Saving with Steve, September 20, 2022
Saving with Steve with Steve Sexton
Guest, Steven Sless, Utilizing Home Equity to Keep with Inflation
The Save With Steve Show, hosted by Steve Sexton will help you with ins and outs of money. We talk about financial issues that that could be costing you thousands of dollars and keeping you up at night.
We talk about “money”… tax reduction, saving more, how to spending less and get more, 401k’s, risk management, retirement, and everything under the sun that relates to you having a healthier happier relationship with money.
everyone has their own unique views and needs when it comes to financial success if you'd like to leave your financial woes behind and live a life of Financial Freedom you've come to the right place welcome to the saving with Steve show hosted by Steve Sexton the show will help you with the ins and outs of money we talked about financial issues that could be costing you thousands of dollars and keeping you up at night we talked about money tax reduction saving more spending less 401K risk management retirement and everything under the sun that relates to you having a healthier happy relationship with money now here is your host of saving with Steve Steve Sexton<br>talk about the ins-and-outs of money pretty much everything under the sun release the you having a happier healthy relationship with money my name is Steve sex and I want to thank you for joining us you know what last week we had a great episode with Tom Hammel he's the RV director for Kuhn Auto and RV group and you know when August was Adventure month we started talking about RVs what are the own or to rent if you're just getting started with the Jew how they can take care of you on the road but more importantly fishing with an inflationary time we're we're we're seeing people that were saying hey look I'm saving money taking an RV for a week as opposed to Flying somewhere getting a hotel getting a rental car spending all that money and the reality is they had a better time with her family cuz if you want to check out that episode episode number 91 yet we're almost at 100 episodes can you believe that and just go to the skating with Steve Page sitting with Steve. If you have a top<br>and we have the number of Cox the next one coming up as one of the ones our listeners want to know about just go to view or I'd like to hear about this it's yours and saving with Steve. Us just let us know what you like to hear we can get it on there we will do it let's talk about our guest today studies are showing costs are going up because of inflation we're seeing Market volatility and seniors are wondering if they have enough money to last through the retirement in fact we were doing a sequence of returns based off which was and people are saying oh my God if it continues down this path and we have three or four years were the Market's - I can run out of money early this isn't good and you know like we got here we're done with covid-19 yours are having issues with getting long term care because it covid you know what the realities many people might not realize that they are home equity likely represents a large portion of their Network that people over the age of 62 can collectively use their housing<br>and you don't understand I don't understand how they could be and tax official incorporate that wealth into the retirement income strategy and that's the reason why we have our guest here is named Stevens last name first want to say hi Steve I've been talking to you long so how you doing great to be here thanks for having me<br> a little bit of background on Steve you know Auntie is 20 years experience in the mortgage industry 13 years devoted to reverse mortgages he's one of the fuse mortgage professionals to have the Covenant certified long-term care designation as a cltc designation you know what Steve is becoming leader in its industry by educating people through seminars videos coming on to the media like this he was in 2021 named as the reverse mortgage Game Changer changer by Yahoo finance so he's done some pretty significant stop you've helped out a lot of people and we're just grateful Steve's here thank you so much for having me back I'm excited but let's just start talking you deal with seniors all over the country and they're very very concerned let's start talking about some of the concerns of the rising cost of consumer goods and of course Rising gas prices so for many folks you know leaning towards retiring looking into retirement or even those currently<br> tired of the risks in the stakes are extremely High Street Wrightwood Rising inflation mean to somebody's retirement portfolio particularly those on a fixed income is there in danger of now outliving their money or having to draw more out of their financial plan than the financial plan may have been structure to allow yet there is an unprecedented 11.2 trillion-dollar Steve trillion with a t trillion dollars in untappd housing wealth home equity good folks to be eight folks the age of 62 plus are sitting at home equity and often times is very appropriate to be incorporated into the overall comprehensive retirement plan to prevent folks from Oakley out living among other gas prices they're still 40% more than where they were you know like this time last year or two before that and you see cost of me fish the whole shot<br> more than 9% so you know what people really feeling the punch especially when you know you're retired you're not really working so you're spinning things mostly on items that have appreciated significantly