, your clients may gain greater financial flexibility over their health care decisions, including the choice of aging and living comfortably in place.

And if your client owns a high-value home, consider an AAG Advantage loan.

Additional features with the AAG Advantage loan:

  1. No capital gains or income tax on loan distributions³
  2. All loan proceeds accessed in one lump sum
  3. No mortgage insurance required

¹Borrower must continue to pay property taxes, homeowner’s insurance and home maintenance costs.

²“Home-The Best place for Health Care”- The Joint Commission.2011. Web.22 Jan 2016. http://www.johnahartford.org/images/uploads/ resources/Home_Care_position_paper_4_5_111.pdf

³Capital gains taxes are only due upon a sale. A Jumbo Reverse Mortgage is a loan, secured by a mortgage on the home, and does not require sale of the home. The proceeds of a loan are not taxable as income.

Below are a number of free, comprehensive financial tools you can use to strategize, plan, measure risk, and engage new prospects. Click on any of the tools below to start.

Identifying Opportunities in Home Equity

This flyer explains how to know when a client is a good fit for a Home Equity Conversion Mortgage (HECM) loan. Use this information to have a positive impact on your clients' financial longevity, liquidity, and legacy.

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HECM Loan Basics for Financial Professionals

Learn more about how Home Equity Conversion Mortgage (HECM) loans can be a powerful solution for your clients who are 62 or better.

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AAG Advantage Loans - Help Clients Access More

Access MORE with the AAG Advantage Reverse Mortgage. AAG's proprietary advantage loan may allow your clients to convert home equity into more loan proceeds than a traditional reverse mortgage – that’s the AAG jumbo reverse mortgage!

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Rethink Reverse

We share your mission of putting the financial security of your customers first and can appreciate the hard work and attention to detail associated with balancing portfolio construction and risk management for long-term success. This booklet explores the use of home equity in retirement planning as an essential in balancing clients' short-term concerns with long-term goals.

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Complimentary Webinars for Financial Professionals

Join us at American Advisors Group for our latest complimentary webinars exclusively for financial professionals. Register today for these effective business building strategies and find out why the top financial advisors in the nation trust American Advisors Group.
Click on the links below to register.

Home Equity Solutions for Mass Affluent Retirees in an Uncertain Market

Now more than ever, the need to diversify is evident. Home Equity Conversion Mortgage (HECM) loans are a flexible financial tool that can be integrated into multiple strategies for your affluent client families. In this 60-minute CE approved session, you'll:

  • Learn strategies that provide payment flexibility using a reverse line of credit
  • Understand how to protect access to home equity even if we see a downturn in real estate
  • See how access to equity can provide an alternative to taking withdrawals and realizing losses in investment portfolios
  • Obtain working knowledge of the unique features of a growing line of credit with payment flexibility
  • Hear what other advisors and professionals are saying about home equity strategies that are contrary to common belief

Watch Now

Monetizing Home Equity to Benefit Clients and Your Business

With home equity representing the largest asset on many of your clients’ balance sheets, doesn’t it seem prudent to consider responsible and effective ways to include it in your plan design? Join us as we share solutions and case studies designed by advisors, for advisors, to uncover risk mitigation strategies you may not know exist. In this 60-minute CE approved session, we’ll discuss:

  • Why home equity matters
  • How home equity is being used by clients and their advisors
  • Traps, hurdles, and hidden fees
  • The impact on your business

Watch Now

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HECM Line of Credit vs. HELOC

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News & Updates

Financial Disaster Equals New Opportunity

In an environment where seniors’ retirement futures have already been put at risk by dwindling savings and disappearing pensions, the idea of the reverse mortgage is to allow a senior to use the equity in their home to either meet necessary expenses in old age, or to enhance their quality of life in retirement. Read […]

Read More

Don’t Overlook Reverse Mortgages in a Crisis

While recent legislation aimed to assist Americans in the midst of economic turmoil caused by the COVID-19 pandemic has been beneficial, mortgage forbearance options made available to people through the Coronavirus Aid, Relief, and Economic Security (CARES) Act have not addressed other living expenses that could leave people on fixed incomes vulnerable. This is why […]

Read More

Senior Housing Wealth Hits Record High of $7.54 Trillion

Homeowners aged 62 and older saw their collective housing wealth increase in Q1 2020 by 1.6% compared to the previous quarter. This constitutes an increase of approximately $120 billion to a record of $7.54 trillion. Read more…

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