This is my blog that brings you the latest mortgage information.

Where do you fit in?

Tue, 02 May 2023 00:02:41 GMT

Where do you fit in?

An article written by Dori Zinn, on Yahoo Finance, explores the average retiree income and expenses.

The average 65-year-old has a monthly pre-tax income of $4,611 and spends about $4,345, not a lot of wiggle room for any unexpected expenses. The average retirement savings is about $200k and needs to be budgeted accordingly to last for both planned and unplanned retirement needs and wants.

Home costs account for 36% of annual expenses. What if you could continue to own your home and take advantage of all the years of hard work that went into building up your home equity without increasing your monthly expenses? The Reverse Mortgage might be the answer.

If:

You love where you live?

Your home is your forever home?

You want to gift the home to the kids?

You want to protect your spouse?

You want extra money available for the unexpected?

You want to enjoy the trapped equity without mandatory payments?

Then a Reverse Mortgage could be a possible option to learn about. The reverse mortgage is very commonly misunderstood and often viewed as a “last resort” but what if instead the Reverse Mortgage was used proactively like other financial tools to take advantage of both up and down markets?

What if a Reverse Mortgage could be positioned to potentially grow net worth in retirement?

Jaime and I welcome brainstorming with both you and your financial advisors.

HECM vs HELOC: What are the advantages?

Wed, 08 Mar 2023 13:00:03 GMT

HECM vs HELOC: What are the advantages?

HousingWire recently spoke with Adrian Prieto, SVP of wholesale and third-party relationships at Longbridge Financial, about the advantages of HECMs and how they better serve homeowners aged 62 and older.

https://www.housingwire.com/articles/hecm-vs-heloc-what-are-the-advantages

“ Unlike HELOCs, reverse mortgages and jumbo reverse mortgages are designed specifically to help seniors manage their cash flow. They also offer senior homeowners more flexibility – most notably, through optional monthly mortgage payments ¹ . And with a HECM, seniors cannot be locked into any possible payment spikes. That’s why it’s a much better product for retirees. Unfortunately, many who could benefit from it have never considered it.”

“The HECM program also offers more flexibility as compared to a HELOC. While HELOCs require money to be disbursed as a revolving credit as needed during a designated draw period, HECM offers several options for receiving funds. With a HECM, money can be disbursed either via a one-time lump sum, monthly payment, line of credit – or a combination of these methods. Plus, any unused portion of a line of credit can grow over the life of the loan, which is not the case with a HELOC.

Another advantage of HECMs over HELOCs is that they are less risky in terms of repayment. With a HECM, there is no deadline for paying back the loan. The loan does not become due until the final borrower no longer lives in the home, but they must continue to meet loan terms and use the home as their primary residence. And since a HECM is a non-recourse loan, the borrower and their heirs are not required to pay back more than the value of the home.

With a HELOC, the loan typically becomes due after ten years. However, making interest-only payments or paying the minimum required each month will not pay off the line of credit by the end of the 10-year period. In these cases, the bank may require a balloon payment – a larger, lump-sum payment that covers any remaining balance. This requires the borrower to potentially come up with thousands of dollars at once to eliminate their debt.”

Why You Need to Rethink When to Start Your Social Security Benefits

Mon, 06 Mar 2023 13:00:10 GMT

Why You Need to Rethink When to Start Your Social Security Benefits

A necessary and critical discussion to have with a financial advisor:

When is the best time for you to start Social Security Benefits?

A quote from Ric Edelman a New York Times bestseller and award winning financial advisor:

LINK

“And Congress is making it even more tempting to start receiving benefits just as soon as you can. We all know that the Social Security Trust Fund is being depleted. It'll be gone by 2032. And when that happens, all Social Security benefits are going to be cut 25%.

Congress could fix this problem right now, you know, but it refuses to do so because of the political backlash. Nobody wins elections by cutting Social Security benefits after all. Democrat President Joe Biden and Republican House Speaker Kevin McCarthy have both said that cuts to Social Security are off the table. And frankly, nobody believes them because the only way to avoid cuts is to massively increase taxes, as if that'll go through Congress.

So all this means that everybody's expecting cuts in benefits between now and 2032. And on that basis, shouldn't you start your benefits now? So at least you get your full amount before the cuts occur? Nobody knows the correct answer to that question.

