When I chose to leave the traditional mortgage lending world and move to reverse mortgages, many friends and family asked WHY? There are so many stories about ways the reverse mortgage product has hurt senior citizens. Yet, I didn’t go in blind.
I did a whale of a lot of research. I studied articles, regulations, and talk to dozens of bankers, financial planners, and accountants. The truth is, while some of the stories are true (sad face), the vast majority of the stories are false urban legends that have spun up and been perpetuated, for who knows what reason.
No, the truth is, the Home Equity Conversion Mortgage “HECM”, which is the proper name for a reverse mortgage, is really a good product when used under the right circumstances. Even the Financial Planners Association has changed its stance to now recommend that planners at least include a HECM in discussions with clients.
I’ll be the first to tell you this product does not fit all. It requires a set of well understood and analyzed financial decisions. Under the rules and regulations, potential borrowers, age 62 or beyond, even have to attend HUD counseling sessions put on by independent third party agencies. Now that process is a simple phone call, not a trip, but nonetheless, it is a safeguard for senior citizens.
When the right understanding is reached, the HECM can be used in so many ways, like these:
- Ease cash flow concerns for aging seniors
- Aging in place, keeping your home and living out the golden years
- Creating lines of credit for future needs
- Replacing long term health care costs
- Buying newer, “right sized” property for retirement
- And many more….
If you are age 62 and beyond, or know someone who is, a HECM could be a saving grace to solve the financial puzzle facing you in retirement. Contact a qualified, licensed professional to learn more.
Hint: I’m already age 64. I made this move once I learned about the great opportunities in this product. Being in this age bracket myself, I know the choices that have to be made so that we don’t ‘outlive our cash’. They can be daunting choices. You should consider all your alternatives, including a reverse mortgage.