Investment News: Advisers Like Reverse Mortgages, But Only in Some Situations

Reverse mortgages don’t provide a catch-all solution for senior homeowners, but when they can improve a client’s specific situation, financial advisers are on-board, according to a recent article from Investment News.

The article spotlights an instance where Amy Jo Lauber, president of Lauber Financial Planning in West Seneca, N.Y., helped a client obtain a reverse mortgage—the only reverse mortgage she has advised in the course of her 22-year career.

Lauber’s client, who lived in North Carolina, owned a home valued close to $800,000, which was one of the only assets she retained following a divorce from her husband. A strong emotional attachment to the home also fed into the decision to keep the home rather than sell.


A reverse mortgage enabled her to retain the home and get an income stream for life.

“It was really only needed in that situation, but it was the right situation and I’m glad we used it,” Lauber said in the article.

Michael Zmistowski, a personal financial planner at Financial Planning Advisors, says he only uses HECMs is “very specific situations.” One of those situations involved a client with an $850,000 home who was still making mortgage payments at age 70.

By using a reverse mortgage, Zmistowski’s client was able to remain in his house, wipeout the existing mortgage and eliminate monthly payments.

While reverse mortgages can help borrowers in their own particular situations, the article also cautions that these products, like all financial instruments, are not without their drawbacks.

Read the Investment News article.

Written by Jason Oliva

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  • “A reverse mortgage enabled her to retain the home and get an income stream for life.”

    At least there is only two myths in one sentence. Of all the parties involved in a HECM, the only one who does not obtain income of any kind is the borrower. Who says the stream (cash inflow) is for life? It only lasts as long as the borrower has not violated in any covenants in the HECM which result in loan termination, i.e., as long as the HECM is active and performing.

    Do financial planners actually believe the quoted sentence? What a mess it will be when they become aware of the facts of what a HECM is.

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