0:00 to uh trust and Estates weekly I'm your host Kevin bemel and we are here every Monday at 10:00 a.m. Pacific time to talk about everything related to Estates probate trusts and both from the standpoint of doing your own estate and retirement planning as well as uh for professionals who are helping people do this and so today I'm I'm happy to have a a a a new friend and guest Tom Karens and Tom has been in the real estate
0:36 Mortgage business for I think your your entire career if I'm not mistaken about 35 years altoe okay great 35 years but um more particular to today's episode um hang on one second NOP oh nope that's not what we want to do here something went something went hanky to set us up like this but anyway um so Tom is um a certified reverse mortgage uh professional and he's going to talk about this tool and explain how it can
1:11 be used for the estate planning and retirement process so um you know without any more Ado I'm GNA turn things over to Tom and I'm gonna kind of be the audience here because um unlike other topics that we deal with I have very little knowledge about um estate planning I mean about reverse mortgages and so um I'm I'm I'm very interested to hear uh Tom's uh Tom's presentation so Tom you want you want me to bring up the uh your presentation that would be great and thanks for having me I really appreciate
1:46 the time oh wow uh hang on one second here let's see um oh here we go this is what I'm looking for oh gosh it won't set back to the to the orientation we had before that's so bizarre okay orientation selection not available while live okay well um Tom can you can you see your your presentation well enough yes I I can work with the slides I have so okay um so let's get started and basically the I
2:22 think the subject that we really want to cover is retirement how a person can enhance their retirement and what I like to call self actualize in retirement meaning get all of the things that they want reach their full potential and so that's and how they would do that one of the elements that they can do is by positioning their uh their their real property assets um and using those to help in the process of uh getting a good retirement so I wanted to talk a little bit about myself first and then look at retirement
2:57 and the challenges of retirement and then uh retirement planning with with real property common strategies uh how to create happiness and security and retirement and then finally talk about self-actualization so okay um so a little bit about me uh I've have 35 years as a licensed mortgage broker and real estate broker um I'm the broker of record for Square One Financial and I also am a certified reverse mortgage professional or crmp uh which is a designation that the
3:33 national reverse mortgage lenders Association confers on people who uh do the education pass the test and and do the work and um uh so there's approximately a little bit over 200 people in the country that have that designation I'm one of them and then I'm a member uh and I'm the director a director of the tri valley estate and planning Council so and I show a picture of another Tom because he's been very active in uh the advertisement for reverse mortgages but I can tell you that I know a lot more
4:09 about retirement than he does so Tom celic was is a longtime client of uh somebody I know and and and he supposedly he's a really nice guy but but I I wouldn't imagine he knows anything like the amount about reverse mortgages that you do so probably not he's welome to come on if he'd like to but okay good anyway so so in the next slide Uh Kevin we'll talk a little bit about you know how what retirement is right and are you actually prepared for it and I saw this thing one time I
4:44 thought it resonated pretty well um talk about the different phases of retirement the pre-retirement phase probably in your 50s early 60s where you're working hard to accumulate to be ready for retirement then they call the retirement honeymoon phase when you actually do it and you think oh my God this is great why did I keep working all those years then the disenchantment phase that comes in afterwards because it's like okay yeah this is great but am I really going to be able to sustain this am i g to really be able to do it over the period of time and then uh finally you enter
5:19 the reorientation phase where you start to think okay what do I really have to do uh to make retirement work for me and then finally the stability pH where you get it all taken care of because you follow some of these things and uh and it starts to work for you so on the next slide um talks a little bit about what is self-actualization and basically it's just realizing your uh potentials right uh fulfilling the the things that you can do with your talents and your desires and the process of becoming
5:56 everything that you're capable of becoming so um anyway so on the next slide let's talk about something a little bit less fun which is the risks of retirement and you can see there's a fairly long line of risks here of things that affect all of us and by no means are these all of them but a lot of the ones listed here are uh health and financial related so long-term care the the risk of your health in general Med medical
6:33 insurance premiums um you have things such as uh Financial elder abuse the fact that you'll become frail the fact that you'll eventually you know probably either suffers the loss of a spouse or that your spouse will suffer the loss if if you happen to have one right so all of these risks are things that people are facing in retirement and the question is how do you deal with them right because because how do you get to self-actualize if you can't deal with these risks and then another uh thing that I thought was
