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The financing world: A decade of reflections

National Mortgage Professional
Jul 31, 2007

Wait for what?Nelson A. Locke, CRMLBest time to sell real estate Do you have clients who have been considering obtaining a reverse mortgage to help them live a better, more satisfying retirement? Or maybe considering obtaining a reverse mortgage because they were strapped for cash and having problems making financial ends meet? Have they been considering obtaining a reverse mortgage for any reason at all? After all, it's their money, isn't it? Recently, media articles have appeared around the country quoting AARP representatives as advising seniors to "sit it out for a year or two" before obtaining a reverse mortgage. Please verify this for yourself by reading an article written by Harriet Johnson Brackey of the Fort Lauderdale Sun Sentinel, published April 8. In the article, AARP reverse mortgage specialist Bronwyn Belling was quoted as saying, "Unless you have a really urgent or immediate need for cash right now, sit it out for a year or two ... See what happens to these fees. And there may be more product choices and lower costs for consumers by then." Let's talk about this for a minute. Let me be clear that what I am about to say here is just my opinion. But it is based on real, hands-on experience with thousands of satisfied seniors who obtained and benefited from reverse mortgages for reasons personal to them. What is one person's mountain is another's mole hill. But if it's your client's mountain, and you see them hesitate in their decision making because of ill-conceived media like the above, you need some tools to overcome their reluctance. Here are some for your consideration. Let me proceed as if I am speaking to the client here. "You need to solve your problem, whatever that is, and you won't relax until you do. And every day you worry is one day too many. Worry causes stress, and stress shortens life spans. That's not an opinion, that's a medical fact. Reverse mortgages are senior products. You are a senior. Do you have time to wait for the 'what if' when the 'what is' in your life is staring you right in the face? 1. Property values have been dropping. Your new reverse mortgage will calculate your benefits based on the value of your property now, not at some future point. If you wait and it goes down, you will get less money. On the other hand, if you open your account now and your value goes up, the equity will build for you and be available through a refinance of your reverse mortgage. The only way you lose, is if you wait. 2. What if you become ill and now must leave the home you love because you took a wait-and-see attitude and lost your chance to secure a reverse mortgage while you qualified? How are you going to pay for the health care you need to get well and, more importantly, wouldn't you rather get well while staying in the home you love? Without the funds a reverse mortgage can provide, you might be on your way to an assisted care facility. Have you considered that? 3. How about those of you who need the cash to repair your homestead? How does waiting to save a few bucks that you aren't even paying until you don't even need your home any longer make any sense? While you wait, your roof continues to leak and your air conditioning is malfunctioning. But according to AARP, you might save some money by waiting. People, what is your personal comfort worth? Aren't you worth something, especially when you consider that waiting provides no guarantees that anything will be different? 4. Maybe you were thinking about traveling or buying a second home with your equity so you could be closer to your grandkids. Postponing that pleasure may not only have a priceless detrimental effect on the quality of your life, but your grandkids won't benefit from your contribution either. OK, so let's wait to save a few bucks. How will you explain that to the grandkids?" OK, now I am going back to speaking to you, the reverse mortgage originator. In my world, you either advocate for seniors or you don't. You don't walk on both sides of the street at the same time. However, you always do what's best for the senior client, and that might mean you have to push him a little. Seniors, by their very definition, are in the later years of life. In many cases waiting accomplishes nothing but additional stress and discomfort. Here's one last good argument to make with a reluctant senior. "Here's my advice. Wait for nothing. If you need a reverse mortgage, do it now. Change your life for the better. Benefit yourself while you can enjoy it. Don't delay because poorly informed writers or so-called consumer advocates create uncertainty or doubt that you might or could benefit by waiting. Yes, that's right; the check is in the mail. Oh yes, we will have national health insurance next year. And, I forgot, your insurance and taxes are going down next year. Please. We've all heard it before. Live in the now." What is your client's peace of mind and sense of personal security worth? I can tell you—it's priceless. There is nothing more important to a senior than to know he can live out his life in the home he loves, with dignity. A reverse mortgage can help him accomplish that goal. Thanks for listening. Nelson A. Locke, CRML is a past president of the Florida Association of Mortgage Brokers, a founding member of the National Reverse Mortgage Lenders Association, the founder of the Association of Reverse Mortgage Specialists Inc. and CEO of Value Financial Mortgage Services Inc. He hosts the public television program "Ask Mr. Mortgage," discusses reverse mortgages daily on AM radio and designed the FAMB training course "Understanding Reverse Mortgages." He may be reached at (800) 760-5363 or e-mail [email protected]
Published
Jul 31, 2007
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