Women take the leadership spotlight at reverse mortgage summit

"Using the reverse mortgage proceeds, they're able to make no payments for two years while still accruing $63,000 in deductible mortgage interest and insurance. At that point, they can use the $63,000 distribution to make a lump-sum payment on the HECM. This fully offsets the taxable portion of the distribution and saves them $13,000."

"According to U.S. Mortgage Insurers, about 40 million homeowners have used private mortgage insurance to purchase or refinance a home since 1957 including 800,000 who bought a home with it in 2024. Jensen walked the audience through a technical presentation she'd previously given to the Financial Planning Association, noting that the permanent deduction can be part of a powerful financial strategy for senior homeowners in retirement or planning for it."

"Additionally, the couple could repeat the strategy every few years, with Jensen showing their total savings at roughly $27,000 after five years—an amount that exceeds their upfront costs for the reverse mortgage. I've got to tell you, when I showed the financial planners how this works, they had no idea that this was possible, Jensen said."

The One Big Beautiful Bill Act signed in July 2025 made the mortgage insurance tax deduction permanent, benefiting approximately 40 million homeowners who have used private mortgage insurance since 1957. This provision creates significant opportunities for senior homeowners, particularly as Americans over 60 now comprise nearly half of homebuyers. A case study demonstrates how a 72-year-old couple purchasing an $800,000 home can strategically use a HECM for Purchase loan combined with required minimum distributions to generate deductible mortgage interest and insurance. By making lump-sum payments from their retirement distributions, the couple offsets taxable income while accumulating substantial tax savings exceeding $27,000 over five years, surpassing their upfront reverse mortgage costs.

Read at www.housingwire.com