Funding Your Resort & Retirement Home
& Dispelling Reverse Mortgage Myths
You have found the perfect property where you want to spend the best part of your life. But, how best to fund it? With equity from the sale of your current home or
a mortgage? Since Congress recently passed the Dodd Frank
Act, mortgage regulation has significantly changed. This impacted how loans are made, who can make them and their
terms. Since conventional interest rates are around three
percent, smart investors know that a mortgage can free up
assets to increase income through other investments.
ideal-LIVING has identified Skyline Home Loans, who
offers a variety of mortgage programs for buyers to consider
when planning for retirement. They are unique because unlike most major banks, Skyline lends both reverse and forward mortgages. They offer competitive rates on traditional,
conventional loans, including fixed and variable rates, FHA,
VA, and government loans, as well as reverse mortgages.
Scott Cohen, a Certified Senior Advisor, and a licensed
Mortgage Broker with Skyline Home Loans, encourages
making a home continuum plan to take you through your
entire life and insure your wealth. “Mortgages are a wealth
management tool,” Cohen said. “The first thing we do is
strategize with clients, by analyzing their assets, income,
credit profile and housing needs, then develop options to
meet their criteria.”
What is a reverse mortgage?
Reverse mortgages have always been an estate-planning
tool, even though they were not marketed that way. Historically, they were used as a “last resort” in case you ran out
“One of the biggest advantages of achieving senior status
is the ability to access the equity that you have built over
the years, older borrowers are favored and credit is not the
determinant for loan approval,” says Cohen. Available only
after the age of 62, a reverse mortgage can help to preserve
assets for future cash flow and/or serve as a tax and an estate-planning tool.
The new reverse mortgage establishes an equity sum and
then figures out how best to distribute it. You get to access
all of your home’s equity. You choose monthly distributions,
or make no payments if it’s a new purchase loan, until all
of the equity has been distributed. You can even pay interest
only, to offset capital gains taxes with interest deductions.
You decide how you want to use the equity.
In order to establish the equity sum, the mortgage lender
uses an algorithm that examines age (assumes life expectancy of 100), equity in property, home value ($625,000 or
less) and an interest rate.