Re Deploy Your Assets To Live The Third Chapter To The Fullest

Notes Section

In this segment I show you how you can use a Reverse Mortgage to assist during the third chapter of your life.

Use the Reverse Mortgage to start a new business or help you during a career change.

I challenge the misconceptions that many baby boomers, seniors, & individuals are close to retirement have about how a Reverse Mortgage can help them.

 

Transcript

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[Music]
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hi welcome to this episode of boomer
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income ideas calm we’re gonna switch
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gears a little bit today and instead of
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interviewing someone we’re going to talk
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about an idea that I think is pretty
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critical it’s called redeploying of
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assets but before we get into that let’s
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talk a little bit about preconceived
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ideas and how they can stop us from
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moving forward and achieving our goal
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let me demonstrate compris ways that
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preconceived ideas can be I’m going to
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give you a little quiz if I asked you
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what color a stop sign is what would you
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say about this if you said red you’d be
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right now what color’s the yield sign
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I’ll bet you say yellow and in fact four
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years ago the government decided and
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dictated that all yield signs must be
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red and white just like a stop sign
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we’ve driven by them every day for the
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last 40 years and we never noticed we
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think they look like this why probably
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because that’s what we exposed to when
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we were very young now let’s look at
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another program that you might also have
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a preconceived idea about which is
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probably just as incorrect the program
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that i’m referring to is the reverse
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mortgage program and it’s most likely
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the most misunderstood government
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program available today me back to my
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quiz if i asked you what you knew about
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reverse mortgages here are the top 4
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answers that i usually get first the
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bank takes my house when I die number
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two you can stay in the house but you no
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longer own it number three loan leads
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all equity and before krina by liberals
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and government and the government loses
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my wrong wrong wrong and wrong now let’s
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take a look at number one bank takes
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your house this is an FHA back lung just
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like the FHA loan you may have used when
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you first purchased your own the
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government ensures the loan it does not
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lend you money the loan is simple a
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mortgage against your house you remain
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on title and when you know on to live in
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the house the longest paid back let’s
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look at number two then home but you no
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longer own it it’s actually the same
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answer is number one you remain on type
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it’s your home how about number three
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the long needs all
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the equity because the loan doesn’t
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require a payment so it must eat up all
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here quick see quite the opposite is
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true let’s look at this chart and see a
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typical transaction as you can see this
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is a home that has a starting value of
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about four hundred thousand dollars the
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borrower is going to take out two
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hundred thousand dollars in alone and
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he’s going to have two hundred thousand
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dollars remaining in equity in the house
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now the laws are designed so that the
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increasing value of the home basically
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offsets the increasing loan amount so in
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this case over ten years with a
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historical appreciation value of the
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home at four percent in an interest rate
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on a loan in six percent the home is
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going to grow from four thousand to
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about six hundred thousand ten years the
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loan is going to grow from 200,000 to
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about four hundred thousand in 10 years
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and your existing two hundred thousand
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dollars in equity is remaining plus two
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hundred thousand dollars in cash that
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you’ve taken out is also regaining now
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let’s talk about the best feature of
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this particular law if you decide that
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you don’t want the loan to go negative
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because you are able to make payments
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fine go ahead and make the valence and
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instead of negatively advertising the
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loan is going to be amortized just like
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a regular loan creating all of this
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inequity this is the ultimate ticket a
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long you can choose to pay nothing you
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can choose to pay interest only or you
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can choose to pay a fully amortized
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amount it’s entirely up to you which is
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very different than a home equity line
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of credit we’ll get to question number
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four and then but before we do you might
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be asking yourself why am I telling you
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all this well because in our weekly
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segments we talk a lot about
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opportunities to enhance our life and
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most of these require some kind of
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investment in order to get to that point
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the dead equity in your home may be one
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of those assets now don’t get me wrong
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I’m not advising that you do nothing
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more than consume the cash instead let’s
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look at three scenarios or it makes
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great sense number one
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change of career the rule of thumb is
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about two years whether you’re building
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a new business you’re going back to
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school to retrain or you’re somehow
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changing your lifestyle you’re going to
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have a disruption of income for about
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two years a reverse mortgage can be a
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perfect opportunity to supplement that
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income number to use the money to invest
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in a business opportunity the most
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important element about this particular
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loan is that there is no payment
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required and one of the things that you
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certainly don’t want to do in opening up
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new business is start off with no cash
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flow coming in and have a debt service
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going out and lastly let’s talk about
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one that’s most interesting to me
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purchasing of income property now let’s
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take a look at one of my particular
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properties in this scenario if I take a
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hundred and seventy thousand out of my
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existing home in a reverse mortgage and
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I purchased another property with that
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now I have two properties so i have to
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equity producing properties this happens
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to actually be one of my properties so
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let’s talk about the scenario in this
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case i purchased the property for 170
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thousand dollars i have a rental income
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of seventeen hundred dollars a month and
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i have expenses HOA property taxes
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insurance maintenance etc of about six
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hundred and eighty dollars a month which
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means that i have a cash flow positive
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cash flow of a thousand twenty dollars a
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month now the great thing about this is
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that i have no debt service on my
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existing property yet even though i have
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no debt service i have monthly expenses
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I’ve got taxes insurance maintenance and
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so forth on my existing property which
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happens to be about a thousand dollars a
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month so in this scenario by taking
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equity buying another property turning
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it into cash flow positive cash flow I
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just allowed myself to live totally free
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in my existing property
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[Music]
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I’ve seen blue and I think to myself
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right on how fantastic is that that’s
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what in this case redeploying my assets
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means to me now for question number four
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I’ll bet it will surprise you to learn
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that it was ronald reagan in nineteen
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eighty eight that signed into law the
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ability for FHA to put the reverse
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mortgage program under its umbrella it
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was done mainly because it was
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understood that baby boomers have about
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three quarters of their net worth tied
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up in the dead equity in their homes and
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unless the government came up with some
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kind of opportunity for people to
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release and liberate solve that equity
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social programs would probably expand
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and they didn’t want that to happen
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that’s why I believe that utilizing a
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reverse mortgage can be in many cases a
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great way to redeploy your assets and
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turn it into cash flow rather than just
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sitting there hope you enjoy the second
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[Music]
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you
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