But if you're a financial advisor, you need to run the numbers for your clients who are 62 and older, who haven't yet started their Social Security benefits. Would they be better off starting Social Security now because of the trust fund crisis? Or should they wait until after the Social Security Administration cuts benefits? This calculation will alter the retirement income strategy you recommend for your clients.

Generally, if you are the client or investor, you need to ask a financial advisor to run that calculation for you. Don't try to do it on your own at home. Your advisor uses sophisticated Social Security planning software. Trust me, it's out of your league. Get it right because we're talking hundreds of thousands of dollars over the rest of your life. That will have a huge impact on your financial future.”

Key Differences Between Conventional and Reverse Mortgages

Fri, 03 Mar 2023 19:17:08 GMT

Key Differences Between Conventional and Reverse Mortgages

Every borrower has different goals in retirement. What makes logical sense for the type of loan one borrower chooses may make absolutely zero sense for another. Understanding the pros and cons of all options is critical in order to make the best possible decision to accomplish the goals.

Finance of America compares a Traditional Mortgage vs. a Reverse Mortgage

https://www.far.com/seniority/traditional-vs-reverse-mortgage-a-comparison/

“Key Differences Between Conventional and Reverse Mortgages

Looking at features of the two loan types side by side can help borrowers understand how they differ from one another.

Reverse mortgage borrowers don’t make required monthly mortgage payments. However, they are still responsible for all property taxes, insurance, and other fees and dues associated with homeownership (i.e., HOA dues).”

HECM moving from LIBOR index to SOFR index

Fri, 03 Mar 2023 18:24:42 GMT

HECM moving from LIBOR index to SOFR index

For many years, the Home Equity Conversion Mortgage (Reverse Mortgage) has used the LIBOR Index for adjustable-rate loans. The Libor Index will stop being published after June 30, 2023 and a replacement index, the Secured Overnight Financing Rate (SOFR), will take its place.

LINK

A quote from Reverse Mortgage Daily about the Recent History of LIBOR transitioning to SOFR,

“In 2014, the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (ARRC) to identify best practices for alternative rates and develop an implementation plan.

In mid-2019, the Ginnie Mae SVP in the Office of the President at the time, Michael Drayne, told reverse mortgage industry participants that the timing of a new rate index was a complex issue. In terms of HECM-backed Securities (HMBS), two alternative rates emerged as potential replacements: SOFR and the Constant Maturity Treasury (CMT) index. However, the majority of the reverse mortgage industry preferred SOFR due to its widespread use in financial services.

In September 2020, Ginnie Mae announced new restrictions on HMBS eligibility for adjustable rate loans operating off of the LIBOR index, which was effective for all issuances dated on or after January 1, 2021 — an announcement that came nearly a year prior to the planned move away from LIBOR. Action on a new reverse mortgage rate index had been tied to December 2021, and the September 2020 announcement caught many by surprise.

The decision regarding a new index for the reverse mortgage program rested with the FHA, however, and the industry waited several months to hear which direction the agency would go. ML 2021-08 announced that the HECM program move from the LIBOR index for adjustable-rate HECMs to SOFR.

The proposed version of the rule arrived in October of 2022, and NRMLA drew attention to reverse mortgage industry issues in a letter to FHA sent to the agency the following month. Concerns raised by the association are addressed in the final rule, NRMLA said in a member alert.”

How much does the average American 60-year-old have in retirement savings?

chishomeloans@outlook.com (Jaime Chis) — Wed, 22 Feb 2023 19:51:16 GMT

How much does the average American 60-year-old have in retirement savings?

LINK

“Research by the Federal Reserve shows that an astounding one in four Americans (including the 27% who consider themselves retired) have absolutely nothing saved.”

“A Vanguard study found those between 55 and 64 held an average of roughly $256,000. But this includes high income earners ; breaking the figures down, it shrinks to a median of about $90,000.”

“So if you’re a 60-year-old American and make $50,000 per year, that means you should have $400,000 saved in your retirement account.”

Have you ever considered utilizing home equity to fund the retirement life you desire?

Accessing the home equity has both positive and negative tradeoffs with some skewed more negative and others more positive. It all comes down to the borrower’s goals whether taking advantage of home equity will be the best option or not. There is no one size fits all in retirement but understanding all the available options will put the retiree in the best possible position.

Please reach out to learn about a Reverse Mortgage so you can decide if it will help you or your family members achieve the desired goals in retirement.

The fastet-growing homeless population? Seniors

Wed, 22 Feb 2023 19:23:40 GMT

The fastest-growing homeless population?

