Columnists

Living The Retirement You Always Dreamed About

Issue 39.16

Several of my clients and realtor friends have come to me at one time or another and asked a common question: “If I can pay cash for a home, why would I ever want to use a Home Equity Conversion Mortgage (HECM) to purchase my home?”  This is a VERY important question that all seniors purchasing a home should ask themselves.  The right answer to this question depends both upon your strategic goals as much as your financial goals. For example, one of my clients, a couple from Utah County, had cash to purchase a $300,000 home here in St. George.  When we sat down together to understand their lifetime strategies, they told me that they wanted to travel during the summer months and winter in St. George, as many couples do.  They were surprised to find out that they could purchase their new home with about half down and still not have a mortgage payment.  This saved enough cash for them to purchase a beautiful motor home that they now use to drive around the country during summer months.  Knowing that they may not want to drive open roads forever, they plan on selling the motor home in a few years and traveling by air.  HECM financing gives them more freedom. Another couple I worked with had a similar situation. They could pay cash for their new home in St. George, but they also wanted to purchase a family cabin in Duck Creek.  They initial thought they would pay cash for their St. George home and then put a mortgage on the cabin.  As we discussed their options, their strategy changed.  They decided that it would be better to finance their primary residence in St. George with a reverse mortgage and use the cash they saved to pay for the Duck Creek cabin.  This strategy had two advantages:  first, they bought both properties without ANY mortgage payments, and second, they planned to leave the cabin with no mortgage as an inheritance to their two sons for their continued enjoyment.  Even better, they rent the cabin out when the family isn’t using it.  That way it generates incremental retirement income for the parents.  Instead of having to pay a mortgage, they now get an income.  They had no idea this could happen.  They are thrilled! Some people believe that HECM loans are only for people who need help with their retirement needs. Nothing could be further from the truth.  HECM loans can be a strategic tool to unlock great opportunities for you to better enjoy your retirement.   If you still have dreams about how fun your retirement can be, call me today at 435-669-0009.  I’ll show you how to make your dreams a reality.  Veritas Funding (NMLS#252108) is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer/property qualification. Loans programs are subject to change without notice.

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