because of inflation and you know why will it stop word is right there even if they do you know what people see on fixed-income is still at a lower level so but let's just start walking into this little bit you know how can somebody go about accessing the wealth of their house and use it for income weather to be creating income for their personal expenses or in case of emergency how can they really four ways to go about accessing the wealth that you created in your home number one is what everybody's familiar with and that's a traditional Cash out refinance however for folks on a fixed income right taking out a traditional Cash out refinance will that also means a traditional monthly mortgage payment so it may not be the most beneficial manner in which to go about accessing your Equity particularly if you're on a fixed income and you can't hide that<br> additional payment to your monthly budget option number 2 a key lock a home equity line of credit most folks are familiar with those where you can walk in to your local bank and get one relatively easily these days the problem with the Helix do you think back to 2008-2009 the at the last economic downturn folks that had he locks and relied on those he locks for income while they saw those he likes to spend it reduced or Frozen really at the discretion of the bank and the bank can do that at any time when one of those lumps option number three sell your home but most folks we find one age comfortably in the home that they love so don't come to option for which is leveraging the housing wealth at home equity with a reverse mortgage a reverse mortgage will allow you to borrow the funds in the home borrow the equity okay with but reverse mortgages have flexible repayment options so there is no mandatory monthly mortgage payment folks can choose to make a payment of any denomination anytime they want to or like most folks that have reverse mortgage Steve they can<br> her pay back until they leave the home so they can access well from their home to fur the pay back the loan gets paid back the money that they borrowed plus interest when they leave the home but they don't have that mandatory obligation of a monthly mortgage payments are from a cash flow perspective Steve it's a really great way of very Savvy way to leverage their housing well so I'm going to ask you one of the first questions that we got from our viewers blog not right now but before the human people knew we were going to have you out back on can somebody buy a house with a reverse mortgage you can it's it's the sweet we call it the most people don't know but it's a potential giant right I mean it is the reverse mortgage for purchase is an amazing way to buy a home and never have to make a monthly mortgage payment right so you buy a home what's that you're going to buy a $400,000 home you have to put down roughly 50% Steve so you can put down about $200,000 in cash you're buying a $400,000 home your responsibilities moving forward<br> are the property insurance the taxes and just the maintenance and upkeep of the home because you own the home but you can purchase a home using half of what you would ordinarily pay if you were going to just pay cash for that home and never have to make a monthly mortgage payment how much can somebody get a reverse mortgage for about 50% of the older you are the more Equity you have accessible to you so the very top is going to be about 55 to 58% by a million half-dollar home and you know what they need a $700,000 reverse mortgage is that possible to purchase a home as well so we we can we actually can land on homes valued all the way up to four million dollars or actually start loan amounts up to four million on homes valued<br> the ten billion dollars longer the the loans of Last Resort that you heard about you know 15-20 years ago you have a lot of very high net-worth Savvy individuals that are using reverse mortgages either the jumbo non-government reverse mortgages or the FHA Halcomb home equity conversion mortgage and you can use both to purchase a home as well that and I wanted to ask that question because there's some myths and misinformation out there one of the things I do want to point out is you know what we just had somebody that actually bought a house and used a $600,000 reverse mortgage and if you think about it they're $600,000 reverse mortgage would cost them no summer arranged around $3,500 a month so it's $3,500 a month that they no longer have to take out of there but it was still allows me to have them or Emmy that's almost $40,000 a year it's more than $40,000 a year to provide hey this is my retirement<br> shot so you know what they're looking at it from that perspective and also looking at it in the perspective of look at you're going to purchase a $600,000 home right you can do so with a normal mortgage but again you have that $3,000 3500 mortgage payment but let's say you're a a perspective cash buyer right you can afford you have the means to pay $600,000 in cash likely that's going to come from your retirement portfolio right when you're a market of high inflation rising cost of consumer goods $6 a gallon of gas in some places by 10th and a portfolio that may not be performing like it was over the past few years but a lot of people look at their retirement portfolios in recent years and I felt pretty good and now those same folks are looking at those portfolios and they're like not not doing as well as we have been doing $600,000 from the Investment Portfolio and apply all of that toward purchasing the home or would