WEBVTT 1 00:00:01.760 --> 00:00:05.440 Welcome to Mortgage Talk with Mark Harriston, the program that 2 00:00:05.519 --> 00:00:09.000 not only talks about mortgages, taxes, and interest rates, but 3 00:00:09.080 --> 00:00:12.199 Mark and his guest talk real estate trends and your home. 4 00:00:12.439 --> 00:00:15.039 He also answers your mortgage questions to help you make 5 00:00:15.080 --> 00:00:19.800 the right financing or refinancing decisions. Now here's Mark Hairston. 6 00:00:20.000 --> 00:00:23.800 Happy to everybody, and welcome back to Mortgage Talk with Mark. 7 00:00:23.920 --> 00:00:26.760 I'm really excited you guys are back on to the 8 00:00:26.879 --> 00:00:28.280 show with me because I have been out of the 9 00:00:28.280 --> 00:00:30.600 studio for probably about a month or the holidays, and 10 00:00:30.640 --> 00:00:32.920 this is actually the first show of twenty twenty five, 11 00:00:33.000 --> 00:00:35.399 and I'm very very excited to introduce a friend of mine. 12 00:00:35.439 --> 00:00:38.479 As I usually say when I start, the goal here 13 00:00:38.679 --> 00:00:42.039 is to bring in subject matter experts on different subjects 14 00:00:42.079 --> 00:00:44.320 around real estate finance in general. 15 00:00:44.520 --> 00:00:47.119 And today we have a true what I call experts. 16 00:00:47.119 --> 00:00:49.000 She's so much of an expert that I've hired her 17 00:00:49.039 --> 00:00:50.399 for my own personal business. 18 00:00:50.439 --> 00:00:53.159 So this is a conversation. 19 00:00:52.600 --> 00:00:55.159 If you're over sixty two you certainly want to listen to, 20 00:00:55.560 --> 00:00:57.640 or if you have parents that maybe over sixty two, 21 00:00:57.640 --> 00:01:00.600 you want to listen to about how to leverage equity 22 00:01:00.640 --> 00:01:03.880 in a property and supplement your retirement income. And I'm 23 00:01:03.920 --> 00:01:07.760 really happy to introduce my friend, Christina harms Hike. She's 24 00:01:08.000 --> 00:01:11.719 hails from California. You're not affected by the fires, are you, Christina? 25 00:01:11.879 --> 00:01:13.239 Luckily? No, not right now? 26 00:01:13.560 --> 00:01:16.239 Okay, good, good, good. Well that's really a tragedy out there. 27 00:01:16.280 --> 00:01:18.640 What's going on. But I've known you about four or 28 00:01:18.680 --> 00:01:21.599 five years now, and I follow you on social media 29 00:01:21.959 --> 00:01:24.799 and we've talked about my own personal situation here in Austin, 30 00:01:24.920 --> 00:01:26.680 my wife and I have, so we want you to 31 00:01:26.680 --> 00:01:28.599 introduce yourself and then we're gonna start getting the meat 32 00:01:28.599 --> 00:01:29.599 of the subject here. 33 00:01:29.799 --> 00:01:31.480 Yeah, thank you so much for having me on. It's 34 00:01:31.480 --> 00:01:35.480 an honor. Good So introduce myself. I'm Christina harms Hika. 35 00:01:35.599 --> 00:01:38.359 I am a certified reverse mortgage professional. I've been that 36 00:01:38.519 --> 00:01:41.280 for almost a decade now. I was the youngest to 37 00:01:41.359 --> 00:01:45.239 achieve that designation, and it's a little known unless you 38 00:01:45.439 --> 00:01:47.840 talk to somebody who is one. There's only about two 39 00:01:47.879 --> 00:01:50.760 hundred of us in the country. But that really is 40 00:01:50.840 --> 00:01:55.400 the highest level of understanding of reverse mortgages. And we 41 00:01:55.519 --> 00:01:58.079 hold a oath to ethics, so I think that's really 42 00:01:58.120 --> 00:02:00.879 really important. It's a lovely designation and to get yes. 43 00:02:01.959 --> 00:02:03.959 But but prior to that I started, People are like, 44 00:02:03.959 --> 00:02:05.640 how have you been in this industry so long? I 45 00:02:05.640 --> 00:02:08.080 started my dad's office when I was sixteen, I was 46 00:02:08.120 --> 00:02:10.400 a mortgage broker, and so I learned the ways of 47 00:02:10.439 --> 00:02:12.639 mortgage and then I actually sold real estate for some time, 48 00:02:13.120 --> 00:02:16.919 and then when I closed my first reverse mortgage, my 49 00:02:16.960 --> 00:02:18.199 life was just absolutely changed. 