7:09 really important to touch upon is you know uh it says how there's a boomer head towards hardship and retirement but this would be for anybody you know some behaviors that will really cause you uh cause a problem with your self-actualizing your retirement uh you know carrying a too high a balance on credit cards uh taking your Social Security too early selling Investments you know when the market drops paying too much in housing cost you you can see them all here and these
7:45 are also things that can stand in the way of your uh you know gaining the retirement that you really want and so obviously the question will become how do we how do we de deal with those right right so um so the next I can interject it seems like some of them can be um more more effectively mitigated than others so for example long-term care risk right we could we can we can get long-term care insurance um on the other hand um you know public policy risk there's not a
8:22 whole lot we can do to to mitigate that right we don't have control over public policy um and so we're going to be subjected to that um just just as a matter of course does that seem like uh yes I would agree with you but I would add one other thing even the ones that you feel like you can't control having a stable and properly designed financial situation can help you deal with those and make it you know make it more easy
8:57 and more enjoyable for for you to go through those so that's one thing I would say that sure you know that's part of you know what we're really looking at so um so anyway so the part of it that I really wanted to touch upon today is retirement planning with real property and so if you could go to the next slide actually um and then um oh actually okay so that's the Boomer slide so next slide now is retirement planning with real
9:32 property um and so and actually you C you can go to the next slide after that so in my mind when you're talking about how you position your real property to help yourself with your retirement the biggest question facing anybody and the most important this you know number one decision is where do you want to live you know the remaining time of your your life right so for example do you do you want to stay at your home do you want to age in place and is your house an
10:09 appropriate place to do that is it where you want it to be is it set up how you want it to be does it allow for you to uh you know does it does it uh allow for you to continue to get older and and more frail and and still be able to live in the house and take care of it can you finally afford it I mean there's a lot of different questions but that's you know one thing or do you want to downsize to a more appropriate property do you want to either purchase or rent um and then a third choice would be to
10:45 move into a senior housing community right or and there are different uh communities uh that get progressively more care or oriented right starting with just over 55 communities such as Rossmore up here in Northern California uh uh Laguna Woods I think is a big one down in Southern California but then also can progress to more like assisted living homes and then finally uh you know 24-hour Care Facility right
11:20 so so do you want to live in a senior housing community or do you have the ability to move in with family or have family move in with you so either by the use of an Adu and their property or yours um and so those this is a really Central thing because this in my mind will really shape your retirement and to the extent that you can answer this question and know that that's what you want to do I think that's a really important Point uh you know to the whole
11:58 process MH so um we can go to the next slide which I think is going to be a little bit difficult for everybody to read but basically the point of the slide is and the point of the effort is what you know what are your current plans right and we just touched on some of those can you meet your monthly expenses and have a little left over uh you know does your home meet your current needs in terms of future security do you think you'll be able to maintain your current standard of living longterm at your home uh would
12:35 an unexpected home or health expense take you off track so these issues of security are you going to be able to live where you are or do you need to make that change like going back to the previous don't go back but you know thinking back to the previous slide you know which are those choices and then also um you know you know in terms of the theme of self-actualizing you know connection accomplishment and growth because one of the things that we know is that longevity is not necessarily tied to who
13:12 has the most money or who you know has the most toys or whatever but it does have a lot to do with who has the best social network who is among the people that they want to be with with people that are willing to help them with people that are willing to socialize with them um you know and does that keep you intellectually active right with your age and and uh you know so forth and so on so that's a really important part of that decision as well and then finally you know the actual self-actualization of retirement where
13:48 do you see yourself in five 10 15 years uh do you feel good about your future and you know what are your goals and what's most exciting to you about your retirement so you might ask what's all this have to do with reverse mortgages right but you know this is the framework of of how you're going to try to help um improve your financial situation so these are all things that I think that are really important to talk about and now to the next
