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



icon

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 eliminated their 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.

Read

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.

Read

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!

Read

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.

Read

Currently, there are no webinars scheduled at this time. Please check back or for immediate assistance, contact us at (866) 680-8351. Thank you!

loading-image

article 1

Focusing on Smart Use of Housing Wealth

As defined benefit plans and pensions become a thing of the past, researchers continue to extoll home equity’s critical role in retirement income planning. For some time, a group of academics and financial planning professionals have sought to spread that message, forming the Funding Longevity Task Force to drive this mission and working in partnership with the […]

Read More
article 1

Financial Advisor: Don’t Ignore Reverse Mortgages

Although they can often be a tough sell, reverse mortgages can likely help financial clients who find themselves running out of money in retirement. This is according to an article appearing in Financial Advisor by writer Dan Jamieson. Learn more…

Read More
article 1

FINRA’s Evolution on Reverse Mortgages

The Financial Industry Regulatory Authority (FINRA) describes its stance on reverse mortgages in a report titled, “Reverse Mortgages: Avoiding a Reversal of Fortune.” While that title has negative connotations, it doesn’t explain that the contents of the report have evolved over the past several years, even if its title may not have. Read more…

Read More
article 1

A Reverse Mortgage is Not a Last Resort

Reverse mortgages are traditionally thought of as a last-resort option for seniors who want to stay in their homes but have little resources and few options left. But research has proven otherwise. Check it out…

Read More
article 1

Debunking Reverse Mortgage Critics’ Misconceptions

When examining the totality of negative press that reverse mortgage products have to endure, many of the most persistent reputational hurdles faced by the products arise from people viewing the products themselves in isolation as opposed to a single part of a larger retirement strategy. Read more…

Read More
article 1

Social Security to Run Out of Funds in 2036

The financial landscape for Social Security and Medicare federal entitlement programs, two of the most important programs in the social safety net for American seniors, has been given a bleak forecast concerning the financial solvency of the programs according to a government report issued earlier this week by the Social Security Administration (SSA) and Cabinet […]

Read More

Call us today: (866) 680-8351

For industry professionals only – not intended for distribution to the general public.

American Advisors Group, NMLS #9392, headquartered at 3800 W. Chapman Ave., 3rd & 7th Floors, Orange, CA 92868.

News & Updates

Focusing on Smart Use of Housing Wealth

As defined benefit plans and pensions become a thing of the past, researchers continue to extoll home equity’s critical role in retirement income planning. For some time, a group of academics and financial planning professionals have sought to spread that message, forming the Funding Longevity Task Force to drive this mission and working in partnership with the […]

Read More

Financial Advisor: Don’t Ignore Reverse Mortgages

Although they can often be a tough sell, reverse mortgages can likely help financial clients who find themselves running out of money in retirement. This is according to an article appearing in Financial Advisor by writer Dan Jamieson. Learn more…

Read More

FINRA’s Evolution on Reverse Mortgages

The Financial Industry Regulatory Authority (FINRA) describes its stance on reverse mortgages in a report titled, “Reverse Mortgages: Avoiding a Reversal of Fortune.” While that title has negative connotations, it doesn’t explain that the contents of the report have evolved over the past several years, even if its title may not have. Read more…

Read More

A Reverse Mortgage is Not a Last Resort

Reverse mortgages are traditionally thought of as a last-resort option for seniors who want to stay in their homes but have little resources and few options left. But research has proven otherwise. Check it out…

Read More

Debunking Reverse Mortgage Critics’ Misconceptions

When examining the totality of negative press that reverse mortgage products have to endure, many of the most persistent reputational hurdles faced by the products arise from people viewing the products themselves in isolation as opposed to a single part of a larger retirement strategy. Read more…

Read More

Social Security to Run Out of Funds in 2036

The financial landscape for Social Security and Medicare federal entitlement programs, two of the most important programs in the social safety net for American seniors, has been given a bleak forecast concerning the financial solvency of the programs according to a government report issued earlier this week by the Social Security Administration (SSA) and Cabinet […]

Read More