Financial Planners

Guarding Against Sequence of Return Risk

Strategic use of home equity can extend portfolio longevity for borrowers.

FHA minimum age is 62 |Proprietary, Jumbo Reverse Mortgage minimum Age 55 Oregon & Age 60 Washington.  

Solving for longevity in retirement can be exceptionally challenging. Some clients age 55 and older may be feeling the impact of inflation, higher rates, and volatile portfolios. While you do your best to protect and actively manage your clients’ assets, the strategic use of Home Equity and it’s ability to positively affect cash flow is often overlooked in the planning process. Don’t leave your client’s largest asset untouched – it could be the key to increased financial confidence. ​

What line of credit amount does your client have available to them? Email or call us with this information and we can give you a responsible estimate.

Date of Birth of Youngest Borrower ~ Home Value Estimate ~ City & State they live in ~ Amount of Any Mortgage, Helocs or Taxes Owed

Quick, confidential and useful information.

We are local, we meet with you and your clients, whether that is on-line, in their home or your office. We are dependable, conscientious and provide detailed analysis and recommendations.

As a Reverse Mortgage subject expert in the area, Kim is currently an approved CE provider for the State of Oregon Insurance Commissioner and the Certified Financial Planner Board (CFP). Get important Reverse Mortgage Information plus CE credit at the same time. Just ask!

What would an additional $100K, $200K, $300K+ mean to a few of your clients as they prepare for Retirement?

Could they cut back on their work hours from full to part-time?  Would they have the funds and time to invest in their own health? Check out below some of the financial planning uses for a Reverse Mortgage… beyond the incredibly simple (but incredibly effective) elimination of a monthly mortgage payment.

Is the loan even a fit and what loan amount is my client eligible for?
  • Call us with questions or to talk through a specific client situation.
  • Provide us with this information and we can give you a responsible estimate.
    • Date of Birth of Youngest Borrower
    • Zip Code
    • Amount of Any Mortgage, HELOC and/or Taxes Owed
    • Home Value Estimate*  The client’s opinion or one from REDFIN Home Estimator  |  Zillow Home Estimator
    • We also use non-public estimators; we hone in on a responsible value for planning purposes.
  • Meet with us for information and potential CE credit
  • We provide the latest information.
  • Every night celebrities come into your client’s homes through advertising, extolling the magical benefits of a reverse mortgage. Your client may call you or they may call the advertised call center.
  • We can keep you updated on the latest market information and reverse mortgage basics.
  • We prepare for you and your clients the detailed analysis of fit & pre-qualification, from the loan perspective.

Do some borrowers call their reverse mortgage loan magical? You bet, but it has to be right, for the right circumstances ~ and we are all over that.  AND…we will propose alternatives and dig deeper, to make sure clients have the RIGHT LOAN for their situation, reverse or conventional lending.

As a mortgage broker we are not captive to any one lender.
  • We are aligned with all the major reverse mortgage lending companies.
  • We choose the right lender for the client’s needs.
  • We have no monthly quotas to meet.
  • If another mortgage loan program is better suited to your client’s needs, you will see it illustrated in our recommendations.
  • Kim, Cheryl and Josh are licensed at the highest NMLS licensing level. Not all ‘loan representatives’ are.

Easing portfolio volatility with the Reverse Mortgage Line of Credit feature.
  • Line of Credit (LOC) gets set up for mitigating sequence of return risk in a down market.
  • Client takes draws from the LOC for household expenses during market downturns instead of taking funds out of assets (e.g. IRA) under management.
  • Draws from the LOC are income-tax free as they are loan proceeds, not income.
  • May help clients defer or eliminate capital gains taxes from selling appreciated assets – seek tax advice.
  • Gives retirement assets like 401(k) or IRA time to recover or grow.
  • Strategic use of reverse mortgage may increase client’s legacy wealth.

Investment in Home Improvements is key to ensuring safety as physical needs change.
  • Reverse Line of credit funds can be used for home repairs and the extra expenses as we age
  • Money towards in-home assistance for the family when caring for parent or spouse helps the PRIMARY CAREGIVER to be able to assist longer term, with less negative impact to their own health.
  • A family home can be the gathering place, the memory vessel, the sweetness of being surrounded by our stuff. (We all love at least some stuff).
  • “Transition Trauma” for older folks is a real thing.
  • Timing and information are critical for healthy aging.

“Data shows that 77 percent of adults 50 and older want to remain in their homes for the long term — a number that has been consistent for more than a decade.” Updated November 21, 2022  AARP

Creating financial flexibility.
  • A Reverse Mortgage stand by line of credit can be set up in advance, ready to access when needed.
  • Line of credit grows over time allowing access to more equity as the client ages.
  • The Reverse LOC cannot be reduced or revoked by the lender (HELOCs can be cancelled, capped & require a minimum monthly payment).
  • Reverse mortgage loan proceeds are not taxable.
  • Funds can be used for in-home care, as a supplement to or in place of a Long Term Care Insurance policy.