14:25 slide if I can just inter interject here real quickly so I I think you bring up a an extremely important point and and I I remember now that you raised the issue I wrote a blog post about this many years ago probably 10 years ago when we think of assets and assets for retirement we generally think of real estate Financial assets those kind of things but the most valuable asset we can have are the relationships that we've built um and and and that that is going to have more of a direct impact on the quality of our
15:01 life really even before retirement um this this is an issue I I talk to my daughter about um on on a regular basis and and um I think we sometimes we get kind of tunnel focused in terms of which assets are most important but uh but but yeah I'm I'm I'm really glad that you emphasize the idea of relationships so well yeah and and you know this kind of goes you know one is dependent on the other right because you know the the type the framework that you have for
15:36 your home the framework that you have for your finances the framework that you have for you know where you want to live how you want to live that's going to affect you know who your social network is and likewise who your social network is is going to affect how well you know how happy you are and how well you do no matter how your finances are right so so they're very important things uh that kind of interact and it's just um and that's part of what's really in some ways very exciting about this topic because I it is a way that a lot of
16:12 people haven't thought of I mean one of the things that was really interesting was I don't really put a lot of stock in people like Susie Orman and uh Dave Ramsey and those guys because I think that's kind of like McDonald's Financial advice right a quarter pounder for everybody and that's all there is to it but but I was listening to her one time Susie Orman and she started talking to this person and um she was talking about well yeah your parents you know they had a pension and they had uh this whole backup and you don't have that anymore and so your whole financial thing is
16:48 totally different and the thought crossed my mind at that point well yeah that you know that was very true even for my parents but the other side of it was that my parents didn't own a home that was worth a million and a half dollars either right A lot of people in our audience may very well do right or 900,000 or two million or whatever and so in some ways that's kind of adjusts the position right it's it yeah we don't have the pensions anymore but you know show me the people that had those kinds of uh housing assets back then so that
17:24 that's why a housing asset and I always you know one of the things that made think of is maybe your house is your pension right right that's that is interesting because i' I've talked about that the the the de demise of you know defined benefit pensions has really changed how people look at and can retire but but you're right people with defined benefit pensions rarely had the kind of equity cumulated in a house that that people do today so right so so let's go to the next slide and let's
18:00 talk about the three ways to access home equity right so one way to do that is to sell your house and move and and the thought process being that perhaps you will you know gain some some money right that maybe the cost of where you go to will be less than the cost of um of what you're buying and one of the things that uh so so that's one way to do it right and uh downsize and either purchase or rent um from a cost standpoint it cost you about 10% and also the other thing that you're giving
18:36 up is that in the tax code if you sell your house now you you pay capital gains based on the rules right the first 250 or 500,000 are are could potentially be taxfree but then after that any gain is taxed at capital gains rate whereas if your heirs inherit your house they get a stepped up basis in the house and when they sell it or live in it then their tax basis starts from the much higher thing so that gain is all erased so that's another you know just something
19:11 to consider when you're trying to decide whether selling and moving is the uh is the right thing and by the way there is a reverse mortgage for for purchasing a house and we can talk a little bit about that in a few minutes sure uh second way is a traditional home equity line or loan right so the uh thing about that is is that um what's good about a home equity line or loan is that you only pay interest on the amount of the money you actually use so it can be a good thing to have a line available not use it unless you have to but two negatives of
19:48 that is that one monthly repayments are required so once you have a balance you have to make a payment every month and the other thing is is that draw period are really limited typically to five to 10 probably 10 years is the most common one where you can access the money for 10 years but then it converts to a fixed rate loan after that that you have to pay back usually on a 20-year amortization and the other thing is is that a credit line can always be as we learned in 2008 the financial institutions can decide to either cap
20:23 them or shut them down um if they feel that there's a risk to them MH so a third way for for a person who's over 62 is a home equity conversion mortgage and that's designed specifically for people that as I said over 62 and the Really shining thing about it is is that no uh monthly payment is required right so that's a really important thing there are adjustable and fixed rate options and the loan is FHA insured so a couple of characteristics that the FJ insur uh