it be more advantageous to use only half of that and leave the other half to continue to be<br> invested in in in the markets and growing for you over to recover so for expert advice for having a happier relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevents you from living a life of Financial and personal freedom hi I'm Steve Sexton post of the saving with Steve show where did he talk about the in an ounce of money those financial issues it could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune in to the saving with Steve show join me Steve section of the saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with Steve. Us that's saving with Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton the ins-and-outs of money we've got a special guest here today Steven / he is a reverse mortgage through here he's been educating our listeners the last few years and every single time he has some Pearls of Wisdom and people really just love it he also dispels the mist and misinformation so let's talk a little bit about some of those missing this information beyond what we hear about people go on oh my God Mom and Dad a reverse mortgage bank took the house and you know what I hear that I actually know what's going on so I know it's not true or they have options so could you walk people through that absolutely yeah that is that is a misconception right so let's start let's start right there right with a reverse mortgage a reverse mortgage if it's just a mortgage<br> against the homebrite no different than a traditional forward mortgage or a traditional home equity line of credit what a reverse mortgage does however is it provides you with flexibility that knows other mortgages do not put the folks here there's no monthly mortgage payment required and they immediately think it's too good to be true and it's some sort of scheme or scam or that were at the government's way to take your home or the bank's way to take your home and I'm here to tell you I've been in the mortgage business for 20 years my parents have reverse mortgage other family has a reverse mortgage and in no way shape or form does the lender or the government take your call you still own the hall the choice to make monthly mortgage payments is yours if you want to you can write you can make monthly mortgage payments and treated no different than a traditional mortgage loan or you can defer to pay back until you leave the home but never as the bank to get home so long as you pay your property taxes you pay your homeowner's insurance and you maintain the those are the requirements of the law if you don't do those if you don't pay your taxes and you have a traditional mortgage see if you're going to get<br> going by the municipality that you live in you failed to make your insurance payment there's a chance you could be foreclosed on those risks are no different on a traditional loan and they are on a reverse luck. So for example we have somebody who let's say they just got a reverse mortgage last year obviously housing prices were way up here you know they have a million-dollar home $600,000 reverse mortgage and housing prices go by the way of 2008 and see that house value drop down to pay $500,000 because $600,000 reverse mortgage and they pass you know what how does that affect the air and you know what would the are the options be reverse mortgages or non-recourse loan Stephen that means that neither you you're estate or your heirs are personally liable to pay back the reverse mortgage that right so I think of reverse mortgages having gap insurance there you go to the dealership to purchase a new car you buy gap insurance<br> how can I protect you in the event that you owe $30,000 on your car you total your car the insurance company cut you a check for $20,000 in the same mat right so if you owe more than the value of the home you can simply leave the keys on the kitchen table and walk away your heirs can leave the keys on the kitchen table and walk away however like any other mortgage right because again be sure just mortgage is like any other mortgage if you owe 100,000 and the home is worth two hundred thousand that is yours or your heirs to keep try so any build up Equity is going to be yours now a lot of folks are experiencing a real rise in their housing wealth levels they've seen their housing wealth grow tremendously in recent years and they're actually able to refinance a reverse mortgage in a very similar fashion to refinancing their traditional mortgage 21 lower the rate in a good interest rate in a lower interest rate environment we don't see that right now cuz Rachel little bit higher than they have been but you can actually borrow one today's value inn<br> also like in today's value Steve Rice if you take a reverse mortgage out today and your home is worth $500,000 you're borrowing on the value of $500,000 if next year the home is worth 450 you guess what you borrowed on $500,000 last year your loan is federally insured guaranteed and you're borrowing at the top of the market at that point and you're hedging against a future Market correction when it comes to your mind you're saying is you can get a lump sum out do you have a mortgage and you credit income so so for example we have hey I got it up here at five hundred thousand now it's down here at 400,000 how does it affect those three things with the reverse mortgage you can do a few payout options right payout option number one is a 10-year payment where you get a check sent to you every month by the reverse mortgage lender and you get that check