By: Joshua Danker-Dake | Category: Financial Services | Issue: March 2010
Bill Simms is a certified senior advisor specializing in reverse mortgages.
In our current economy, money is tight for a lot of people. If you own your own home and are 62 years old or older, a reverse mortgage might be a great way to improve your cash flow and establish greater financial independence and stability.
MetLife Bank’s Bill Simms, a certified senior advisor with almost two decades of experience in financial fields, is a reverse mortgage specialist. He has experience with insurance and protection programs, and now works exclusively in reverse mortgages. “Right now is a great time to look into a reverse mortgage, because housing values in Tulsa are still fairly high, and we’re in a low interest rate period,” he says.
The reverse mortgage is a program from the United States Department of Housing and Urban Development (HUD). Anyone who is 62 years old or older, is a homeowner, and has equity in his or her home is eligible for a reverse mortgage. The program is FHA insured, which creates a safety factor for seniors, says Simms. When you take out a reverse mortgage, you borrow a portion of the equity you have in your home, and this loan is due when the house is sold or when the homeowner dies.
Many seniors are concerned that they will outlive their money, Simms says, and a reverse mortgage has the potential to solve a number of their cash flow problems. Recipients can take the money in a lump sum, in monthly installments, as a line of credit, or any combination of the three. There are no restrictions on how you spend the money. And the money received is nontaxable, because it comes from the principle of the home. Many people choose to use this money to pay off their home loans, eliminating monthly payments to the lender altogether, says Simms.
Interest in reverse mortgages is growing. “Through media advertising and word of mouth, more people than ever are becoming aware of this program,” Simms says. “Understanding of the process is growing, and so is its popularity. I have attorneys and CPAs who send me clients, and last year I did more reverse mortgages than ever. I also received more inquiries than ever. The educational process is working, and people are moving beyond the misunderstandings of how the program works.”
If you have parents who are over 62 and have their own home, a reverse mortgage might be something for you to look into as well. “In a bad economy, a reverse mortgage can help mom and dad use the proceeds to pay off the loan they have on their house now or to provide cash, either as a lump sum or a monthly income stream,” Simms says. “It’s a good way people can give their parents a more comfortable retirement and greater financial independence, and to keep them in their home.” A reverse mortgage can also be an attractive option for people who don’t want to take Social Security too early, or whose 401(k)s have diminished in value, he says.
If you think a reverse mortgage might be right for you or for your parents, or for more information, contact Bill Simms.