50 00:02:18.280 --> 00:02:19.120 She fell in love with it. 51 00:02:19.560 --> 00:02:22.479 I fell in love with it. It was so weird 52 00:02:22.719 --> 00:02:28.000 and so customizable and so flexible for we fixed exactly 53 00:02:28.080 --> 00:02:32.520 what they needed and more, and it would just change 54 00:02:32.560 --> 00:02:33.120 my life forever. 55 00:02:33.280 --> 00:02:36.879 Well, it's rare that I find somebody as passionate about 56 00:02:36.919 --> 00:02:39.159 their business as you, and I just love that. That's 57 00:02:39.159 --> 00:02:40.879 why I wanted to have you on there and speak 58 00:02:40.879 --> 00:02:42.639 to the subject that has a lot of myth around 59 00:02:42.680 --> 00:02:47.319 it misunderstanding too. And so let's start with kind of 60 00:02:47.319 --> 00:02:51.879 a high level conversation around what exactly is a reverse 61 00:02:51.960 --> 00:02:54.520 mortgage and how is it different than traditional loans? 62 00:02:54.639 --> 00:02:55.319 Which did I do? 63 00:02:56.319 --> 00:03:01.520 Absolutely? A reverse mortgage is a really cool, relatively newer mortgage. 64 00:03:01.639 --> 00:03:03.479 So it was created in nineteen eighty nine, which is 65 00:03:03.520 --> 00:03:05.560 pretty young for a mortgage. Right before that, we had 66 00:03:05.639 --> 00:03:08.639 VA in the forties, and so it's taken some time 67 00:03:08.639 --> 00:03:10.599 to work out some of the kinks, and so people 68 00:03:10.680 --> 00:03:13.560 have some idea or they may not understand it at all. 69 00:03:13.919 --> 00:03:16.919 But over time, the reverse mortgage has changed a lot 70 00:03:17.039 --> 00:03:20.759 to where we are today, where it's an amazing, amazing loan. 71 00:03:21.879 --> 00:03:24.919 It's for home owners either fifty five or sixty two 72 00:03:24.919 --> 00:03:27.599 and up, depending on the program and state. The most 73 00:03:27.639 --> 00:03:30.439 common one you hear about is the FAHA Heckham Home 74 00:03:30.479 --> 00:03:33.719 Equity Conversion mortgage, and that is sixty two and up 75 00:03:33.759 --> 00:03:37.080 in every state, but there are other reverse mortgages for 76 00:03:37.199 --> 00:03:40.719 some people in some states for fifty five and up. Essentially, 77 00:03:40.800 --> 00:03:43.919 the main key points you need to live in the 78 00:03:43.919 --> 00:03:47.000 home as your primary residence. At least one borrower must 79 00:03:47.080 --> 00:03:51.000 remain or non borrowing spouse. You can pay your taxes 80 00:03:51.000 --> 00:03:54.080 and insurance. It's owning a home. That's a big thing. 81 00:03:54.120 --> 00:03:56.520 People have a misconception that, oh, I'm going to make 82 00:03:56.520 --> 00:04:00.120 all the payments go away. A reverse mortgage allows you 83 00:04:00.159 --> 00:04:02.800 to choose if you want to make a payment or not. 84 00:04:03.400 --> 00:04:05.840 Most people choose not, but they still have to pay 85 00:04:05.879 --> 00:04:10.639 their taxes and insurance. Yeah, it's a it's a mortgage, 86 00:04:10.639 --> 00:04:14.120 which is a lean on title. The bank does not 87 00:04:14.159 --> 00:04:16.600 take ownership of the house any more so than they 88 00:04:16.600 --> 00:04:20.040 do with any other kind of mortgage. The difference is 89 00:04:20.079 --> 00:04:24.839 there's no required monthly mortgage payments. There's no well, no term. 90 00:04:25.160 --> 00:04:27.759 The term is the youngest borrowers one hundred and fiftieth birthday, 91 00:04:28.959 --> 00:04:31.680 so we say no term. 92 00:04:31.720 --> 00:04:34.800 But yeah, right right, not likely. That's pretty interesting. 93 00:04:35.439 --> 00:04:39.120 Yeah, and it's really designed to be really flexible. You 94 00:04:39.160 --> 00:04:41.439 can get a lump sum of cash. Some people need 95 00:04:41.480 --> 00:04:43.560 to like fix a roof or they've got one of 96 00:04:43.560 --> 00:04:46.639 the cases. I had a huge i RS debt. Credit 97 00:04:46.639 --> 00:04:49.639 card debts really common right now. So there's just a 98 00:04:49.639 --> 00:04:51.879 lot of ways to do this thing. One of them 99 00:04:51.959 --> 00:04:55.800 is a lump sum. Another is a line of credit 100 00:04:55.839 --> 00:04:58.839 that actually grows and isn't frozen when the real estate 101 00:04:58.879 --> 00:05:01.199 market takes a downturn, which which is very unique for 102 00:05:01.199 --> 00:05:01.959 a line of credit. 