ALBUQUERQUE, N.M./ January 08, 2018 (STLRealEstate.News) Picture this. A couple is about to retire and they want to reduce their living expenses, and hopefully eliminate their mortgage payments. So they sell their house and make $185,500 from the sale.
They are now in the market for a new home, and they want to pay in CASH.
Most real estate agents would show them homes for $185,500 or less, which is currently the median home value in Albuquerque. But those typical real estate agents would be doing that couple a huge disservice.
That’s because, using one often overlooked yet perfectly legal technique, that couple could immediately double their purchasing power and be able to afford a house for $371,000.
By doing that the real estate agent would earn a gross commission of $22,260 rather than $11,130 and the couple would still be able to live in the larger house for the rest of their lives without ever having to make a mortgage payment.
If this sounds too good to be true, consider the background information.
Baby Boomers are projected to be the wealthiest generation until 2030. But not everyone feels so well off. In fact, many people who are 62 and older are desperately looking for a way to increase their cash flow.
That’s because up to $6 trillion of the wealth owned by Baby Boomers is tied up in one of their biggest assets: Real estate. Owning a home is one of the biggest gifts and curses to the Boomers. This one asset can represent up to 80 percent of an individual’s net worth.
When people approach retirement age, having their wealth being “locked away” in their home can seem like a huge problem.
They need cash to live on, and they often rush into downsizing. The danger is that if they handle it the wrong way they could continue to be cash poor in spite of being homeowners. Worse, they may have enough purchasing power for a downsized home even after a sale.
Savvy real estate agents are now increasing the purchasing power for their clients while solving their cash flow issues.
The technique is called a Home Equity Conversion Mortgage (HECM) also known as a Reverse Mortgage.
These specialized loans are designed to help older homeowners who want to get rid of their mortgage payments and increase their monthly cash flow so they can pay for their everyday expenses.
Reverse mortgages are ideal for Boomers looking to downsize or upsize from their current home and worried that they don’t have enough saved up for retirement.
Real estate agents can earn a greater commission if their client chooses to use a reverse mortgage to purchase a new home.
Gordon Mitchell of New Mexico Reverse Mortgage is opening up the doors for his new intensive course on reverse mortgages for real estate agents. This course covers the technical details and definition of a reverse mortgage. It also includes tips on how to implement them with older clients, particularly those 62 years of age or older.
This course is sponsored by Fidelity National Title. Agents that complete the course will receive a three hours of continuing education credit.
Classes are $30 per session. Email Gordon Mitchell at gordonm(at)reversenm(dot)com or call (505) 293-1567 for more information.
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