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Generational wealth, enough for the children and the grandchildren, is a nice goal. I certainly have wanted my expenses covered by a long lost deceased relative who liked to save. Unfortunately, planning our finances around such a boon would be foolish. Just as foolish is to tie down your earnings so tight because you want to provide for another generation when your life is not finished.
The reverse mortgage (HECM) has come a long way since it initial launch in 1961. A HECM is a normal mortgage lien against the property, similar to an equity line, where you can access part of the home equity with no monthly principle and interest payment. The intent of the reverse is to improve the senior’s life through increased cash flow and allow the senior to age in place without being a burden on their family. Properly structured, the borrower can also protect the remaining equity so they can leave it to their children if that is what all involved want to do.
Balancing your life versus paying off debt is tricky, especially on something as expensive as a house. As a mortgage broker, I do my best to listen to all factors so clients can balance their debt-free desires with having a life well-lived. If you would like to learn more about this program, please reach out to me for a personalized discussion.