An article for the Orange County Register highlighting the increase of Seniors becoming homeless. Link

“California accounts for about a third of the nation’s homeless people , and among this population, seniors are estimated to be the fastest-growing group. One key indicator is the state’s tally of people accessing homelessness services. From 2017 to 2021, California’s overall senior population grew by 7% but the number of people 55 and over who sought homelessness services increased 84% — more than any other age group — according to the state’s Homeless Data Integration System .”

“Those at increased risk of losing shelter tend to be older adults who live alone and on fixed incomes, with little to no savings. A main contributor, experts say, is that as California rents soar, seniors’ income streams, including Social Security benefits and Supplemental Security Income, have not kept up .”

“There is no medicine as powerful as housing,” Dr. Margot Kushel of UC San Francisco’s Benioff Homelessness and Housing Initiative said.

The bottom line is the Reverse Mortgage can be used as a proactive financial tool to protect homeowners against the rising costs of rents and preserve there standard of living in the senior years.

HELOC VS HECM

Fri, 17 Feb 2023 19:44:44 GMT

What's The Difference?

Senior Housing Wealth at Record Level

Wed, 25 Jan 2023 20:04:32 GMT

Senior housing wealth at record level!

Wow! Senior housing wealth at record level!

( Link to Article )

The data is in! In Q3 of 2022 homeowners over age 62 hold a record amount of home equity, $11.8 trillion. Congratulations!

Have you ever discussed with your financial advisor about a reverse mortgage?

What are the pros and cons they see with a reverse mortgage regarding your specific goals?

How does the reverse mortgage compare to other options in protecting or even growing wealth?

What if the dollar continues to lose purchasing power but the cost of living keeps going up?

What if retirement investments stop producing desired returns?

A lot of what if questions.

Please take the time to understand all your options, especially while home equity is at an all time high. If home equity decreases some options might get more limited.

Our team is ready to answer all questions.

Is paying off your Mortgage the best option?

Mon, 23 Jan 2023 20:07:54 GMT

Is paying off your Mortgage the best option?

Is paying off your mortgage the best option?

It depends.

Everyone has different goals and needs in retirement. There is no one size fits all solution.

The value of an educated, trusted inner circle who understands the full desired retirement picture can significantly increase the chances of a peaceful, exciting and rewarding golden years.

A quick and thought provoking read by Terri Williams, “Mortgage Paid: Sell or Stay?” ( LINK ) highlights potential reasons for selling the home or choosing to age in place.

The good news regarding a reverse mortgage is the homeowner always maintains the right to sell the home whenever the time is right and has the option to pay on the loan balance at any time. This is a drastic difference from a traditional loan that requires non-negotiable monthly payments.

The requirements of a reverse mortgage are simple:

Continue to pay property taxes and home insurance.
Continue to maintain the home.
The home must be the primary residence.

For some selling the home is the best path, but for others it is staying surrounded by all the memories of the home over the years.

Please give my team a call so you know exactly how a reverse mortgage works and then can decide if it should or should not be part of the retirement plan.

How to Deduct Mortgage Points on Your Tax Return

Mon, 12 Dec 2022 19:57:24 GMT

How to Deduct Mortgage Points on Your Tax Return

TurboTax experts break down what mortgage points are and how to potentially qualify for a tax deduction with them,

“ What are mortgage points?

One home mortgage point is equal to one percent of the amount of your loan. For example, if you have a $100,000 home loan, one point is the equivalent of $1,000. The home mortgage industry typically uses two types of points, origination points and discount points. Origination points are typically income for the loan originator, while discount points are a type of prepaid interest and are often fully deductible.

Qualifying for a deduction

Generally, the Internal Revenue Service (IRS) allows you to deduct the full amount of your points in the year you pay them. If the amount you borrow to buy your home exceeds $750,000 million ($1M for mortgages originated before December 15, 2017), you are generally limited on the amount of points that you can deduct. The IRS also imposes the following requirements to deduct mortgage points:

The mortgage must be used to buy or build your primary residence
The points must be a percentage of your mortgage amount
The use of points must be a normal business practice in your area
The amount of points paid must not be excessive for your area
You must use cash accounting on your taxes
The points must not be used for items that are typically stand-alone fees, such as property taxes
You cannot have borrowed the funds to pay for the points from the mortgage lender or broker
The amount you pay must be clearly itemized as points on your loan documents

If you aren't able to deduct your points in the year you pay them, you may still qualify to deduct them over the life of the loan.

