The Fox Business Network — no stranger to open-minded coverage of the reverse mortgage — ran a basic Q&A for potential borrowers this past weekend, providing a rundown of common questions that originators and brokers likely face every day.
“Forget downsizing or migrating to warm weather — an overwhelming number (83%) of pre-retirees and retirees today say they want to remain in their homes for as long as possible,” Fox Business writes, citing recent research from The American College of Financial Services in Bryn Mawr, Pa.
“The survey also found seven in 10 seniors do not understand reverse mortgages,” the piece continues, summarizing an all-too-familiar conundrum facing the industry.
Fox Business then sits down with Meghan Keller, a Home Equity Conversion Mortgage consultant at American Financing, to break down the HECM basics, from eligibility requirements to draw limits to what happens when the loan becomes due.
Some of Keller’s descriptions might cause the average borrower’s eyes to glaze over — including the leadoff summary of the HECM as a “negatively amortizing product” — but she also provides some program overviews that could help consumers better understand reverse mortgages.
“While there’s no perfect formula for determining how much you can get with a reverse mortgage, the rule of thumb is you’re eligible to convert 50% of your available equity,” Keller told Fox Business, providing a simple, if inexact, way for borrowers to visualize the potential of a HECM in their financial situations.
The Q&A with Keller represents the latest appearance of reverse mortgages in Fox Business’s coverage; back in May, the network featured the HECM for Purchase product on an episode of “The Property Man.”
Read Fox Business’s full coverage here.
Written by Alex Spanko