3 Unlocking Home Equity | Aging in Place With a Reverse Mortgage

Kevin Guttman from C2 Financial joins Suzanne Newman on the Answers for Elders podcast to discuss the ins and outs of reverse mortgage. In this segment, Kevin explains how the value of your home's equity can help you age in place in your later years through a reverse mortgage. C2 Financial is the third largest mortgage broker in the country and the number one reverse mortgage broker in the country with 1,200 loan officers.Kevin says, "Most people have the bulk of their net worth, probably two thirds or more of their net worth, in their home. There are three ways we can get to our equity. We can sell – pay the broker 6 percent – do a cash out refinance or home equity line of credit with a monthly mortgage payment. Or we can do a reverse mortgage, in which we have an optional payment, but have access to the equity."So the way it works is, let's say somebody has a $500,000 home, which is not too uncommon these days. And we'll just say they're 62. A spouse can be younger, but at least one needs to be 62. So let's say they can borrow about 35%. So let me do the math real quick. $500,000 times 35%, $175,000. They don't need the money, they're still working, but they know the time value of money. When we were in our twenties, the financial planners told us start investing in your twenties, you need to have time on your side so your money can grow. So if they get it at 62, and they're planning to work till 70, but now they have this line of credit, $175,000, and they don't need the money. So they let it ride, so to speak, for ten years. And that line of credit can double in ten years, potentially. So now they don't have $175, now they have $350, and they can turn that into monthly payments or a lump sum. They still don't need the money, because they have investments. They're doing fine and started taking Social Security. Now they let it ride another ten years. Now they're 82, so they've had the reverse mortgage for 20 years. And now that line of credit has grown to $700,000. Tax free, monthly payments, or lump sum. Turns out one of them get sick, which is not too uncommon. They need some help. So they bring somebody in a couple hours a day. We'll just say three or 4 hours a day, Monday through Friday. Instead of having a family member leave their job, come and care for the parents, they have money, they can pay somebody to come and care for them. So they can age in place."Kevin adds, "A reverse mortgage is like a fingerprint. It's unique to each individual, each couple. We can tailor it to help them accomplish what they're looking to do."💠 Connect with Kevin Guttman and C2 Financial at 877.251.9729.💠 Visit C2 Financial's website for research, essays, videos, interviews💠 Ebook: Betty’s Story: A Prudent Senior Citizen’s Guide to A Reverse Mortgage Loan✨ Visit Answers for Elders onlineMentioned in this episode:Chateau RetirementChateau RetirementWalk to End Alzheimer'sLearn more about the Walk to End Alzheimer's at https://www.alz.org/walk.