103 00:05:02.199 --> 00:05:03.680 Yes, that's why. 104 00:05:03.839 --> 00:05:05.519 That's what I love about when you talk to me 105 00:05:05.560 --> 00:05:09.279 about my own personal situation, you know, because I don't 106 00:05:09.319 --> 00:05:11.839 think I'm that unusual as far as baby boomers go. 107 00:05:11.879 --> 00:05:14.279 I turned sixty five in October. My wife has recently 108 00:05:14.319 --> 00:05:17.759 turned sixty two. So we qualify for this product and 109 00:05:17.800 --> 00:05:20.399 We have a couple of three homes in Austin. One 110 00:05:20.439 --> 00:05:22.680 of them has quite a bit of equity in it, okay, 111 00:05:22.720 --> 00:05:24.759 and we are moving back there to become a homestead. 112 00:05:24.800 --> 00:05:27.360 And what you showed me was how I could leverage 113 00:05:27.360 --> 00:05:30.519 that equity and have options to supplement any sort of 114 00:05:30.519 --> 00:05:32.839 retirement income down the road. Now, I'm not going to 115 00:05:32.920 --> 00:05:35.000 be doing that now. I don't need the money today 116 00:05:35.480 --> 00:05:37.839 because I'm still working and that sort of thing, but 117 00:05:37.879 --> 00:05:40.680 down the road I may. And so it's a sort 118 00:05:40.680 --> 00:05:42.720 of a safety net in case I do want to 119 00:05:43.120 --> 00:05:46.240 tap into at my equity and not have to move 120 00:05:46.279 --> 00:05:46.759 to get it. 121 00:05:47.399 --> 00:05:48.680 That's the key right there. 122 00:05:48.839 --> 00:05:52.120 Yeah. Well, and I love your strategy because you're doing 123 00:05:52.160 --> 00:05:55.879 it while you qualify easily. Right, You've got income, you've 124 00:05:55.879 --> 00:05:58.360 got good credit, You've not hit any sort of life 125 00:05:58.399 --> 00:06:01.439 event that could damage those things. So you're putting in 126 00:06:01.439 --> 00:06:04.480 place now so that if anything happens in the future, 127 00:06:04.639 --> 00:06:07.560 you already have it. You don't have to qualify at 128 00:06:07.560 --> 00:06:10.040 that point, which some of my clients come to me. 129 00:06:10.079 --> 00:06:12.000 At that point when there is a life crisis and 130 00:06:12.040 --> 00:06:13.040 a financial corit. 131 00:06:12.800 --> 00:06:13.519 It could be too late. 132 00:06:14.319 --> 00:06:17.680 Sometimes it is. Yeah, it's often too late because we 133 00:06:17.720 --> 00:06:21.639 still have credit and income qualifying. It can't be you know, 134 00:06:21.800 --> 00:06:24.240 two years late on your mortgage and still make this 135 00:06:24.240 --> 00:06:27.399 thing work. In a lot of cases, sometimes there's magic, 136 00:06:27.439 --> 00:06:29.439 but in general that's not the greatest plan. 137 00:06:30.240 --> 00:06:33.160 So let's talk about some regulations of the One of 138 00:06:33.240 --> 00:06:37.600 the myths around or confusions or misunderstandings around reverse warrants 139 00:06:37.800 --> 00:06:40.120 is the bank takes title to your property, and that's 140 00:06:40.120 --> 00:06:42.319 simply not true. So let's go through some of these 141 00:06:42.360 --> 00:06:45.399 myths that people just don't understand about them. 142 00:06:45.480 --> 00:06:48.639 You know, clear that up, addressing that. Yeah, so biggest 143 00:06:48.759 --> 00:06:51.680 myth that the bank takes ownership and people think, oh, 144 00:06:51.680 --> 00:06:53.920 I'm selling the house of the bank. And I think 145 00:06:54.000 --> 00:06:57.439 that comes from the idea of a charitable life estate, 146 00:06:58.160 --> 00:07:01.279 because there is something weird with charities where you can't 147 00:07:01.319 --> 00:07:03.079 and I don't fully understand it myself, so I'm not 148 00:07:03.120 --> 00:07:05.000 going to speak to the high level of it. But 149 00:07:05.360 --> 00:07:07.879 where you can sell the property and then live in 150 00:07:07.920 --> 00:07:10.319 it for the remaining of your days, that's not a 151 00:07:10.360 --> 00:07:13.959 reverse