How to Deduct Points

As far as filing taxes goes, claiming a tax deduction for mortgage points is a fairly straightforward process. Mortgage points are considered an itemized deduction and are claimed on Schedule A of Form 1040 . Here are the specifics:

Usually, your lender will send you Form 1098, showing how much you paid in mortgage points and mortgage interest during the year
Transfer this amount to line 8a of Form 1040 Schedule A
If any of your points were not included on Form 1098, enter the additional amount you paid on line 8c of Form 1040 Schedule A

For many taxpayers, the process really is this simple. In some cases, though, calculating and deducting mortgage points can be tricky. With TurboTax, just answer a few simple questions and we can help you get the proper deduction for your mortgage points.”

Tax Free Money- IRS Approved

chishomeloans@outlook.com (Jaime Chis) — Thu, 08 Dec 2022 20:55:11 GMT

Tax Free Money- IRS Approved!

A quote directly from the IRS in the frequently asked questions of their website,

“Question

Are the proceeds I receive from a reverse mortgage taxable to me?

Answer

No, reverse mortgage payments aren't taxable. Reverse mortgage payments are considered loan proceeds and not income. The lender pays you, the borrower, loan proceeds (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home.

With a reverse mortgage, you retain title to your home.
Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die.
Interest (including original issue discount) accrued on a reverse mortgage isn't deductible until you actually pay it (usually when you pay off the loan in full). Also, a deduction of interest may be limited because a reverse mortgage generally is subject to the limit on home equity debt, which is not deductible unless the proceeds are used to buy, build, or substantially improve the home that secures the loan. For information on deducting mortgage interest and the debt limit that applies, see Publication 936, Home Mortgage Interest Deduction .”

Link

Retirement Crisis

Wed, 23 Nov 2022 21:54:43 GMT

Retirement Crisis

Link to Article

CEO of TIAA Thasunda Brown Duckett, who oversees some $1.2 trillion of retirement assets for healthcare systems, colleges and nonprofits points out “…there’s a $4 trillion retirement-income gap. That means 40% of Americans run the risk of running out of money in retirement.”

Where do you plan to pull needed retirement income from?

Social Security
Pension
Annuities
IRA/401k
Stocks/Bonds/Mutual Funds
Savings
Part-Time Work
Real Estate

Are you confident in the event of a recession/continued high inflation that you have the necessary income to sustain and enjoy the quality of life you want?

NOW IS THE TIME TO LOOK AT ALL ALTERNATIVES

A lot Can Happen in 2 Years

Wed, 02 Nov 2022 20:19:47 GMT

A lot Can Happen in 2 Years

Charlie Bilello Twitter post on 10/27/22: https://twitter.com/charliebilello/status/1585634956751273985

“2 years ago: 30-yr mortgage rate was 2.80% & average new home price in the US was $395k.

Today: 30-yr mortgage rate is 7.08% & average new home price is $518k.

Result: $25k increase in down payment (assuming 20% down) & 114% increase in monthly payment (from $1,298 to $2,779).”

What do you think will happen in the next two years?

Age in Place

chishomeloans@outlook.com (Jaime Chis) — Mon, 24 Oct 2022 20:00:53 GMT

Age in Place

A May 2022 survey from AAG, the leading Reverse Mortgage lender in the country (think Tom Selleck commercials) found,

“Roughly three in four adult children want their parents to age in the comfort of their own home. 74% of Gen X adult children said they would prefer to see their parents live their later years in their own home rather than at an assisted living facility. *

*Reverse mortgage borrowers must continue to pay taxes, insurance, maintain the home and otherwise comply with loan terms.
Over half of Gen X adult children in the US would not have the money to care for their senior parents if a situation required their help. 55% of adult children said they are not financially prepared to care for their parents in a time of need.
44% of adult children are not emotionally prepared to care for their parents during their later years.
Half of Gen X adult children in the U.S. do not know how much debt their parents have amassed. 50% of adult children said they are not aware of how much debt their parents currently have.
Over half of Gen X adult children believe that their parents' home equity could be a financial solution. 60% of adult children said they are in favor of their parents using their home equity to fund their later years.
Over three-fourths of parents have never spoken to their Gen X children about using their home equity to fund retirement. 76% of adult children said they have never discussed, with their parents, utilizing home equity to fund their retirement years.”

My ask is to speak with adult children about the pros and cons of a Reverse Mortgage for their parents’ retirement.