21:03 Insurance brings in is that one it's a non-recourse loan so the person can never be charged for the loan balance it it's it can never be it it's only secured by the house um and also uh it you know the FHA insurance uh even if the balance of the loan goes higher than the value of the house um the FHA insurance takes care of that loss not the again not the person not The Heirs so in a lot of ways it's it's a lot more safe of a loan than than
21:40 the other alternative of a um of a credit line as you'll see so we can go to the next slide and let's talk about the reasons why somebody would possibly want to do a reverse mortgage um mortgage payment cancellation is the probably the biggest one so if you get a revers mortgage you're not required to make a payment you can make a payment if you choose to do it but you're not required to do that and yes of course the interest gets added on to the balance and the balance
22:16 can increase um that that is you know possibility of that but nevertheless no matter what happens once you have it in place you do not have to make a payment uh so another reason why people want to do it is that it gives them an ability to age in place right because because they can access capital and they can use it to foil some of those risks that we talked about or some of those behaviors that we talked about that get in the way of self-actualizing their retirement so that's another reason also
22:52 people use it as Reserve funds for repairs expenses contingencies you can use the funds for debt consolidation as well you can pay off you know monthly debts and try and get your payments down into a reasonable uh place so those are those are some basic ones for people that would really might need the mortgage but then on top of that there are some other things that it does for people that wouldn't necessarily have to have the mortgage but can use it as a very positive financial planning instrument and that is some for example
23:28 tax planning where you can where it gives you some flexibility with regards to how you take your IRA distributions whether you do or do not use uh Roth conversions and you can use it as kind of income replacement in situations where you can Advantage yourself because one of the things about the proceeds from a reverse mortgage that is that they're not considered ordinary income H so so you can put them in place of uh a situation where you don't want to incur
24:04 income that will raise your taxes but you need money you can utilize the the uh the reverse mortgage for that um it also another thing is it protects retirement assets from sequence of return risk and what that means you know really quickly is if you're if you have assets and the market goes down you're assets of course shrink if you're spending from those assets during that period of time it's much more difficult for those assets to then recover and return back to the value that they were you know when you
24:41 had them to begin with be before the loss so one of the things you can do is utilize the reverse mortgage to protect yourself in times when the assets shrink you can utilize funds from the reverse mortgage um and thus giving the assets uh time to recover um you know in a in a better Market um and then also medical and long-term care expenses you can you can use the pro proceeds for those um you can either purchase a longterm care policy as you as you mentioned earlier
25:16 when we were talking Kevin or you can utilize the funds as a hedge against future expenses because one of the features of a reverse mortgage or at least one type of them is that you can you have it as a credit line and you can have the money sitting and um you know waiting for expenses that you might have another uh reason is is that you can delay and utilizing your Social Security funds until the maximum benefit um you know one of the things is if you start
25:51 spending your uh Social Security or start receiving your Social Security at 62 um you get a certain level it's probably about an 8% per year return on investment if you don't take the money right so so that's something to think about because if you can put off taking your Social Security to a much later age you're earning at least 8% a year annualized over the next you know the rest of your life right and and part of it is do you look at Social Security as just income or do you look at it as a
26:27 retirement insurance benefit right and if you look at it as a retirement insurance benefit then being able to delay taking it really enhances the benefit as well so um you know and then and then another thing that comes up a lot of times is uh you can use it as a reserve for declining Social Security because of the loss of spouse because one of the things that happens is when one spouse dies again if you if you have one um if one spous dies the other person's Social Security gets reduced
27:03 typically because either this you know if both people were receiving Social Security now only one person's receiving it or if only one person was receiving it they get the lower amount right and then also another reason is you can use a reverse mortgage to purchase a new home that better suits you as well and so those are all reasons why somebody might use a reverse mortgage so we go to the next slide who's eligible for this well you know people that are 62 years or older
