By: Joshua Danker-Dake | Category: Financial Services | Issue: January 2009
Bill Simms, a reverse mortgage specialist for MetLife Bank, says that reverse mortgages can potentially solve a number of financial problems for seniors.
If you are a homeowner 62 years of age or older, a reverse mortgage could be a great way for you to improve your cash flow and achieve greater financial stability as well as a more comfortable retirement. Bill Simms is a reverse mortgage specialist for MetLife Bank, a division of Metropolitan Life. “One of the goals people have is to be able to maintain a comfortable lifestyle,” he says. “And one of the biggest fears seniors have is that they will outlive their money. A reverse mortgage can be a tremendous help for them.”
A reverse mortgage is available to anyone 62 years or older who is a homeowner and has equity in his or her home. “This is a HUD program,” says Simms, “and it’s FHA insured. This creates a safety factor for seniors.”
A reverse mortgage can potentially solve a number of cash flow problems. “For seniors who need money or income, a reverse mortgage can be a good solution,” says Simms. “You can take the money as a lump sum or in monthly installments, establish a line of credit, or any combination of the three. The money received is nontaxable – it comes from the principle of your home. When you get a reverse mortgage, there are no restrictions on how you use the money. And some tremendously good news is that recently, HUD is allowing the use of reverse mortgage funds to buy a home.”
When homeowners take out reverse mortgages, they borrow a portion of the equity from their homes. “One tremendous advantage of this is that you don’t have to make any payments to the lender,” says Simms. The loan is due upon the sale of the house or the death of the homeowner. Any money can be used to pay the loan; you don’t have to sell the house. “Typically, though, the children or heirs will sell the home and use some of that money to pay back the loan. And this usually works well because they’re looking to get the maximum market value for the home. There’s a misconception that when you take out a reverse mortgage, you lose the title of your house, but that’s not true at all. The house always stays in the homeowner’s name.”
Simms is a certified senior advisor and has almost two decades of experience in this and related fields. “I’ve been helping seniors with their financial needs for 18 years,” says Simms. “I have experience with insurance and protection programs, and I’ve worked to resolve the needs of seniors. In the last few years, I’ve specialized in reverse mortgages, and I do that exclusively now.” Simms has been in the Tulsa area for 11 years.
“A lot of children would prefer to keep their parents in their home for as long as possible,” says Simms. “I’ve found that most are in favor of a reverse mortgage in cases of financial need. It’s a way to give the parents a more comfortable retirement, and it can relieve the pressure of supporting them. A reverse mortgage is a great way to keep mom and dad living in the home, and they don’t have to make monthly payments.”
Even if you have a loan on your house, you may still qualify for reverse mortgage. And you can use the money from a reverse mortgage to pay off a loan or lien. “This is a good way to improve your cash flow by eliminating those monthly payments,” says Simms. “A reverse mortgage can be a useful tool for people who don’t want to take Social Security too early. It can also be an attractive option and a big help for people with dwindling 401(k)s.”
If you think a reverse mortgage might be right for you or your parents, or if you want more information about reverse mortgages, call Bill Simms at (918) 852-5784.