Reverse Mortgages in the Southwest

From the dry, crisp climate to scenic landscapes, and iconic national parks such as the Grand Canyon, the American Southwest is full of natural wonders, and eclectic cultural influences. The region consists of Texas, Oklahoma, New Mexico, and Arizona.

With sprawling deserts and a plethora of museums, tribal lands, and historical sites, the Southwest region is booming with Native American and Spanish American history. And with large cities and metropolitan areas such as Houston, Phoenix, and San Antonio, the region is home to nearly 43 million Americans1.

State/TerritoryTotal PopulationPercentage of population ages 65+
Texas29,527,94112.9%
Oklahoma3,986,63916.1%
New Mexico2,115,87718.0%
Arizona7,276,31618.0%
 Total = 42,906,773Average = 16.3%

Data: U.S. Census Bureau

With a relatively low cost of living, picturesque landscapes, and year-round sunshine, the Southwest has become a retirement haven for seniors. And with the region being known for its outdoor recreation, there are plenty of parks to walk, bike, and take in the scenery. With this in mind, it is not surprising that 16.3% of the region’s total population is comprised of seniors ages 65 and older1.

As the Southwest continues to gain popularity as a retirement destination, so does the “aging in place” movement. With 90% of senior homeowners expressing their intent to stay in their homes into advanced retirement years2, today’s retirees are living more independent lifestyles than ever. But as we age, so do our homes. And it’s only natural that older homes across the region may require some updates, renovations, and modifications to fit the needs of aging homeowners. For retirees in the Southwest on a limited or fixed income, these projects could present a financial burden. But they don’t have to. For many retirees, there is an untapped source of wealth that can supplement retirement income that could be used to fund these projects and more. And it’s right in your home…

Home Equity in the Southwest
With senior homeowners ages 62 and older now accounting for more than $10.6 trillion in home equity3, you may be surprised to find out just how much wealth is in your home. And tapping into this equity with a Home Equity Conversion Mortgage (HECM) – also known as a reverse mortgage – could provide you with an additional source of cash flow.

Despite common misconceptions, with a reverse mortgage, you can continue to live out your golden years in your home – while maintaining full title and ownership. And here’s another perk: with reverse mortgages, there are no monthly mortgage payments required4, so you can free up even more cash5 every month – an average of $1,408 in the Southwest6.

Can I Get a Reverse Mortgage in My State?
Great question! If you’re at least age 62 and have sufficient equity in your home, the answer is YES. Reverse mortgages are available in Texas, Oklahoma, New Mexico, and Arizona. You can learn more about reverse mortgage qualifications and eligibility requirements here.

How Much Money Can Retirees in the Southwest Get with a Reverse Mortgage?
The amount of proceeds available from a reverse mortgage is known as the “principal limit.” And while the principal limit is determined by a multitude of factors, some of the most prominent ones include age, type of reverse mortgage loan, current interest rate, and of course – home value. Even in the Southwest where home values are among the nation’s lowest7, homeowners may be surprised to see just how much equity is built up in their homes.

Average Home Values: 2022
Oklahoma $173,410
New Mexico $281,938
Texas $295,319
Arizona $424,544
  Average = $293,802

Zillow Home Value Index, Data as of March 2022

How Retirees in the Southwest Can Use Reverse Mortgage Funds
When it comes to the Southwest, the old saying “home is where the heart is,” rings especially true. Rooted in deep history and family values, the Southwest’s homes boast unique and sought-after architectural styles, including Pueblo, Spanish Revival, Adobe, and Mission home plans.

Combining geometric shapes with rustic charm, Southwest style homes are unique in character and historical influence. And with Southwestern homeowners taking pride in these abodes, they are no strangers to the updates and maintenance that come with them. Fortunately, reverse mortgage proceeds can be used to fund these projects – and any other home improvements. And that’s just one way people opt to use cash from a reverse mortgage. A few other common use cases include:

  • Keeping more cash on hand for everyday expenses such as bills, credit card balances, and other debts.
  • Setting aside funds for healthcare. According to Fidelity, the average 65-year-old couple may need approximately $300,000 saved (after tax) to cover healthcare expenses8 throughout retirement.
  • Establishing a line of credit to fund future expenses. Having a financial “safety net” not only gives you peace-of-mind, but also ensures you’re prepared for unexpected expenses.
  • Assisting loved ones with significant expenses such asa wedding, college tuition, or a down payment on a home.

One of the most common questions we are asked is, “How can I use reverse mortgage funds?” And the answer is simple: “Any way you wish.” This flexibility is just one of the top benefits of a reverse mortgage.

As compared to a standard Home Equity Line of Credit (HELOC) loan, a reverse mortgage boasts a comparable rate, but  greater stability. In fact, when several banks and lenders were forced to freeze or suspend HELOC applications and originations in 2020 in the wake of the COVID-19 pandemic, reverse mortgages remained available. In such uncertain times, this staying power was especially noticeable. And for the Southwest region, affected particularly hard by the pandemic, this stability was praised.

And in the days since, reverse mortgages have gained traction with retirees across the Southwest. Just take a look at how many loans were closed by state in 20219:

Reverse Mortgages in 2021
Oklahoma199
New Mexico203
Texas3,162
Arizona3,952
 Total = 7,516

Data: U.S. Department of Housing and Urban Development

Funding Your Retirement in the Southwest
Whether you’re an avid explorer, history buff, or sun bum – there are plenty of reasons to call the Southwest region home. And as you settle into your golden years, tapping into your home equity with a reverse mortgage could help you fund the Southwest retirement of your dreams.

At Longbridge Financial, we specialize in helping you use hard-earned home equity to address the financial challenges that impact so many Americans who are in, or preparing for, retirement. And while many companies offer reverse mortgages – at Longbridge, they’re all we do. Our knowledgeable staff has years of experience and are true experts in the industry. We’re committed to recommending the reverse mortgage program only once we’ve made certain that the loan is best fit for you and your situation.

We’re also an FHA approved lender, meaning our loan program is insured by the U.S. Department of Housing and Urban Development (HUD). And as a proud member of the National Reverse Mortgage Lenders Association (NRMLA), we fully subscribe to its Code of Ethics.

Isn’t it time to see what tapping into home equity can do for you? To learn more, fill out the form on this page for a free info kit, or contact the Longbridge team today.

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