forever for the rest of your life to is a term payment we see terms used a lot when clients come to us and they're trying to delay their social security they're trying to get to the past the point where they're over seven years olds<br> qualify for a larger check and they say hey see if you know if we would really like to delay Social Security but we don't have the means to do so we want to turn on a turn payment we only want to receive funds from a reverse mortgage for 3 years or 4 years or 5 years worth of that time frame a bit you can also put your money into a line of credit in the line of credit on a reverse mortgage is vastly different than a traditional key lock for a home equity line of credit in that one reverse mortgage line of credit Steve are federally insured making never be suspended reduced or Frozen Here regardless of the market regardless of what would be your housing appreciation depreciation does not matter. Line of credit also come Steve with a guaranteed rate of growth think of it like your credit card balance or your credit card limit I should say is being increased every year allowing you more borrowing power over types of very very powerful tool you can take a lot of some right a lot of folks even those you know even Financial professionals and those really in the know<br> a lot of nuances and intricacies about reverse mortgage and you got to reach out and talk to a professional whether it's me or somebody there's a lot to learn about reverse mortgages not just what you see from Tom Selleck on TV so you can draw out some cash up front you can turn on a 10 year old return payment all simultaneously and create multiple different revenue streams as you age in the comfort of your own home you said that because you know what there's some of those things are you know I been helping people are referring people to reverse mortgage specialist for more than a decade when it's necessary or needed and you know what I don't think still people I know everything but I know some things in the thing you just told me I didn't know and I was like wow I didn't realize that I didn't realize that your payment was<br> why's that there is a growth rate that goes along with it so you can get a higher payment than keeps up with inflation which is wonderful now how can I connect with you to get information to say hey I want to look a reverse mortgage Steven how can we go back to you on that one 470-575-4108 14 7575 you can visit us on the web at dustless group.com that's the group.com we're also on social media at more with less with a YouTube channel with a lot of videos a lot of information on their podcast interviews media appearances Facebook LinkedIn Instagram Twitter were trying to spread the gospel of reverse mortgages to as many people as will hear us and they're going to find you<br> tell me when things don't like that I appreciate you being here our listeners and viewers appreciate you being here because you have Pearls of Wisdom and you know what I don't learn things too often and today I did I was just really happy with that soap thanks again stay safe stay healthy and folks if you're interested in a reverse mortgage or just want to get educated look for Steve Stevens / on Facebook and what was it one place on your phone number phone numbers for 10814 +75-750-814-7575 and on the web at the Sledge group., at this last group. Stay healthy will see you bye bye your relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevent you from living a life of Financial and personal freedom hi I'm Steve Sexton post of the saving with Steve show where did he talk about the in an ounce of money those financial issues that could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune into the saving with Steve show join me Steve section of saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with Steve. Us that's saving with Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton welcome back to the saving which TV show where we talked about the ins-and-outs of money I want to see a special thanks to some of our Distributors at AM FM 247 BBS radio UK help radio we really appreciate them you know what helping her listeners and viewers solve problems and live a life of personal and Financial Freedom if you'd like to check out more episodes you can always go to saving with Steve. You asked if you're looking to get on the Insiders club and look at the behind-the-scenes videos guest gifts and more hate go to this Facebook at skating with Steve sex and you know what let's just talk right now about how to avoid the debt trap I mean there's a lot of things that are going on yet been frowned upon<br> maybe situations when one has the option to include that this could include taking a home loan Education Loans personal loans in advance like Health emergencies and more whatever the situation is it best to avoid taking multiple lines of credit if this happened much too sure he or she can repay these loans on time not over you lysing present limit is vital in ensuring that we don't fall into a debt traps what's a d'etre okay so think about this it's a situation where borrow is forced to take on a new loan simply repay an existing loan debt obligation surpass1 slow repayment ability K loans are repaid in two components like principal and interest over a. Of time only because of expensive or high ticket loan if borrows income is adequate a big long can be repaid without hassles no big deal okay<br> detrapel however if the equal monthly installments are not paid on time the interest in the amount and keep