William Penn Life, 2017 (52. évfolyam, 1-12. szám)

2017-03-01 / 3. szám

Moneywise with Bob Bisceglia, National Sales Director

AS NATIONAL SALES DIRECTOR for William Penn Association, I'm often asked my opinion about reverse mortgages and if they might be a viable option for our members who are considering retirement or are retired and interested «in learning more about their options when it comes to home equity and retirement funding. °

At a recent meeting of the Fraternal Societies of Greater Pittsburgh, I had the good fortune to meet with Sallie Dunn, an experienced and well-respected expert in the area of reverse mortgages. After several meetings with Sallie, I asked if she would be so kind as to share some thoughts with our members, and she was more than happy to oblige.

Here is what Sallie had to share with us.

Illustration © Can Stock Photo Inc./ Aleuhe

Reverse mortga and your retire

When people are asked to list their assets

for the purpose of determining net worth, many people do not include their housing wealth - equity - as part of their asset listings. However, for many people, the biggest asset they have is the equity in their homes, and this should be a consideration when preparing a retirement strategy.

Reverse mortgages have evolved into a financial tool that should also be considered in retirement plans. It is no longer the loan of last resort or your grandmother's reverse mortgage. Changes implemented by the Federal Housing Administration beginning in 2012 are making many seniors take a second look at home equity conversion mortgages (HECM), another name for reverse mortgages.

Incorporating housing wealth early in retirement may help to preserve a portfolio by reducing monthly expenses and creating another source of cash flow.

It needs to be used responsibly as part of an overall retirement income strategy. The proceeds from a reverse mortgage should not be considered a windfall to be spent quickly.

So what exactly is a reverse mortgage? A reverse mortgage is a non-recourse mortgage that converts a portion of one's home equity into tax-free cash. It is available to homeowners age 62 or older. The borrower can choose a line of credit that grows larger over time, receive monthly payments or receive a lump sum. The borrower maintains ownership and can sell the home at any time. In addition, the homeowner continues to pay the real estate taxes and insurance ©n the property (and any homeowner's dues if applicable).

Some of the other benefits a reverse mortgage could provide are:

Have questions about life insurance or annuities? Call your local WPA sales representative. If you do not have a WPA agent, please call the Home Office at I -800-848-7366, ext. 120, and we can assist you in finding an agent who will serve you and your family by offering:

• A Review of Your Needs • Life Insurance Protection • Tax-Deferred Annuities •

• Juvenile Insurance Plans * Special Fraternal Benefits •

4 ° March,-2017 ° WILLIAM PENN LIFE