Issue 21.13
Somehow, somewhere the reverse mortgage has been tabbed with a bad connotation and a lot of negative public opinion. The articles in the AARP newsletter ‘s talk about one widow having to sell her home because her husband died and she was not on the loan and now has to sell or leave the house. Or another story about a couple who has got behind in paying their property taxes for a year or two and the bank and FHA is now forcing a sale!
You don’t often hear about articles like the one in the Wall Street Journal last week on what a tremendous option the reverse loan is today when seniors are buying a home and retiring? Wow, no kidding! That is only what we have been talking about for the past four years now!
Folks, there is a reason that 70% of our senior client’s today are using the reverse loan when buying a home. And, a reason that 50% of our client’s that are over 62 are using the reverse loan to re-finance their current mortgage and eliminate their payments for life versus re-financing their conventional loan and just saving 50.00 per month. They are saving their entire mortgage payment for the rest of their life.
The old conventional thought is that only if you were in a dire financial situation did you look at a reverse mortgage. Likewise, when there is dialogue amongst friends then usually there is a negative aspect to the discussion.
It is almost frustrating to listen to. Because, if I were to spend a half hour with you and your financial planner, or that friend that thinks they know that a reverse loan is not a good option, yet they can’t tell you why they are not good, this same advisor or friend would realize that they did not understand how they work and the flexibility and options of this loan today.
Coming from a Registered Investment Advisor myself, I guarantee that friends or advisors that you hear negative aspects about the loan really don’t know how they work in full? Better yet, they don’t know when they are best used. And, the answer may simply be just a reverse line of credit that is in position or acts as a cushion if you need funds or an emergency comes up? If you’re not using the funds from your reverse mortgage there is no interest that is accruing against the home. It is only if you need the funds that when you draw the funds they will be there without any liability or payment to you and your wife.
Let me ask you this? Do your kids care really how much money is in the home when you die? Don’t they care more about your standard of living and comfort ability in your retirement more? I will bet 90% of them do. So, let me make a clear point. If you are over 62, and you’re buying a home, and or making a mortgage payment on a home for the rest of your life, then I think you should look at the Senior HECM reverse loan and the options that it brings today. It is a five minute discussion for my dad and probably believe it or not a five minute discussion for most of you as well.
Whether a reverse mortgage is right for you needs further discussion. Please contact us or your licensed HUD advisor for your options when considering a reverse loan today.
Brandon Hansen is a Senior Mortgage Banker, Registered Investment Advisor Representative for
Cherry Creek Mortgage / Investment Advisors International. He can be contacted at 435-668-2840 / 435-773-4164. www.seniorbankingtoday.com