increasing in Maine food late payments and penalties this place when the world it could create a default and likewise bad debt were they have to write out the dead okay you know what this scenario happens all the time where I borrow mine MC take up a fresh loan to replay previous one a small loan they all supposed to borrow into a death trap if she can't repay it on time and interest components it's important to stay away from that there's good and bad that you know what we all have good that you know you bought that car you're paying it off not a problem and you haven't asked that you have a home or even a rental property where you know what you take on the debt relief a rental property where you have cash flow and you're creating good income from so you know we have a good day okay<br> avoid bad debt or getting into a debt Trap game first of all it's important to create emergency fund one of the best ways to avoid a debt trap is to have an emergency fund that can be equal to 6 months salary set aside for emergencies don't you make $4,000 a month * 6 is 24000 once you get there it'll help you avoid the debt trap so you don't have to pull out the credit card or take out another loan in case you have lose your job you have emergency for their help your house your car you have the bill to pay for the supposed to shove it on a credit card consolidation loans understand one might make sense because if you have a high interest rate credit card at 5 or 6 and we got $30,000 for being 12 13 14 per cent and you can go get a personal loan or five or six or seven percent that works okay because it's likely that you're going to make us smaller monthly payment but you know what you just cleared out the dead on the credit card so it's important to understand that you have to solve the spending problem<br> when you consolidate loans otherwise you could just be creating a bigger debt and hole for yourself okay next checking monthly expenses you keep your splurges in check we all have debit cards and credit card many people put that credit card payment on there he put on a credit card put on a credit card and then the next thing you know what the end-of-month are getting this building until about 1 or they have a debit card they just tap it or sticking in put their coat in there good to go but they don't pay attention to it so you want to check all your monthly expenses make sure you understand what you're spending on in eliminating those things that you're not getting any benefit from okay like those delivery services the wine clubs if you don't even go pick up your wine the memberships for the health club if you don't even go to you know what the balance in your monthly Debt Service couldn't what's rule of thumb is this hey don't let your monthly expenses exceed 40% of your net monthly income if you have a hog 50%<br> it's critical to avoiding a death trap you know what also tracking the market value of your home it's really important because you know what if you have a loan that six 700,000 and the value of your house goes down to five hundred thousand K you could be upside down now you might say hey I'm okay I can make my payment and you might be in the situation if you don't read the fine print were mortgage company might come back and say hey look The Valleys drop below the market so you're going to have to pay some extra money to get either. So it's important that you understand those things K and track the equity of your home to make sure you're not caught off guard financially leverage cash flows to prepay high-cost steps so list all your deck what the interest rate is what the payment dates what's it what's the minimum payment make all those minimum payment money you have shove it on the one that you want to pay off first don't you get to a point where that's paid off take the money you're paying on that one added to the minimum<br> position where you're earning an interest not painting Interest next when the biggest thing is they avoid it's in voiding impulse spending where the world of instant gratification we go here because we want this Starbucks are we want this shirt you want those pants we want that new car for the new TV it creates a debt trap because you could Finance it or throw it on a credit card you want to create a scenario we start thinking twice do I really need this new TV for $1,000 do I have lice in the old one K and you know what A good rule of thumb is when you say hey I really like like to get this way today. Of sight out of mind hey you not going to spend it if it's something that you actually need you'll turn around and go get it and you know what I want to thank you all for Jonas to hear on saving with Steve where you know I'm going to get my best advice to help you retire smarter we're going to talk about the ins-and-outs of money next week we have two wonderful gas you know what's Stevens last was wonderful again if you want to go to the website<br> shaving with Steve. Us and go to episode number 92 you can listen to this again and again or any other episode look forward to seeing you next time this place right here on saving with Steve stay stay stay healthy 5 I thank you for joining us for the saving with Steve show hosted by Steve Sexton to learn more about the show and how to become a guest or sponsor visit saving with Steve. Us that stay with Steve. Us join us again next time as we continue to talk about everything under the sun that relates to you having a healthier happier relationship with money this has been saving with Steve show hosted by Steve Sexton<br>