As the reverse mortgage industry draws near to new program changes taking effect in 2015, it’s time to stop thinking about the product as a penalty or a last resort, and start thinking about it as a retirement tool.
Such is the advice of ThinkAdvisor, an online resource for investment news, in-depth analysis and market data and tools.
Although the financial product has received a bad reputation over the years, new regulations will inspire a lot more conversations among financial planners and their clients about this alternative revenue option, which many say has its place in retirement planning.
“Despite their largely negative public image, many mortgage loan originators say reverse mortgages can represent a legitimate retirement ‘tool’ that enables an individual or couple to stay in their home and maintain a desired lifestyle,” David Weldon writes.
Mario Quintero, a mortgage loan originator with Strock & Tanner Mortgage Corporation, which serves Florida and New Jersey, has experienced this firsthand, having helped save 25 families from foreclosure by using a reverse mortgage.
Additionally, Quintero notes that some clients seek reverse mortgages to have access to disposable liquid cash, while others are using a reverse mortgage to purchase a new home in retirement.
And, contrary to what some might think, consumers are becoming more educated about the product.
“I would say that about 95 percent of them have already done extensive research on the product,” Quintero told ThinkAdvisor. “There’s about 5 percent that still have to be coached through the process.”
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Written by Emily Study