Recently Funded - $2.4M Reverse Mortgage for High Net Worth Client.

Recently Funded - $2.4M Reverse Mortgage for High Net Worth Client.

Would it surprise you if you learned that High-Net-Worth (HNW) clients use reverse mortgages as part of their overall financial planning strategy? HNW clients have a minimum of $1 million dollars in liquid assets. So why use a reverse mortgage?


Why High-Net-Worth Clients Use Reverse Mortgages


1. Retirement Income. Most HNW clients take a long term approach to investing and rely on the advice of financial professionals. We recently helped a HNW client who was drawing down considerable funds from their RSP’s to support retirement lifestyle. By setting up a reverse mortgage with a monthly draw, we were able to substantially reduce his taxable income (drawdown from property wealth is non-taxable) and extend the life of his investment portfolio.


2. Redistribution of Wealth. In the latest wealth report from Knight Frank, 49% of HNW respondents reported transferring wealth to the next generation as one of their top priorities. Those with significant residential property wealth ($5M+) use reverse mortgages to pass wealth down to their children and their grandchildren, sooner rather than after they pass away. This is often used by younger generations to purchase property or enhance their buying power to purchase a larger property or an investment.


As one of our HNW clients put it “what good is leaving an inheritance to my children…when I’m gone they’ll be in their late 60’s…I’d much rather give them a head start in life now, and see them enjoy it”


3. Retirement Lifestyle. Lastly, we are seeing an increasing number of HNW clients borrow to enhance their retirement lifestyle, buying vacation homes & cottages, taking once-in-a-lifetime holidays and helping other family members.


If you have any questions or would like to discuss how a reverse mortgage can fit into your HNW clients overall financial plan, don’t hesitate to get in touch.

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