HECM for Purchase began with the passage of the Housing and Economic Recovery Act of 2008. Prior to this legislation, if a homeowner in retirement wanted to relocate, qualifying for the new home often proved difficult. They would have to be eligible to purchase a home though traditional means, establish their residency in the home, […]
I can understand why there are reverse mortgage skeptics. The product is unfamiliar to most, and confusing to others. Unfortunately, no number of charts, mathematical calculations, HUD guideline references, or even my book, will ever change the minds of many that need to experience it to believe it. Like many in my industry, I must […]
You see it all the time – articles about reverse mortgages that begin with “They are not for everyone”, and then the author describes an ideal scenario. Sadly, many perfect candidates won’t consider a reverse mortgage because misinformed authors and consumer advocates have painted the wrong picture of the product. Some phrases that are inaccurately […]
Many financial planners are now recommending reverse mortgages, as they have finally begun to recognize the strategic uses of home equity as a retirement planning tool. Sadly, however, many will consider the product only once their other retirement funds are depleted. This “last resort” tactic has shown to be less than optimal in academic studies […]
For most of us, the bulk of our housing costs are relatively constant. Monthly mortgage payments may vary slightly as property taxes and insurance rate are updated annually. But one housing cost is often seasonal – Heating Ventilation and Air Conditioning (HVAC). It can make, or break, a budget. One advantage of living in the […]
Is the Reverse Mortgage as simple as some claim? Or is it a highly complex financial tool, as the Consumer Financial Protection Bureau describes it? While it may appear that these views are mutually exclusive, they are not. However, the underlying concern is one that congress, regulators, financial planners, lenders, and consumers all need to […]
With the regulatory overhaul over the last three years, and with more to come, the reverse mortgage program has gained positive attention in the national media and financial planning community. But, the basic concepts that every older homeowner should know have remained unchanged for the most of three decades. So, since other blog posts, including […]
Reverse mortgage lenders have been fighting an uphill battle for years. And blogs and online debates likely won’t change the overall perception (or misperception) about reverse mortgages. There will always be those who can’t help but voice their opinions about a product they simply don’t understand. Nevertheless, as an advocate for proper home equity conversion […]
“Accessing a large sum of cash from home equity and placing it in a bank account might be a problem for certain benefits that are “means-tested.” – Understanding Reverse Will getting a reverse mortgage impact my government benefits and/or my income taxes? These are major concerns that come up frequently when speaking to homeowners, especially during […]
Delayed gratification is the principle that resisting a SMALLER reward today may lead to a LARGER reward later. Yet how many people are really willing to wait for something better? Consider the famous Stanford Marshmallow Experiments conducted in the early 1970s. Children were offered one marshmallow immediately, but two marshmallows if they waited only 15 […]
When discussing Social Security and Reverse Mortgages, most professionals have always responded that “distributions from a reverse mortgage do not adversely affect basic Social Security benefits.” That is true, as basic Social Security is not a “means tested’ program. But that is only half of the story. The Reverse Mortgage can actually be used to […]
A HECM, or Home Equity Conversion Mortgage, is the technical term for the federally-insured reverse mortgage. Therefore a HECM to HECM refinance (also known as a H2H Refi), occurs when the borrower is paying off an existing HECM with a new HECM. These reverse mortgages are a little different from traditional HECMs that pay off existing […]
The book, Understanding Reverse, was designed to answer the top questions I received as a loan originator and educator. Now that I often find myself speaking to financial planners and realtors, however, I receive questions like: “How can home equity be used strategically to fund retirement? “How can a home be purchased with a reverse […]
The press has been favorable to recent reverse mortgage reforms, yet there is still no shortage of articles that offer warnings. I believe those warnings are misplaced, and that other, more legitimate, concerns about reverse mortgages need addressed. The issues we read about are either misunderstood, or have already been addressed by industry reforms. The […]
Earlier in the year, I was asked to write an article for a large national publication. My primary message was that the reverse mortgage is NOT the financial product you thought you knew. With recent regulatory changes and a renewed focus on financial planning, the FHA-insured mortgage is now being used by the affluent as […]