27:38 there are some private reverse mortgage products that allow people uh as young as 55 to access them but we're really not talking about those in this presentation we could do those in another one you have to live in your home as your principal residents and you have to be able to pay the property taxes uh insurance and HOA dues on the property so that's really who this who can access this money as anybody and you and you do have to minimally qualify income wise to be able to pay the property taxes insurance and HOA
28:14 dues what if you um what if you live in a duplex and let's say you live in one unit and rent out the other one would you still be eligible yes yes absolutely one to four units as long as you uh live the property okay so that's a really good question and that's that is a a uh method that some people use to create income right is they do buy a four unit or three unit or property and then and then use the income to to help sustain themselves in retirement right right so uh how do you
28:49 receive your money so a couple of different ways you can get all your money that that you qualify for as a lumpsum at closing and that's typically if you do the fixed rate product and contrary to the way the mortgage Market is and forward mortgages most people do not choose to do the fixed rate uh loan and you'll see why in a couple of minutes um but but anyway if you do a fixed rate loan you get all the money all at once a line of credit it allows
29:24 you to draw funds at your discretion right so that you can um you can actually take the funds you know whenever you want you just access them just as you would with any credit line then there's also a 10-year payment which is equal monthly installments for as long as you live in the home um or any combination of the above and also there's another one that I left out on the slide that's called the term where you say for a certain period of time I want a certain amount of money so those
29:59 are all different ways and you can combine you know those last three together or separately or whatever so there's a lot of flexibility in terms of how you receive the funds so let's go to the next slide now another interesting thing and you know we were just talking about or I was just talking about why um somebody most people choose to do the adjustable and that is because of another feature of the line of credit unlike a regular line of credit where you get a certain amount and that's what you have this line of credit actually grows per
30:35 year by the interest rate of the mortgage so if you're paying 6% or 8% let's let's call it 8% if you're paying 8% on the interest on this money and again and an adjustable you only pay on the amount that you actually utilize or spend mhm the rest of the money that's sitting in the credit line will grow at an amount of the same interest rate of 8% now that does not mean you're earning money on it you are not but what
31:11 you are earning is access to your Capital right so so if your say your credit line balance is 200,000 um and then you your rate is 8% at the end of the year if you don't access any of that money your credit line balance would be more like 216,000 and and that can grow every year regardless of what happens to the value of your home by the way so even if your home value were to drop you your line of credit still grows right because again
31:46 go back to the insurance um that will um that will uh you know access the uh um that will protect protect any loss that we have in um you know in in the uh oh the FHA insurance right it'll protect the lender from from a lost lender and it also the person because there's no recourse on this loan at all right right so just the thing to get out of this is your line of credit Will can increase per year on the amount that you don't spend so a lot of times people will get
32:21 the long not draw any money or draw very little money at the beginning and then allow it to grow um you know for the future right because as you can see you know from the slide I mean it it can double in you know a fairly short Peri well call relatively short period of time right so so that's another reason why people really like the adjustable and then go ahead I'm sorry do the increases um so let's just say the first year it was you
32:56 know 200 100 and then it increases to 216 do the increases are there increases on the increases in other words you get 8% of the 216 the next that's your balance right it's eight% of your balance on an ongoing basis right okay wow so the rule of 72 would apply in theory yes that's right yeah fantastic so let's go to the next slide um and just talk about equity for a second because another part of it is everybody always focuses on oh my balance is going to go up I'm losing all
33:31 My Equity I'm not going to um you know this loan's going to end up there'll be nothing left you know people say a lot of those kinds of things but in fact if you really look at the possibilities depending on how you manage it um you can have very uh positive outcomes with regards to and if you look at the graph the purple is the uh balance of the loone the uh the aqua is the property value and the E and the equity is how much you have in the home is the green
34:06 and as you can see they're all increasing right so I mean if you have a fairly stable uh increase of value say you know usually in presentations we use anywhere from four to 6% which you know over the last 20 to 30 years is probably pretty good if you didn't have to measure it in 2009 right but you know for the most part the average of that over the period of time you know 4% is fairly reasonable and you can see that yes your loan balance is increasing but also your Equity can
