WEALTH vs CASH FLOW:
Which is the most important?
Building
Wealth
Will using a reverse
mortgage maximize wealth? If you want to leave as large an estate as possible, setting
up a reverse mortgage credit line without using it may accumulate available
credit faster than the house appreciates and could eventually be worth more
than the house. The growth is guaranteed by the contract at the same rate as is
on the note for any funds used. This strategy may also eliminate the expense of
long-term care insurance by providing a substantial fund with no monthly
premiums.
However, if you are looking
ahead to selling your house in the future or already have a mortgage on the
house, using the credit line or paying off the mortgage with the proceeds of a
reverse mortgage could reduce wealth – unless you can preserve retirement funds
that were being drawn down to pay the mortgage.
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