Link to Article

Keep it Simple, Rethink Reverse

Mon, 17 Oct 2022 17:43:13 GMT

The Reverse Mortgage is Every Product in One

If you want to make a payment, you can.

If you just want to pay an interest payment, you can.

If you don't want to make any payment, you don't have too.

The Borrower is in full control of when and how they want to pay the loan back.

A Refi wave is years away as mortgage rates settle at 7%

Thu, 13 Oct 2022 20:18:30 GMT

A Refi wave is years away as mortgage rates settle at 7%

The article, “A refi wave is years away as mortgage rates settle at 7%” by Flavia Furlan Nunes of HousingWire describes the potential outlook of future interest rates.

“…When will the tightening stop?

Surging mortgage rates reflect the Federal Reserve’s tightening monetary policy to control increasing inflation. The Consumer Price Index released Thursday increased 0.4% in September and 8.2% over the last 12 months, far hotter than expected.

So far this year, the Fed has increased the federal funds rate by 300 basis points.

Treasury yields show higher rates in the short term, signaling a recession on the horizon. The 2-year note, closely tied to the Fed’s interest rate moves , increased five bps to 4.28% on Wednesday from the prior week. The 10-year note went from 3.83% to 3.91% in the same period.

Looking forward, another 125 basis points in federal funds rate hikes are still expected to come in 2022, with the rate topping out well above 4%. After that, analysts are unsure whether rates will remain high or gradually come down.

“If the Fed front-loads rate hikes and then gradually brings rates back down (which we think is the most likely outcome), it will likely be multiple years before rates are low enough to spur meaningful refinance activity,” the KBW analysts’ team wrote.”

Source

Want to Learn about Reverse Mortgage?

Mon, 10 Oct 2022 17:56:54 GMT

Want to Learn about Reverse Mortgage?

Wade D Pfau’s book, “Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement (The Retirement Researcher Guide Series)” is an eye opening read about not only teaching how reverse mortgages work but also how a reverse mortgage may be used as an important financial tool to secure the required funds to live the life you want in retirement.

Link to his book on Amazon

Quote from Wade D Pfau about his book,

“Reverse mortgages are an important retirement planning tool. This book provides an up-to-date understanding about reverse mortgages and how to use them as part of a complete and responsible retirement plan.

I am a professor of retirement income. I may be the only author of a reverse mortgage book who does not work within the reverse mortgage industry. My focus is on finding ways to build strong retirement plans, and this is the perspective I bring to reverse mortgages.

I know that reverse mortgages can look expensive in isolation. But reverse mortgages should not be viewed that way. We need to focus on their overall contribution and interactions with other retirement assets as well.

Retirement is different from what people are accustomed to when working. Risks change. Retirees must sustain spending while not knowing how long their funds need to last, while managing the risks of a market downturn that can permanently derail a retirement portfolio, and while also being ready to manage unexpected spending surprises.

Reverse mortgages can help to manage these retirement risks by providing an additional resource to support spending and to coordinate with other investments assets.

My overarching interest is in building efficient retirement income plans to support the most spending potential for assets, both during life and as a legacy for the next generation. I demonstrate with case studies how reverse mortgages can contribute to better retirement outcomes in numerous ways:

- Coordinate between spending from the investment portfolio and from the reverse mortgage to better protect investments from market volatility

- Avoid the additional burden of fixed mortgage payments in retirement by refinancing a traditional mortgage with a reverse mortgage

- Pay for home renovations to help you comfortably age in place with the home you love

- Build a bridge to support getting the most lifetime value from Social Security benefits

- Use the reverse mortgage as a tax-free spending resource to better manage your taxable income

- Use the growing line of credit as a protective hedge for your home value or as a source of reserves to cover unexpected spending needs

This book provides the basics for how reverse mortgages work, why they work better when interest rates are low (unlike every other retirement tool), what their growing line of credit means, and how they help to manage investment volatility.

Reverse mortgages---when used correctly---can provide an added layer of security for retirees by creating flexibility for their assets. Opening a reverse mortgage earlier in retirement and using it in a thoughtful manner is generally more effective that treating it only as a last resort option.

Those who understand whether and how to fit a reverse mortgage into their retirement plan will have an important edge in achieving a financially secure retirement. This book shows you how.”