At times, a health event may require the reverse mortgage borrower to leave their home and move outside the home to a higher level of care. A borrower can immediately draw out their line of credit funds and deposit them into their checking account. Now there is available cash to cover short term expenses so they can get care as needed, without liquidating other assets with an emergency, fire-sale approach.

Is it time to move?
  • Move closer to family and grandkids or nearer to friends and their support system?
  • Are there too many stairs, too much home upkeep or deferred maintenance?
  • Are needed and desired services too far away now?
  • Would retirement funds last longer if the area had lower cost of living or lower property taxes?
Maybe it’s time for a home upgrade, or the dream home with room for house-mates or in-home care help.
  • Eligible Reverse Mortgage Purchase Loan amount is combined with buyers down payment & closing cost to purchase.
  • Buyer’s down payment usually comes from the sale of their current residence.
  • Once purchased | loan closed, Borrowers are not required to pay a monthly principal & interest payment during their lifetime in the home.
  • Borrowers are responsible for property taxes, homeowners insurance, HOA if applicable and to maintain the home.
  • Must occupy the home as primary residence and meet loan terms. Ask us for an example Reverse Loan Agreement.
  • A new home more suited to needs AND maybe even additional savings from the sale of the old home ~It’s a win!
  • Check out these fascinating  Reverse for Purchase details on our FOR REALTORS page.

ROTH Conversion Funding Source for Tax Liability

You probably don’t need any further talking points on this one… A Reverse Mortgage with a line of credit set up in advance, or for this explicit purpose, can be used as a funding source to pay tax liability on a Roth Conversion.

If you would like to know the estimated Line of Credit that may be available to YOUR CLIENT, shoot us an email or call us with this information:

  • Date of Birth of Youngest Borrower
  • Zip Code
  • Amount of Any Mortgage, HELOC and/or Taxes Owed
  • Home Value Estimate*  The client’s opinion or one from REDFIN Home Estimator  |  Zillow Home Estimator
  • We also use non-public estimators; we hone in on a responsible value for planning purposes.

We will email you back the basic information and possible next steps, so you know. No fuss, no muss, and pretty speedy too!

No longer the loan of last resort, there is a cost to waiting…
  • Clients with significant equity can benefit from the Credit Line Growth Feature that is independent of home value. Access to more equity grows over time.
  • A funding source to bridge income between retirement and the date you take Social Security, and option to maximize these benefits.
  • A longevity strategy, using reverse funds for income during market downturns, protecting clients from sequence of return risk.
  • A stand-by line of credit for unexpected expenses ~ in place before they need it.
  • Are the adult children funding their aging parent’s needs to their own financial detriment?
  • A reverse mortgage may help parents stay self-sufficient.

We Know this isn’t you as a Financial Professional, but maybe it is you, the retiree.
All work, no play and a lack of shared agreement over money can make Kelly & Kit consider a divorce (even after all these years together!)
  • Ok, all sarcastic headlines aside and no offense meant to anyone. Even assuming responsible budgeting for needs and emergencies, a lot of us still under-value our DAY-TO-DAY QUALITY of life.
  • For your adult life up until now the focus has been on saving the dollar, eliminating or shaving expenses here and there, and the celebration of some tax savings (we all love this!)
  • Creating a spending plan can be just as challenging as the saving.
  • Priorities shift dramatically when we are in this phase of life.
  • How do you value the cost over the memories you and your family create from a celebratory dinner (or just a regular Taco Tuesdays tradition!)
  • We see the price tag of $$ spent on a vacation, but how do you calculate the value of being able to build more memories with the grandchildren because you can visit more often or do a special activity?
  • “Bucket List” travel destinations? When are your going to check off a few of these?
  • What is the physical cost of NOT having in-home care & home creature comforts when your world may just be… your home.
Where and When Do we Under Value our Quality of Life?
  • As a Financial Advisor, you have counseled the widow who’s spouse has died months after finally retiring.
  • The couple living the ‘just in case’ life, afraid to go after their dreams because something bad may happen someday. So they don’t…just in case.
  • The long term marriages that fall apart because of cash-flow issues among others, and the realization that time is rushing by.

A reverse mortgage is not a fix all and may not be appropriate for some clients. But we have witnessed some incredibly positive outcomes for our client’s “QTR” with the strategic use of home equity, even if they own a $2M home and have assets.

And what is “QTR” by the way?  When I hosted my radio show, a guest who had built a new business in their retirement shared it with me. The phrase has stayed with me for 10+ years now.

QTR is something we all have, but we don’t know how much of it we have.

Let’s say it is quite valuable and we should protect it, and use it to the best of our ability.

QTR = Quality Time Remaining

Thanks for visiting our website and learning about what we have to offer.
~ Kim Dodge & Cheryl Teigen