Reverse Mortgage Case Study: Using Home Equity to Grow Net Worth and Maximize Estate Value

The Situation

A financial advisor, Craig Deasley of IA Private Wealth, reached out to me looking for a strategic lending solution for one of his long-standing clients.

The client was 73 years old, in excellent health, and living a very active lifestyle. They had accumulated significant assets over the years and were financially comfortable. Importantly, this was not a situation where income was needed to cover living expenses.

Instead, the client had a more sophisticated objective:

They wanted to unlock the value tied up in their home and deploy it in a way that could outperform home price appreciation, with the ultimate goal of growing their net worth and leaving the most tax-efficient estate possible to their beneficiaries.

Their home represented a large portion of their net worth, but it was effectively idle capital.

The Challenge

While the client had ample investable assets, their home equity was:

• Illiquid
• Not generating income
• Subject to uncertain long-term appreciation
• Tied up in a single, non-diversified asset

From a planning perspective, Craig identified a common issue among affluent retirees:

• Drawing taxable income or selling investments could trigger unnecessary tax
• Traditional refinancing would require monthly payments, reducing flexibility
• Downsizing was not desirable — the client loved their home and lifestyle

The challenge was finding a way to:

• Access home equity without disrupting cash flow
• Avoid forced income withdrawals
• Preserve investment portfolios
• Improve long-term estate outcomes

The Strategy: A Reverse Mortgage as a Planning Tool

After reviewing the full financial picture with Craig, we explored the use of a reverse mortgage — not as an income solution, but as a strategic balance-sheet tool.

Key points of the strategy:

• The client qualified for a substantial reverse mortgage based on age and property value
• No monthly mortgage payments were required
• Funds could be accessed as a lump sum or flexible draw
• Interest accrues and is repaid only when the home is sold or the estate is settled

This allowed the client to redeploy home equity while maintaining full ownership and control of their home.

How the Funds Were Used

Rather than using the proceeds for spending, the reverse mortgage funds were coordinated with Craig’s investment strategy.

The capital was deployed into a diversified portfolio designed to:

• Target returns exceeding long-term home appreciation
• Generate tax-efficient growth
• Support estate-focused planning objectives

By doing this, the client effectively:

• Converted dormant home equity into a growth asset
• Reduced reliance on taxable withdrawals from existing investments
• Preserved liquidity and flexibility
• Improved projected estate value under multiple scenarios

The Outcome

From a planning standpoint, the results were compelling:

• The client maintained their lifestyle with zero cash-flow pressure
• Their investment portfolio became more efficient and flexible
• Projected net worth at life expectancy increased
• The estate plan showed improved after-tax outcomes for beneficiaries

Just as importantly, the client gained peace of mind knowing their home was working for them — not just sitting on the balance sheet.

Why This Worked

This case highlights an important truth:

A reverse mortgage isn’t just a last-resort income tool — when used properly, it can be a powerful planning instrument.

In this scenario, success came from:

• Collaboration between mortgage strategy and financial planning
• Clear objectives beyond “cash flow”
• A long-term, tax-aware mindset
• Matching the right tool to the right client profile

Final Thoughts

For high-net-worth retirees, home equity is often one of the largest untapped resources in their financial plan.

When coordinated properly with a trusted financial advisor, a reverse mortgage can:

• Improve portfolio efficiency
• Reduce tax drag
• Increase estate value
• Preserve lifestyle and flexibility

If you’re a homeowner — or a financial professional — exploring advanced planning strategies involving home equity, this type of approach may be worth a deeper conversation.

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