Part 2 Using the Reverse Mortgage as an Inflation Hedge

chishomeloans@outlook.com (Jaime Chis) — Thu, 29 Sep 2022 17:17:31 GMT

Part 2 Using the Reverse Mortgage as an Inflation Hedge

Eye opening article from Chris Clow at Reverse Mortgage Daily with how the Reverse Mortgage can give borrowers more financial options through accessing trapped equity in the home.

Inflation is at its highest level in 40 years, 8.2%. Sadly, wages, social security and pension payments have not increased to offset the loss in buying power. Our dollars are going less far.

Omar Ennabe explains, “In retirement, people typically have a set amount of dollars they can spend per month and rarely do cost of living adjustments on pensions or SSI keep up with the true cost increase of goods and services. When I discuss inflation with our clients, I advise them to always prepare for the certainty of uncertainty and to be ready for the worst-case scenario. For this reason, I counsel them to give themselves more options and greater flexibility when thinking about a mortgage product that fits their needs/wants. One of the reasons I love the reverse so much is precisely this reason. The reverse mortgage is really every product in one. If you want to pay off the loan in 30 years, you can do that with a reverse. If you want to pay it in 10, you can do that with a reverse. If you want to send in just the interest only, you can do that with a reverse. And if you don’t or can’t send in a payment for whatever reason, that’s fine also.”

https://reversemortgagedaily.com/articles/tips-about-handling-inflation-conversations-from-reverse-mortgage-division-leads/

Using the Reverse Mortgage as an Inflation Hedge Part 1

Thu, 29 Sep 2022 17:11:44 GMT

Using the Reverse Mortgage as an Inflation Hedge

Eye opening article from Chris Clow at Reverse Mortgage Daily with how the Reverse Mortgage can give borrowers more financial options through accessing trapped equity in the home.

Inflation is at its highest level in 40 years, 8.2%. Sadly, wages, social security and pension payments have not increased to offset the loss in buying power. Our dollars are going less far.

Steven Sless explains, “…clients are referred to us by a financial professional seeking to preserve their assets under management and to create a hedge for their clients against rising inflation. We [also] teach them about the power of creating a buffer asset using reverse mortgage funds. As a recent Bloomberg article pointed out, America has a $7 trillion retirement crisis. Yet, as pointed out in this January 2022 RMD article , home equity levels for homeowners 62 and over has topped $10 trillion. Clearly, for most of our prospective clients, the home is where the wealth is. It’s their most powerful weapon to fight off rising inflation and there is no better tool to accomplish this than a reverse mortgage.”

https://reversemortgagedaily.com/articles/tips-about-handling-inflation-conversations-from-reverse-mortgage-division-leads/

Managing the Cost of Healthcare in Retirement

Wed, 21 Sep 2022 16:49:05 GMT

Managing the Cost of Healthcare in Retirement

Great 4 minute read from Finance of America about the importance of correctly planning for future healthcare costs.

64 million people are currently enrolled in Medicare, but Medicare does not cover all potential expenses for healthcare in retirement.

Important costs to consider depending on individual needs:

Supplemental Insurance
Long Term Care Insurance
Assisted Living
In Home Care

With a Health Savings Account (HSA) consumers can take advantage of tax-free funds to pay for qualified healthcare bills.

https://www.far.com/blog/cost-of-healthcare-in-retirement/

Longevity in Retirement

Tue, 30 Aug 2022 20:55:02 GMT

Longevity in Retirement

Great article from Ric Edelman the #1 independent Financial Advisor in the Nation 3 times, ranked by Barron’s.

“2. Longevity will change the way we approach retirement.

If we're going to live to age 100, the notion of retirement at 65 is impossible.

Economically, most people will never afford to be able to do a 40-year retirement.

Second, you're not going to want to. At 65, you're going to be healthier than your parents were when they were 65. In fact, due to medical innovations, by the time you're 95, you'll be healthier than when your grandparents were 55. And so, you're going to want to be active and contribute to society. And you're going to need to make money at the same time.

So this notion of “retirement” will be replaced by going to school, going to work, and then going back to school to get new skills, to get more training, to stay viable in the marketplace. And then, you'll take a two or three-year sabbatical—forget about a 2-week vacation—you'll take years’ long sabbaticals, and then you go back to school for more training, go back into the workforce, and the cyclical life of school-work-sabbatical will be how you live until you are age 100.

This requires an entirely new set of thinking about our approach to money and career and college and family in a way that is unprecedented.”

Source: https://www.morningstar.in/posts/69398/retirement-4-ways-longevity-is-going-to-change-everything.aspx

Oil price, an interesting indicator of economy future?

