The reverse mortgage is becoming more and more of a mainstream financial tool used by seniors all over the country and the world. In the past, financial planners did not have a strong enough base of information to effectively counsel clients in reverse mortgage. Because of the current economic climate, things seem to be shifting. As the reverse mortgage becomes more and more legitimate in the eyes of financial planning professionals, seniors stand to gain not only cash but also knowledge. So what’s changed?
While reverse mortgages have been around longer than most people think, in recent years due to changes implemented by HUD they have been taken a lot more seriously and become a trusted tool for seniors to finance their retirement. For those 62 and older who live in their home, have a good equity position and can demonstrate a responsible history of payment of financial obligations the reverse is a great way to supplement income and extinguish mortgage payments. New underwriting guidelines are meant to guarantee that those borrowers who make the cut will be able to pay their property taxes and homeowners insurance for the duration. For those who almost pass the guidelines there are new options that utilize set asides and things of the like. Tools and guidance like this are bringing the reverse to the forefront of the world of loan options and financial security for seniors.
New safeguards and oversights such as the financial assessment are allowing financial planners to take a serious look at the product and making them become educated as more and more of their clients are hearing about all the reverse can do for them. Financial planners can find a reverse useful to offer additional security to their clients with the optional line of credit but they can also use the reverse proceeds to help avoid clients drawing down on their investments to live on. Investment continuity is the financial planners and often their clients best friend. The only real “pitfalls” for financial planners referring or not referring a client to reverse is a lack of knowledge. We are always available to financial planners or their clients for free advice and proposals. Let us know how we can help you.