mortgage. A reverse mortgage is just a lean on title, 152 00:07:14.199 --> 00:07:17.240 just like any other mortgage. The difference is that it's 153 00:07:17.319 --> 00:07:20.399 not a thirty year term. You don't have to make 154 00:07:20.519 --> 00:07:24.120 required regular monthly payments, and there's a lot of flexibility 155 00:07:24.120 --> 00:07:26.720 in the ways you can manage the equity. Right the 156 00:07:26.759 --> 00:07:28.959 line of credit. You can get a monthly payment to 157 00:07:29.040 --> 00:07:31.680 you if you want, and you can manage that. You 158 00:07:31.720 --> 00:07:34.360 can pay payments if you want to or not. It's 159 00:07:34.399 --> 00:07:36.639 fully up to you. I like to think of the 160 00:07:36.680 --> 00:07:40.120 reverse mortgage as finally being in control of your cash 161 00:07:40.160 --> 00:07:42.480 flow for your mortgage and your equity. 162 00:07:42.639 --> 00:07:43.079 I love it. 163 00:07:43.160 --> 00:07:45.000 I love it because on one of our properties, we 164 00:07:45.040 --> 00:07:47.600 have what they call a helock with a line of credit. 165 00:07:48.639 --> 00:07:50.720 And the distinction that you've taught me was there. The 166 00:07:50.759 --> 00:07:52.959 difference is primarily a line of credit on it, as 167 00:07:52.959 --> 00:07:55.160 a helock is a fixed term, you know, one hundred 168 00:07:55.199 --> 00:07:57.560 thousand dollars or one fifty whatever, and you have to 169 00:07:57.560 --> 00:07:59.759 pay it back, which we're doing currently because we have 170 00:07:59.759 --> 00:08:02.839 a allline on it. But we were to roll that 171 00:08:02.879 --> 00:08:05.480 back into a reverse mortgage, you know, not only do 172 00:08:05.519 --> 00:08:08.519 we have an option of deferring that payment if you will, 173 00:08:09.040 --> 00:08:11.160 but the line of credit continues to go up over 174 00:08:11.199 --> 00:08:13.279 the years, which is a lot. 175 00:08:13.240 --> 00:08:14.120 Of people don't understand that. 176 00:08:14.120 --> 00:08:16.000 I didn't really understand that either, but the numbers you 177 00:08:16.040 --> 00:08:18.720 showed me were like, man, this is a this is 178 00:08:18.720 --> 00:08:19.439 a no brainer. 179 00:08:19.959 --> 00:08:22.720 It's beautiful. Right. Once people see it, they're like, wait, 180 00:08:22.759 --> 00:08:25.160 what this this it's too good to be true, And 181 00:08:25.160 --> 00:08:27.040 then I have to remind them, no, no, no, you're paying 182 00:08:27.079 --> 00:08:28.720 for some cost to put this in place. It's not 183 00:08:28.720 --> 00:08:30.319 too good to be true. But it is really good. 184 00:08:30.480 --> 00:08:31.560 Yeah, exactly. 185 00:08:32.120 --> 00:08:35.679 So, so let's talk about if we've talked touched on this, 186 00:08:35.799 --> 00:08:38.399 but senior citizens, if you want baby boomers. I'm a 187 00:08:38.480 --> 00:08:41.000 senior citizen, which is kind of hard for me to say, 188 00:08:41.720 --> 00:08:42.240 but I am. 189 00:08:43.559 --> 00:08:45.440 It's hard to say it. Looking at you, I'm like, no, 190 00:08:45.559 --> 00:08:45.759 you're not. 191 00:08:46.000 --> 00:08:48.840 Oh, you're so kind, you're so kind. You know. 192 00:08:48.960 --> 00:08:52.919 In my in my era, pensions have sort of gone away. 193 00:08:53.120 --> 00:08:55.000 Most people don't have a pension. Let's they work for 194 00:08:55.039 --> 00:08:57.399 the state or something like that. But a lot of 195 00:08:57.399 --> 00:08:59.960 people have four oh one K and you know, investment, 196 00:09:00.039 --> 00:09:01.720 so they're going to live on social security that sort 197 00:09:01.759 --> 00:09:03.679 of thing. But how can explain a little bit more 198 00:09:03.720 --> 00:09:08.279 about how this can supplement people's retirement and how they 199 00:09:08.279 --> 00:09:10.960 can maybe hold their assets over here and use this 200 00:09:11.159 --> 00:09:14.240 tax free He says tax free income. 201 00:09:14.240 --> 00:09:16.080 Correct, Well, we can't call. 202 00:09:16.000 --> 00:09:18.600 It tax free income, but it is tax free under 203 00:09:18.679 --> 00:09:23.600 the IRS laws. So it's cash flow. It's your equity. 