While proprietary reverse mortgages have re-emerged since the 2008 Housing Market Crash, these loans are still rarely offered. Despite advancements in security and financial planning, lenders and financial planners remain concerned about scams targeting the loan’s qualified members: retirees. As a result, many retirees are left uninformed about proprietary reverse mortgages, let alone the many financial benefits they offer for retirement planning. Together, let’s look at proprietary reverse mortgages, how they work, and the benefits they can offer to your retirement savings.
Proprietary reverse mortgages are private loans offered and insured by private lenders that allow homeowners to convert part of their home equity into money. As these private loans aren’t government-insured, they’re not bound by Federal Housing Administration (FHA) lending limits and therefore allow members access to more funds without paying upfront fees.
Since proprietary reverse mortgages are only qualified for members 55 or older with enough home equity from their main residence, retirees hold the most risk of having their savings targeted by mortgage scams. Yet, retirees have much more to gain by taking on a proprietary reverse mortgage than not, especially when it comes to saving for retirement. Here are some benefits retirees can look forward to by taking on a proprietary reverse mortgage:
Overall, proprietary reverse mortgages have more advantages for retiree finances with their payment options, spending freedom, and lack of limitations on equity funds. Using a proprietary reverse mortgage, aging homeowners not only have unlimited access to more income but are free to live out their lives at home without concern of title or property takeover.
At PCL Financial Group, our experienced team offers proprietary and various other reverse mortgage options to best suit your retirement goals. To learn more about our reverse mortgage options, contact us today to receive a professional financial consultation.