Reverse Mortgages, Stocks and Retirement Planning

Stocks and bonds are usually reliable methods of retirement planning. However over the last decade reverse mortgages are quickly becoming the popular mode of retirement planning. Retirement planning can take place in the investment market either by insurance policies, long term low risk stocks and real estate. Due to the sub prime mortgage crisis between late 2007 and 2008 real estate has wobbled as a strong retirement planning method. But in essence it is still the lowest risk, but can still yield the best results for the long term. But who are reverse mortgages best suited for? We believe these are for individuals who are senior citizens that though own property made no plans for a steady cash flow after passing the age of 62.

That being said these individuals must now embark on the process of accessing a reverse mortgage. A reverse mortgage is actually a draw down facility given to senior citizens either over a period of time or a lump sum that represents the equity in property that they own. So in this case the lender will take a mortgage or lien on the property for close to the value of the property, then make monthly payments to the owners over a specific period of time then when that homeowner passes on, the property is sold to recover the debt. This provides a steady cash flow for the home owner until death. Thus is how a typical CA reverse mortgage loan works.

Now most smart home owners utilize a reverse mortgage to pay for living expenses while more savvy homeowners place all on stocks and futures. The main reason is this. As time goes by some properties might increase in value but cannot generate the returns that some stocks and bonds can generate. One such example is that of Google Inc. If someone had bought into the Google Inc IPO with reverse mortgage earnings they would have provided their family with two major benefits. A stock that appreciates rapidly and a more liquid form of earnings for their beneficiaries. This can alleviate death taxes and avoid transfer costs when transferring real estate. All at $0.00 cost to the homeowner and their children and family.

This is a very popular option and has been used in several California reverse mortgages that are currently on the books. The proximity to the Silicon Valley has none too helped with this phenomenon and one good place to start to review these is with a reverse mortgage consultant. One can be found online at Ameritek Mortgages which provide consultation through a Toll free number 1-800-344-1733.