204 00:09:23.759 --> 00:09:25.519 Yeah, it's your own money basically. 205 00:09:26.200 --> 00:09:28.399 Okay, yeah, so we don't call it income, but it 206 00:09:28.440 --> 00:09:30.919 is cash flow for sure. And I love that you're 207 00:09:30.919 --> 00:09:34.519 talking about that because the baby boomers all are more creative, 208 00:09:34.720 --> 00:09:38.799 they're more open in general to figuring this thing out 209 00:09:38.879 --> 00:09:41.960 and working with the finances the best way that makes sense, 210 00:09:42.159 --> 00:09:45.240 not some hard fast rule of I need the house 211 00:09:45.279 --> 00:09:47.919 to be paid off. But if we twist that a 212 00:09:48.000 --> 00:09:50.960 little bit, the goal of having a house paid off 213 00:09:51.559 --> 00:09:53.799 is to have no mortgage payment. Right. You want to 214 00:09:53.840 --> 00:09:55.480 lower your expenses in retirement. 215 00:09:55.519 --> 00:09:56.559 Sure, well there's. 216 00:09:56.399 --> 00:10:00.000 Only two ways to do that. Have the house paid off, 217 00:10:00.080 --> 00:10:03.720 no mortgage payment. No. The other one is a reverse mortgage, 218 00:10:03.720 --> 00:10:06.399 no mortgage payment. And so it really allows you to 219 00:10:06.440 --> 00:10:09.320 manage those assets. And I have to say your strategy 220 00:10:09.360 --> 00:10:11.799 is one of my favorites. Where you have some rentals 221 00:10:12.039 --> 00:10:15.120 because rental income keeps up with cost of living, it 222 00:10:15.200 --> 00:10:19.720 keeps spaking. Yeah. So some people will do a reverse mortgage. 223 00:10:19.720 --> 00:10:21.840 They'll get a big lump sum of cash, and then 224 00:10:21.840 --> 00:10:24.840 they'll go buy a new property as an investment, and 225 00:10:24.879 --> 00:10:27.159 they'll remain in the one that they have the reverse 226 00:10:27.200 --> 00:10:30.200 mortgage on, and then that investment pays rental income. 227 00:10:30.480 --> 00:10:33.279 Yeah. I love this, It's beautiful. Yeah. 228 00:10:33.320 --> 00:10:34.879 I'm talking to a friend of mine about that right now. 229 00:10:34.879 --> 00:10:36.240 He's got a home free and clear. It's worth a 230 00:10:36.279 --> 00:10:38.240 little over a million dollars, I said, David, you could 231 00:10:38.240 --> 00:10:42.799 probably get you know, reverse mortgage for maybe four hundred 232 00:10:42.799 --> 00:10:45.279 thousand dollars or something like that, you know, and you 233 00:10:45.279 --> 00:10:47.759 could go buy a property for cash, rent it out 234 00:10:48.159 --> 00:10:50.120 and have additional income or use that income to pay 235 00:10:50.159 --> 00:10:51.759 down the pay down the loan, you know. 236 00:10:52.080 --> 00:10:55.120 Yeah, and depending on his age, so yeah, by age 237 00:10:55.320 --> 00:10:59.279 sixty seven, okay, sixty it probably closer to like three 238 00:10:59.360 --> 00:11:03.320 hundred thousand in day's market, but still absolutely amazing. 239 00:11:03.480 --> 00:11:05.879 Yeah, in that line of credit again goes up. So 240 00:11:06.320 --> 00:11:08.440 when he's seventy, seventy five, eighty years old, it could 241 00:11:08.440 --> 00:11:10.000 be worth half million dollars. 242 00:11:09.759 --> 00:11:12.399 You know. Yeah, can I address why that happens real quick? 243 00:11:12.639 --> 00:11:15.759 Absolutely? You're here, my guess you're the expert. 244 00:11:16.879 --> 00:11:19.360 Well, it's really cool because they designed it's cool and 245 00:11:19.399 --> 00:11:21.559 it's a little silly, but it works in our favor, 246 00:11:21.559 --> 00:11:24.919 I think, as consumers. So they designed the line of 247 00:11:24.960 --> 00:11:28.039 credit and they said, Okay, if somebody's like sixty two 248 00:11:28.200 --> 00:11:30.440 and they're qualifying for the reverse mortgage, now, we don't 249 00:11:30.440 --> 00:11:33.120 want them to have to refinance all the time as 250 00:11:33.159 --> 00:11:37.200 their equity goes up because their property appreciates. So they 251 00:11:37.279 --> 00:11:40.480 added this feature onto this line of credit where it's 252 00:11:40.480 --> 00:11:42.840 a growth feature. So say you start with the line 253 00:11:42.879 --> 