34:44 potentially increase and the value of your property you know hopefully will increase as well so we can go to the next slide um and then let's talk about what happens later so as this goes on if you if you get the loan uh you can remain in your home for as long as you occupy it as your principal residents and you pay your property taxes and insurance without making a payment so that's like feature number one right you can also choose to make payments on the principal and or the interest but you're
35:20 not obligated to do so and when you cease to occupy the your home or your heirs if you are deceased can choose one of these three options right um You can either pay off the mortgage and retain the home you can sell the home and pay off the mortgage with the proceeds of the sale and keep whatever's left after that or you can return the property to the lender with a deed and lure foreclosure so the important thing to remember about this is is that there's no recourse ever to the borrower or the
35:56 air so nobody is ever going to end up oh my God I owe $50,000 because the reverse mortgage did this the reverse mortgage did that um and you know again just to reiterate remember that the balance increases on the reverse mortgage the value of the property can increase as well now could The Heirs potentially refinance the property to pay off the um the reverse mortgage okay yes and one of the other things to mention really quickly is that they will never
36:31 have to pay more than 95% of the appraised value of the property at the time when they're when they're doing that oh okay so let's say for example the you know the worst happens values go down interest rates go up the mortgage gets to be bigger maybe it's a $600,000 home and the mortgage is now at $800,000 M with a FH heckum the The Heirs can either refinance well refinancing would be would be harder right because the value would be harder but they can pay the
37:07 mortgage or purchase the home at 95% of the current apprais value at the 600 so that's a really good feature as well right so presumably they could buy the house or they in essence pay off the loan at about roughly 590,000 um and you know perhaps they could you know get a 80% loan on the house and come up with 15 with 15% in cash and right and and they and they would still be able to retain the home right and
37:44 their basis in the home would be at the value that they that they got it at at the time so right and how long after the um the owner passes away way um how for how long after that would The Heirs have to you know pay off the mortgage and or sell the house Etc so um so the short answer to your question is it basically starts with a period of about three months and then uh you can ask for two
38:19 extensions um you can ask for an extension to six months and you can ask for an extension to a year so the you know theoretically and I shouldn't say theoretically because by practice typically you can get that long if your situation dictates it but you know keep in mind that the longer it takes you to do that the the mortgage is still at work right it's still acre um cost and and and you know payments are being not payments are being applied but
38:54 the lack of payments is is in increasing the the U the mortgage balance the mortgage balance right okay interesting and so last slide is uh what's your plan for retirement because that's the really important thing for everybody to know and I would just say one thing this loan can do a lot of different things it cannot do all of them at once right so for the person who really needs the money for de consolidation or really needs the money for income or really needs the money uh
39:32 to fix their home or to stay in it if you're going to use the majority of the money some of the financial planning things we talked about aren't aren't really going to take place other than the fact that no matter what you're not going to have to make the mortgage payment that you would if you utilize the mortgage to do that so that so that's like The Shining again that's feature number one but then all these other things depending on your financial situation um you know if if you have a
40:07 situation where long-term care is your worry or delaying Social Security is your worry or um you know you can use it for those kinds of things what you have to balance um is what's the cost of doing that with this instrument versus the cost of not doing those things right and that's a lot of times you know people don't talk about that as much that's a very important factor as well right is you do have to look at the cost but there are a lot of things and a lot of techniques in the
40:44 financial planning thing where you actually I mean if you just talk about an IRA distribution you know you're paying you know regular tax rates on that right ordinary income rates 20 30% well if it cost you seven or eight% a year to do that perhaps that's a that could be a good decision in certain situations or and another thing that people utilize is there you do get and again this isn't tax advice right so just this is just talking about what is possible but as
41:19 you accumulate as the loan goes on you're accumulating an interest cost if you choose to pay that interest that then can can become a deduction oh a lot of times people use that to do planning with Roth conversions where where they can come up with a certain am you know a certain amount of deductions that shelter the cost of doing those things so there there are a lot of things like that we've just kind of touched on the surface of it and the most important
