Reverse Mortgages Are Nothing to Be Shy About

By Steven Cooley [NMLS #1389501]

There are many different types of people who could benefit from a reverse mortgage for a lot of different reasons. However, the reverse mortgage product has long had a serious challenge to overcome: consumers’ negative perceptions. Consumers still lower their brows when they hear the term “Reverse Mortgage,” even though the product is the most regulated it has been since its inception more than 20 years ago.

The reverse mortgage is not a product people commonly refer to their friends and family. Why? Reverse mortgages are still a topic that is kept under wraps, even among those whom they have helped. Since 2005, more than 50,000 of these loans are done each year for many happy consumers*. In the traditional “forward” mortgage market, if someone gets a low interest rate, it’s a point of pride and joy, announced to friends and family around the dinner table. Reverse mortgages, on the other hand, don’t get the dinner table – they get the internet, if they are discussed at all. And the tone is rather neutral. Why the hush-hush? Are Reverse Mortgages so embarrassing?

As a loan originator myself, I believe the reverse mortgage industry may have unintentionally stigmatized our own product. Here’s my theory. You, the prospective borrower, have been watching our advertising and absorbing our marketing for decades. We’ve worked hard to craft a message to help you understand how this product could possibly enhance your life and retirement, but that message doesn’t always feel true to your experiences. You cringe when you see that couple of elders laughing and gardening without a worry in the world. (We both know that no one laughs while gardening. What’s laugh worthy when gardening? A gentle smile is acceptable, but that’s it.) Right then and there you make a definitive decision. I DON’T NEED THIS REVERSE MORTGAGE THING!

That tagline is the mantra of many consumers: I DON’T NEED THIS! That stigma has been hard to overcome. We’ve made strides to explain how a reverse mortgage can be used as a financial tool, but you can’t shake the image of the overly attractive seniors skipping through perfectly green meadows, while the sun shines upon the inappropriate grins on their face. We’ve asked you questions about your needs. Do you have enough money? Are you worried about retirement? Would you like to renovate your home? Are you getting by? Do you need cash? Even if your answer is “yes” to one of these questions, you still may think: I DON’T NEED THIS. And maybe you don’t, but for many borrowers, a reverse mortgage can be truly life-changing.

There are plenty of products and services geared toward seniors. Most reach out to connect with you on some level emotionally. Some use Desperation, Irritation, and Fear. Others speak of Entitlement, Achievement, and Contentment. We want you to feel entitlement, achievement and contentment when applying for a reverse mortgage. We recognize who you are, what you stand for, what you mean to the fabric of this country, and how you have created a foundation of innovation and achievement that we will all thrive upon for many years to come. Rest easy, we just want to make sure you have every advantage afforded to you. If you qualify, you deserve it.

The truth is, we can’t change the stigma. All we can do is reach you where you are. We can explain the reverse mortgage benefits, the challenges and all the options in a respectful way. That’s what we do best. In return, we want to hear from you about your perceptions, your questions and your needs. Because there is nothing embarrassing about optimizing your retirement and creating financial options for your future. Nothing at all.

Click here to learn more to see if a reverse mortgage makes sense for you.

*https://www.nrmlaonline.org/2016/06/06/annual-hecm-endorsement-chart

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.