00:11:47.039 of credit of one hundred thousand. Right now, the growth 254 00:11:47.159 --> 00:11:50.720 rate is a little less than seven percent, So in 255 00:11:50.759 --> 00:11:52.440 a year, it's going to be one hundred and seven, 256 00:11:52.879 --> 00:11:54.799 in two years it'll be one hundred and fourteen and 257 00:11:54.840 --> 00:11:57.240 a little bit more. Right in three years one hundred 258 00:11:57.240 --> 00:12:00.759 and twenty one. That just naturally happens so that you 259 00:12:00.799 --> 00:12:03.240 don't have to refinance all the time to get access 260 00:12:03.279 --> 00:12:05.679 to more of that equity because in those three years, 261 00:12:05.679 --> 00:12:08.879 your property appreciated and you're going to want to get 262 00:12:08.919 --> 00:12:11.519 access to that equity and you're going to need it. Generally, 263 00:12:11.559 --> 00:12:14.120 most people want it, so why not have it there? 264 00:12:14.240 --> 00:12:16.559 And if you don't use it, it just is just 265 00:12:16.759 --> 00:12:19.159 home equity. Right, So if you sell that line of 266 00:12:19.200 --> 00:12:21.039 credit as part of your proceeds in. 267 00:12:20.960 --> 00:12:23.639 The line of credit eventually kind of grows exponentially, you know, 268 00:12:24.519 --> 00:12:28.960 because of the compounding compounding effect it does, it's amazing. 269 00:12:29.639 --> 00:12:33.480 The other beauty of it, my opinion, is, you can 270 00:12:33.559 --> 00:12:35.919 do anything you want with the money. You could buy property, 271 00:12:35.960 --> 00:12:37.759 you could go on a vacation, you could pay off 272 00:12:37.799 --> 00:12:39.799 the debt that you have, you could pay off credit cards, 273 00:12:39.799 --> 00:12:40.440 whatever it is. 274 00:12:40.759 --> 00:12:40.919 You know. 275 00:12:41.000 --> 00:12:42.320 Yeah, it's your equity. 276 00:12:42.039 --> 00:12:45.039 It's your money, you know. And you could keep your 277 00:12:45.440 --> 00:12:46.240 assets over here. 278 00:12:46.320 --> 00:12:48.960 Let's say you have several hundred thousand or million dollars 279 00:12:49.159 --> 00:12:50.679 in four to one K money and you don't want 280 00:12:50.720 --> 00:12:52.120 to touch that, you want to let that grow. 281 00:12:52.679 --> 00:12:54.240 You could access this to help you live. 282 00:12:55.080 --> 00:12:57.840 It's a beautiful strategy. Right. People don't realize if it's 283 00:12:57.919 --> 00:12:59.960 you know, two thousand bucks a month for their mortgage payment, 284 00:13:00.519 --> 00:13:02.919 what that two thousand dollars a month could grow to 285 00:13:03.399 --> 00:13:06.000 if it was left in other retirement accounts. 286 00:13:06.240 --> 00:13:07.759 Right, that's right, that's right. 287 00:13:08.320 --> 00:13:13.200 So can The other question that people get confused about 288 00:13:12.879 --> 00:13:19.200 is can they outlive the benefits? You said one hundred 289 00:13:19.200 --> 00:13:22.039 and fifty years old? But you know what happens is 290 00:13:22.120 --> 00:13:24.200 something if you have a couple then one of them 291 00:13:24.240 --> 00:13:27.879 passes away. Can the spouse continue to live in the property. 292 00:13:28.360 --> 00:13:32.039 Absolutely? So, really good protections built in today, you cannot 293 00:13:32.039 --> 00:13:34.600 get a reverse mortgage in just your name if you 294 00:13:34.639 --> 00:13:36.200 are married, so we can in. 295 00:13:36.120 --> 00:13:39.159 Any state or just community property states like Texas state, 296 00:13:39.279 --> 00:13:39.720 all states. 297 00:13:39.759 --> 00:13:42.679 Okay, guys, there are some exceptions for some of the 298 00:13:42.799 --> 00:13:46.200 non FAHA programs, so I'm just speaking to FAHA right now. 299 00:13:46.600 --> 00:13:48.879 So the FAHA heckham. If you are married, you have 300 00:13:48.960 --> 00:13:51.960 to include your spouse in some capacity. If that spouse 301 00:13:52.039 --> 00:13:54.320 lives in the home, then they're a full blown borrower. 