Last time we talked about a presentation on the potential use of reverse mortgages in financial planning made by Dr. John Salter at the National Reverse Mortgage Lenders Association annual meeting in Boston.
As Dr. Salter explained, a financial plan can be described as involving an investment portfolio and a cash reserve fund (CFR). The CFR is the cash available to the investor for day to day expenses, and as it is constantly being used, is a fund that must be regularly replenished from the investment portfolio.
The problem is that when money is needed in the CFR, it may not be the best time to liquidate assets in the investment portfolio.
Enter the “Standby Reverse Mortgage.”
Simply stated, a reverse mortgage line of credit can be a standby source of cash for the CFR at such times when it is not advantageous to liquidate investments. The sneak peak presentation left the strong impression that using a standby reverse mortgage over a period of years can have a significant positive impact on net worth.
As we said last week, it looks like the mainstream use of reverse mortgages in financial planning is about to arrive!
John L Krajsa Jr, Esq., President, NMLS# 139056 is an attorney with a background in mortgage lending and estate planning. Mr. Krajsa has over 25 years of mortgage lending experience and has been working with FHA loans since 1996 and with FHA HECM reverse mortgage loans since 2002. Mr. Krajsa does not offer legal advice but will work with you and your advisors to help determine if a reverse mortgage is right for you. Find out more about AFC Reverse Mortgage and connect with John on Facebook.
