By Steven Cooley [NMLS #1389501]
Full disclosure: I work for Finance of America Reverse, a good-sized company that sells reverse mortgages. I am a licensed loan officer and have a considerable amount of knowledge concerning the product. I know the pitfalls and benefits. I have the perfect prospect: my Mom. Mom is single, 62 years old, teaches math at a local college, and knows everything about everything, just like a mother should. She fundamentally understands what a reverse mortgage is and how it works, but for some reason she believes it just isn’t for her.
Yes, I’m in the reverse mortgage business, but Mom as a missed sale opportunity isn’t the issue. The issue is that a reverse mortgage truly could help her in retirement, but the notions and ideas she has about reverse mortgages are preventing her from seriously considering one. I know she has done it all by herself her whole life. I know she has worked hard to pay off her house. I know she wants to leave something to my siblings and me when she passes away one day. But what she misses in all of this is that I’d rather she be happy and secure today than inherit her house tomorrow.
My siblings and I are all homeowners ourselves. We don’t need Mom’s house. We love her for the thought, but the thought is truly enough in this case.
She’s still working today, but when she does retire, I want her to be OK. In my experience, many seniors, like my Mom, see a reverse mortgage as some sort of white flag of surrender to their lifelong success of homeownership. In reality, this type of loan is far from it; it’s just another tool to help supplement income and optimize retirement. It’s Mom’s money, and she earned it.
Parents do a good job of protecting their kids from their finances, but as we get older we usually become more aware. We also have learned about longevity by now; our parents aren’t going to live forever, but statistics show they are likely going to live for a long time. Diversifying and utilizing the financial tools available just makes sense. Even if you don’t need to use it, it’s there.
With education, prospective borrowers like my mom can learn about why a reverse mortgage is not a form of surrender. For many people, it makes good financial sense.
If you are a Mom or a child with a Mom like mine, click here for more information about reverse mortgages and how they might help broaden your retirement approach, or simply provide peace of mind for you and your family.
This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.
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