302 00:13:54.799 --> 00:13:57.919 If they're age eligible, then their barrow. If they're not 303 00:13:58.039 --> 00:14:00.879 age eligible, we have something called the non Borrowing Spouse 304 00:14:00.960 --> 00:14:04.799 Protection and it actually protects that spouse. So the way 305 00:14:04.840 --> 00:14:07.639 it'll work, so two people, let's say they're both age 306 00:14:07.639 --> 00:14:12.519 eligible goole sixty seven, and one of them passes. As 307 00:14:12.519 --> 00:14:16.120 long as they were both borrowers, nothing happens to the mortgage. 308 00:14:17.000 --> 00:14:19.559 That the mortgage will continue on until that second person 309 00:14:19.639 --> 00:14:22.840 passes or decides to sell or moves out permanently, or 310 00:14:22.840 --> 00:14:25.440 defaults on their taxes and insurance. Those are kind of 311 00:14:25.440 --> 00:14:27.519 the triggers for when the more excuse me, when the 312 00:14:27.559 --> 00:14:30.840 mortgage is due. Okay, But let's say instead that there's 313 00:14:30.879 --> 00:14:34.519 one spouse who's sixty seven and one spouse who's fifty nine. Well, 314 00:14:34.559 --> 00:14:37.320 we have what's called a non borrowing spouse protection where 315 00:14:37.320 --> 00:14:40.159 that fifty nine year old isn't a full blown borrower. 316 00:14:40.519 --> 00:14:42.759 But let's say the sixty seven year old does pass first, 317 00:14:43.639 --> 00:14:45.639 the fifty nine year old is called a non borrowing 318 00:14:45.679 --> 00:14:48.559 spouse and they can apply for a deferral for the 319 00:14:48.600 --> 00:14:52.559 loan repayment, and often they're granted it. There's some paperwork, 320 00:14:52.639 --> 00:14:55.159 it should be pretty seamless. They have to make sure 321 00:14:55.200 --> 00:14:56.960 that they were married at the time that they did 322 00:14:56.960 --> 00:14:59.480 the mortgage and it was disclosed. They were disclosed as 323 00:14:59.480 --> 00:15:02.320 a non bar spouse. So spouses who get married later 324 00:15:02.399 --> 00:15:05.600 on they're not protected. If like a single guy gets 325 00:15:05.600 --> 00:15:08.360 a reverse and then gets married later, that new spouse 326 00:15:08.399 --> 00:15:11.559 isn't protected. Okay, So a good strategy is refinance are 327 00:15:11.559 --> 00:15:15.639 onto the loan. But the numbering spouse protection is a 328 00:15:15.679 --> 00:15:18.600 really nice thing because now that younger spouse can live 329 00:15:18.600 --> 00:15:21.279 out their days and the mortgage isn't due until they 330 00:15:21.320 --> 00:15:24.279 pass away, sell or move out permanently, or default on 331 00:15:24.320 --> 00:15:25.320 taxes and insurance. 332 00:15:25.480 --> 00:15:28.039 Okay, now I've been doing forward loans. If you will 333 00:15:28.080 --> 00:15:30.639 purchase loans and refinance for forty years. So I'm very 334 00:15:30.679 --> 00:15:34.480 familiar with how that structure works in how people can qualify. 335 00:15:34.600 --> 00:15:37.120 Tell us a little bit more about the qualifications of 336 00:15:37.159 --> 00:15:40.919 how a reverse might work, because there's some people that 337 00:15:41.080 --> 00:15:43.360 it's in my opinion, there's like three categories. There's people 338 00:15:43.360 --> 00:15:46.240 who really need the money now, there may be people 339 00:15:46.279 --> 00:15:48.360 like myself who don't need the money now but maybe 340 00:15:48.519 --> 00:15:51.159 wanted to have access in the future. And there could 341 00:15:51.159 --> 00:15:53.399 be just people who are rich and don't need the 342 00:15:53.440 --> 00:15:55.600 money at all. Okay, but it still could be a 343 00:15:55.639 --> 00:15:57.960 benefit for them. So put on your council hat and 344 00:15:58.480 --> 00:16:00.360 share with us a bit a little bit about how 345 00:16:00.480 --> 00:16:05.240 reverse may work for pretty much any senior and how 346 00:16:05.320 --> 00:16:06.600 people could qualify for that. 347 00:16:07.279 --> 00:16:09.279 I love it. So let's start with the last example. 348 00:16:09.320 --> 00:16:12.759 So the wealthy. There was a loan after I interviewed 349 00:16:12.759 --> 00:16:14.840 not too long ago, and he said, you know, this 350 00:16:14.879 --> 00:16:18.399 client had fourteen million assets, he still did a reverse mortgage. 