Wed, 17 Aug 2022 16:28:27 GMT

Oil price, an interesting indicator of economy future?

Jeff Ross of Valshire Capital discussing oil price,

"Oil has been on a recent downtrend and probably peaked. Currently rolling over (going down). This is similar to 2008 when the stock market started to decline (currently 20% off high), but the price of oil continued to ramp higher. When oil peaked and then descended it went down very quickly. This causes the floor (bottom) of risk on assets (Bitcoin, equities) to drop. Risk on assets are currently going to crash hard. This will bring disinflation that will bring demand destruction that will reduce overall wealth."

We Have a Situation

chishomeloans@outlook.com (Jaime Chis) — Wed, 10 Aug 2022 13:15:04 GMT

U.S Debt to GDP

U.S.debt to GDP is 130%

Global debt to GDP is 350%

Anthony Pompliano, “The only way to service the debt is to debase the currency so they can pay off the debt with future devalued dollars. Regardless of political party we continue to raise the debt ceiling. We cannot pay back the debt and we are not growing GDP fast enough to service the debt. The incentive is to devalue the currency, to take on more debt and simply keep the game going. The only way to solve these long term problems is to have a first principles solution. We can either increase GDP growth or transition to money not based on debt.

Hope for the best, but prepare for the worst."

https://www.statista.com/chart/1505/americas-debt-ceiling-dilemma/

The Milkshake Theory

chishomeloans@outlook.com (Jaime Chis) — Tue, 09 Aug 2022 16:31:47 GMT

The Milkshake Theory

https://www.youtube.com/watch?v=xxzy3sLs4Bs

James Lavis, the writer behind The Informationist , explained the US dollar currency index (DXY) as the following:

"The USD is currently trading at a 20-year high, according to the DXY index.

As the USD strengthens and other currencies weaken, this puts pressure on countries who have US Dollar denominated liabilities (think payments for oil or energy that are set in USD) or issue US Dollar debt. The weakness of their own currency relative to the US Dollar negatively impacts their ability to meet the obligations or interest payments. Ultimately, it forces certain countries in emerging markets to either print more of their own currency to buy more US Dollars (which eventually leads to hyperinflation) or simply adopt the USD as their base currency.

Let’s say you have a milkshake, and you’re sitting at another table, all the way across the room. Now let’s say I have a straw. A really long straw. So, even though you’re all the way across the room, I can plunk my straw into your milkshake and drink it.

The one doing the drinking, of course, is the US Dollar itself."

Ray Dalio

chishomeloans@outlook.com (Jaime Chis) — Mon, 08 Aug 2022 13:00:01 GMT

Embrace the Pain

Ray Dalio quote,

"If you don't let up on yourself and instead become comfortable always operating with some level of pain, you will evolve at a faster pace. That’s just the way it is.

Every time you confront something painful, you are at a potentially important juncture in your life—you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion. The irony is that if you choose the healthy route, the pain will soon turn into pleasure. The pain is the signal! Like switching from not exercising to exercising, developing the habit of embracing the pain and learning from it will “get you to the other side.” By “getting to the other side,” I mean that you will become hooked on:

- Identifying, accepting, and learning how to deal with your weaknesses,

- Preferring that the people around you be honest with you rather than keep their negative thoughts about you to themselves, and

- Being yourself rather than having to pretend to be strong where you are weak."

The Mirage of the Value of Money

Sat, 06 Aug 2022 13:00:05 GMT

The Value of Money

Valuable 5 minute listen from Charlie Billelo about the Mirage of wealth the last 2 years.

Bilello quote,

"Home values are up, stock portfolios are up, wages are up but it is a mirage because it was all a function of a 40% increase in the money supply. If adjusted for inflation then real wages are actually negative.

People are making more money in nominal terms, but the things being bought cost more.

You can't print your way to prosperity. You have to have innovation, real economic growth over the long term to improve people's well being. Increasing the money supply by 40%, borrowing $6 trillion, and sending it out to people feels good in the short term, but it is a mirage because eventually inflation steeps into the system."

USD Buying Power

chishomeloans@outlook.com (Jaime Chis) — Fri, 05 Aug 2022 13:00:00 GMT

USD

Brett Donnelly of Spectra Markets explains the importance of the difference between nominal and real data.

"There is no direct call to action here other than: When you are consuming economic data from now on, make sure you double check in your head whether it’s nominal or real, and what that means. The government reports most economic data in nominal terms but some data (like GDP) in real terms. It’s not apples to apples so keep that in mind.