41:55 point is every person's situation is different right so there isn't the thing that says oh debt is terrible or debt is wonderful it's not about that it's about your situation and how does this affect you and what can you do with it right to help yourself with the aid I would say of financial professionals right you should definitely have a financial planner you should definitely have somebody who understands you know your real estate and how to position it and you know we didn't even talk about rental properties and so forth and so on
42:31 which don't you can't use a reverse mortgage for rental properties but you can use a reverse mortgage to increase your cash flow that can allow you to own more rental properties or as you said you could buy a duplex or a Triplex or a fourplex and and and use utilize the income for that so yeah there's just lots of different things it's a great product used properly ly thought out planned um and it does a lot of good for a lot of people so so one one question because we're we're actually a little
43:06 bit over time here but but I think this is this is important um if somebody already has a mortgage on their home can they still get a reverse mortgage and if so what happens to that existing mortgage so two two answers to that to get the actual reverse mortgage that we're talking about here you would pay off that mortgage so in other words if the person has a property it's worth 800,000 and they have a mortgage of 300,000 they perhaps could qualify for a
43:41 reverse for five 300 would pay off that mortgage and then the the remaining two would be available you know in in Simplicity there is another product out it's proprietary it is a second mortgage and it allows you to get to go behind an existing mortgage so for the person who got the 2% interest rate three or four years ago right who doesn't want to give that up um who sees that as a important thing but also needs help that second mortgage product um
44:17 could come into play it's a fixed rate product and no payments are required as well so you can get this second mortgage and um so say you could borrow 50 100 maybe 150 however much and again you would make no payments on it if you if that's what you chose to do or you could make some payments on it to to keep the the reverse amortization down if you wanted to do that right right anyway interest interesting in both of those cases where you have that that low interest rate you
44:53 may be better off keeping it and and you know yeah that would be a decision and you know and and a lot of this is based on time Factor that's why the slide about the number one question to the extent that you can plan where you want to be and how you want to be there you can make the best decisions then right because you can tailor what you're doing to that one of the worst things you can do is get a reverse mortgage and then sell your house six months or a year later because the cost of doing it versus the time that you have it are you
45:29 know it just it doesn't pencil out there's always other ways to sustain yourself for that period of time so it's more a product for the longer term for somebody who wants to stay in the home or buy another home that they want to stay in and uh to just touch on the and I know we're running short of time but to just touch on the purchase so the purchase can work the same way let's say that you have a property that you want to buy and you're looking around and and you your budget's 400,000 and you can't find anything for 400,000 but you could find something for 600,000 well you can get a reverse
46:06 mortgage for again 40 50% of the purchase price which would then if you have 400,000 you know that would give you enough money to go up and buy the higher property and the features of it are basically the same it can be fixed or adjustable and um you know a lot more people use fixed in that situation because they're getting a finite amount of money for the purchase right but some people use uh adjustable as well interesting so you can sort of Leverage your acquisition
46:41 dollars yes right see well well Tom this was this was fascinating I like I said at the beginning I know very little bit of you know very little about reverse mortgages it and they're they're much more flexible and and and they're they appear to be a just a great tool um for people to discuss with their uh financial planning professionals their accountant lawyer you know whoever they're dealing with um so I I I really appreciate you coming on the show today
47:16 to talk about this and and help people understand you know what they're what they're really all about so so thank you so much for being on the show today well my pleasure thanks for having me and uh I I really appreciate the opportunity to to chat with you so so I'm gonna have you hang on for a minute and I'm just going to wrap things up and then we we can chat for a minute after we go offline so folks that that's a show for today and I I encourage you to take a second look at this show um there's there was there lot packed into this time and and I think that you know
47:53 you may have a number of questions so I'm going to put Tom's uh contact information in the show notes and um I'm I'm sure Tom if people want to reach out to you with questions you'll be happy to answer those yeah more than happy to answer them and and that way um you can educate yourself and and uh you know be better prepared to talk to your advisers so just real quickly tomorrow at 10:00 a.m. is my show business lessons from the military and uh then on Wednesday at
48:28 10: a.m. these are all Pacific Time by the way uh is people making money so a couple more times for us to be together this week thank you so much for joining me today and signing off as I always do Bell I mean Marie You Are My Belle thanks so much folks hope to see you later this week