351 00:16:18.679 --> 00:16:20.600 And so what we talked about was, well, why because 352 00:16:20.639 --> 00:16:23.840 the wealthy don't view their money the same. The wealthy 353 00:16:23.919 --> 00:16:27.080 view this is a smart strategy. Why would I tie 354 00:16:27.159 --> 00:16:30.080 up all my equity and not have it working for me? 355 00:16:30.960 --> 00:16:34.320 And so wealthy will still do this and it's a beautiful, 356 00:16:34.320 --> 00:16:37.519 beautiful thing. I actually find you and your situation kind 357 00:16:37.519 --> 00:16:40.759 of the middle ground between wealthy and needs based a 358 00:16:40.919 --> 00:16:43.679 beautiful I wish more people in your situation did this. 359 00:16:43.919 --> 00:16:47.600 I think this is a saving grace of the American 360 00:16:47.639 --> 00:16:51.000 retirement because just like you, you're like I may not 361 00:16:51.120 --> 00:16:53.960 need this money, but it's ready and available if you 362 00:16:54.000 --> 00:16:56.039 do so, you're not going to get into a situation 363 00:16:56.080 --> 00:16:58.559 where you're not paying your credit cards on time, you're 364 00:16:58.600 --> 00:17:01.840 not paying any other mortgage or property taxes. That's right. 365 00:17:02.120 --> 00:17:04.160 Keeping yourself afloat on those things put you in a 366 00:17:04.160 --> 00:17:08.160 better financial situation for all credit, including the reverse mortgage, 367 00:17:08.640 --> 00:17:11.079 and it protects you. I mean, that line of credit 368 00:17:11.079 --> 00:17:13.079 can grow so big. It can pay for care when 369 00:17:13.079 --> 00:17:15.440 you're in your nineties if should you need it, or 370 00:17:15.559 --> 00:17:18.359 a new roof, or you know, people joke about the vacation, 371 00:17:18.440 --> 00:17:19.880 but that's not typically what I see. 372 00:17:20.039 --> 00:17:22.799 I know, I know, But it could be to maintain 373 00:17:22.839 --> 00:17:26.319 your property. I mean, let's say it, Yes, absolutely, hvac's 374 00:17:26.559 --> 00:17:30.279 ten thousand dollars. Yeah, just to maintain your property or 375 00:17:30.359 --> 00:17:31.960 update your property. Things like that too. 376 00:17:32.359 --> 00:17:35.039 Yeah. I had a lady who who redid her reverse 377 00:17:35.039 --> 00:17:38.200 mortgage every now and then we can refinance them and 378 00:17:38.279 --> 00:17:41.119 when rates drop we often do. And that was her thing. 379 00:17:41.160 --> 00:17:43.160 She goes, I just need ten thousand dollars because my 380 00:17:43.200 --> 00:17:46.200 water heater went out right, right, That's like, that's ten 381 00:17:46.240 --> 00:17:47.519 thousand bucks for the water heater. 382 00:17:47.680 --> 00:17:48.319 Yeah. Crazy. 383 00:17:48.319 --> 00:17:50.599 So we've got that middle ground that I wish everybody 384 00:17:50.640 --> 00:17:53.400 in that middle ground would do this. It is such 385 00:17:53.440 --> 00:17:54.000 a smart thing. 386 00:17:54.119 --> 00:17:56.799 And I heard a stat that I don't know how 387 00:17:56.799 --> 00:17:59.680 accurate is, but it came from financial news source I forget. 388 00:18:00.119 --> 00:18:02.359 But in the senior market, let's say, in the baby 389 00:18:02.359 --> 00:18:05.960 boomer over sixty two, there's about seven trillion dollars of 390 00:18:05.960 --> 00:18:07.640 equity in the in the country. 391 00:18:07.720 --> 00:18:09.519 Is that Is that somewhat accurate? 392 00:18:10.160 --> 00:18:12.200 At thirteen trillion is the most recent. 393 00:18:12.160 --> 00:18:16.119 Thirteen trillion dollars, and only about four or five percent 394 00:18:16.160 --> 00:18:17.880 of seniors actually taking advantage of this? 395 00:18:17.960 --> 00:18:18.599 Is that correct? 396 00:18:19.240 --> 00:18:22.319 Our market penetration is somewhere between two and four percent. 397 00:18:23.200 --> 00:18:27.279 You're right, it's but it's partially because it's misunderstood, it's unknown, 398 00:18:27.359 --> 00:18:30.519 and it's weird. People are just in the habit of 399 00:18:30.599 --> 00:18:32.559 paying a mortgage. When I tell them you don't have 400 00:18:32.599 --> 00:18:35.559 to pay it anymore, they go they just psychologically. It's 401 00:18:35.559 --> 00:18:38.000