The market rollercoaster stops here


ADV Valles-rsBy Alain Valles, CRMP, President, Direct Finance Corp.

If you are like many Americans, some or all of your retirement income is tied up in the stock market. Perhaps you own stock directly, or participate in a mutual fund, or an annuity, or have invested in a 401(k) or company pension plan. So you probably pay attention to how the market is doing, hoping that your savings will be protected and – hopefully – continue to grow.

But trying to follow the ups and downs of the stock market in recent months is enough to make you dizzy! First it goes up. Then it drops like a rock. Then it wavers. Who can tell which way your savings will go next? It can be disquieting, stomach churning, and even frightening, to see your financial future batted around, with no guarantee your money is safe.

If you are seeking a more secure and stable source of cash flow, you may be sitting in it right now – your home. The equity you have built up by making mortgage payments over the years has real value. That equity could be a reliable source of tax-free immediate cash, or can give you the peace of mind of being able to access funds in the future if needed. Reverse cash is never considered “income” (it’s debt).

Most homes have appreciated in value from when they were first purchased, meaning your equity has grown as well. For example, according to the Lincoln Institute of Land Policy, in 1975 home values in Massachusetts averaged $32,985. In the first quarter of 2015 the average home value in the Bay State was $347,356 – more than a tenfold increase.

So there may be plenty of money locked up in your home. The problem has always been accessing the value in a form that you could use. Taking out a conventional mortgage or home equity loan means having yet another monthly payment, at a time when that might be a financial burden.

Enter the Home Equity Conversion Mortgage (HECM). Also known as a reverse mortgage, a HECM is a federally insured loan program that allows qualifying seniors 62 years or older to access the equity in their homes in the form of cash, a monthly check or a line of credit that is available for as long as you live in your home, with the significant advantage of not being required to make a monthly mortgage payment.

Reverse mortgages have been the solution to needing additional monthly cash flow, paying off debt, funding home repairs, allowing people to stop working, affording healthcare, and giving peace of mind that money is available if ever needed. Most importantly, reverse mortgages have been a solution to get off the stock market rollercoaster.

If you’d like more information about the pros and cons of a reverse mortgage and scenarios for your specific situation, please give me a call or email me. I’d be glad to provide details.

Alain Valles, CRMP and president of Direct Finance Corp., was the first designated Certified Reverse Mortgage Professional in New England. He can be reached at 781-724-6221 or by email at Archives of articles from previous issues can be read at