This sort of high inflation gives me more sympathy for Austrian views of money as I can see everyone around me kind of becoming de-anchored on the whole real vs. nominal thing. We live in the nominal world, and yet each

member of society lives a unique experience as real wages and purchasing power shrink.

Much of how you experience the real vs. nominal dichotomy is arbitrary and comes down to: how rich you are, whether you’re long or short a primary residence, and whether you have bargaining power with your employer. This inflation is a massive tax on some segments and individuals, and barely noticeable to others. That seems bad to me."

Investing is a game of subjectivity. What are your goals?

Wed, 03 Aug 2022 19:17:29 GMT

Investment Goals

Tory Reiss discussing,

"There is no right or wrong way to invest.

What is right for how and what one person invests in, is different for another.

How you invest depends on your goals.

What are you trying to accomplish? Money is just a tool to achieve your goals".

https://youtu.be/9-6vZ6bCB_Y?t=5748

(timestamped. 2 minute listen)

Why are Mortgage Rates Increasing?

chishomeloans@outlook.com (Jaime Chis) — Mon, 01 Aug 2022 19:46:04 GMT

Mortgage Rates

Investopedia quote, "When the Fed makes it more expensive for banks to borrow by targeting a higher federal funds rate, the banks in turn pass on the higher costs to their customers. Interest rates on consumer borrowing, including mortgage rates, tend to go up."

https://www.investopedia.com/articles/personal-finance/050715/how-federal-reserve-affects-mortgage-rates

Overlay the Fed Funds Rate ( https://fred.stlouisfed.org/series/FEDFUNDS ) with the Federal Debt ( https://fred.stlouisfed.org/series/GFDEBTN ) level since 1980. A perfect inverse correlation. As the debt goes up over time the rate goes down over time.

The Federal government has reached a record debt level ($30 Trillion), so if rates get raised it costs the government more in interest payments. They can not afford to service the debt with higher rates and would then default, which they have never done and must avoid at whatever cost. If the U.S. defaulted then status as world reserve currency would be over.

Do you think rates can sustain at the current levels today? If so, for how long?

New Perspective on Reverse Mortgage

Mon, 01 Aug 2022 19:00:30 GMT

Changing Times

I have been doing reverse mortgages for over 4 years and it is my specialty. I recently recruited my sister to join me in educating families about the benefits of reverse mortgages. We fundamentally believe reverse mortgages put many retirees in the best possible financial position. We can explain how it can be used as a financial tool to protect other investments and prolong money needed for retirement. The fixed income market (bonds) is going to decimate the boomers as the current high inflation diminishes the real return on a bond over time. The value of USD is getting inflated away at 40 years highs. Our personal family is using this strategy.

The reverse mortgage is not a "needs only" or "last resort" option. It is designed to be used proactively as a retirement tool to help supplement savings, investments, SSI, pensions which slowly or drastically get drained in retirement. "When" not "if" the correction in the stock market, real estate market, bond market (already yielding negative returns) comes people need to pull money from other places. You never want to be in a situation where you have to pull from a down investment and therefore can switch to reverse mortgage funds to live on until the markets rebound. The key is to have the reverse mortgage in place before you actually need it because when you need it, it may no longer be an available option.

The known information we have:

· Inflation at 9.1% (40 year high). This hurts people on fixed income most because they have no way to replenish or outpace the loss from inflation unless they go out on the risk curve into speculative investments.

· $30 Trillion federal debt level (all time high)

· $9 Trillion Fed balance sheet (all time high)

· Home prices at all time highs (up 20% year over year)

· Rental prices at all time highs ( up 19% year over year)

Does the data above look sustainable to you? Then add a war on top of it (Russian/Ukraine). A lot of potential for things to get crazy expensive. I am by no means wishing pain for anyone, but we can't put our heads in the sand and hope for the best. Homework needs to be done and preparation to be ready for anything is critical right now.

A great article that was published by Reverse Mortgage Daily: Click Here

Sources:

Consumer Price Index: https://fred.stlouisfed.org/graph/?g=8dGq

Federal Public Debt: https://fred.stlouisfed.org/series/GFDEBTN

Fed Balance Sheet: https://fred.stlouisfed.org/series/WALCL

Year over Year Home Prices: https://www.advisorperspectives.com/dshort/updates/2022/07/26/may-s-p-case-shiller-home-price-index-up-19-8-yoy