Special offer

"Selling and Moving Out" is not an alternative to a Reverse Mortgage

By
Mortgage and Lending with First Meridian Mortgage

I hear all the time from elder law attorneys and financial planners who don't understand how Reverse Mortgages work, that "the client should just sell the property."

What they fail to comprehend is that over 89% of seniors want to stay in their home (according to AARP) and many have told me that they hope to die in the home that they have lived in for so much of their lives. Telling them to sell their property is not only inconsiderate and won't happen, but in today's environment where much of their value has diminished lately, is probably a bad move for many reasons.

The most absurd part of this strategy is that most of the time it is seen as a lower cost alternative to a Reverse Mortgage. Although Reverse Mortage costs are hig, are they higher than the realtor's commission ona sale? Most of the time they will not.

Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

In todays market .. is that still equity to make these types of offrs work ??

Jun 26, 2009 01:56 AM
Sandra White
John L Scott Real Estate - Port Townsend, WA
Experienced Residential Resale Broker

I think the reverse mortgage is really a case by case situation.  It has worked out very well for my sister and her husband, as they did have a lot of equity.  Their children will not inherit very much as it has been expensive.

But seniors should really make sure they will be able to stay anyway as they age and cannot maintain a home any more.   The yard work, upkeep inside and just handling insurance taxes and bills can be a challenge as people age. 

Jun 26, 2009 02:06 AM
Michael Pinter
First Meridian Mortgage - Brooklyn, NY

Eric,

They don't work in every situation, but they do work in many. These loans are the only growing area in the mortgage induatry and  they are helping hundreds of thousands of people. Thanks for the comment. Feel free to subscribe to my blog.

Michael Pinter

Jun 26, 2009 02:24 AM
Michael Pinter
First Meridian Mortgage - Brooklyn, NY

Sandra,

Thanks for the comment. You are absolutely correct.

Michael Pinter

 

Jun 26, 2009 02:25 AM
Mark MacKenzie
Phoenix, AZ

The "advice" of financial planners can often times be mind-numbing.  If they sell the property, aren't they going to have to pay rent somewhere anyways?

Jun 26, 2009 04:46 AM
Michael Pinter
First Meridian Mortgage - Brooklyn, NY

Mark,

Great point. I've found most financial planners love to look at only the dollars and cents of it and forget the crucial emotional parts of it. I've heard from planners that they should just move in with a family member; what if they don't want to? What if their family member doesn't want to? Thanks again for your comment.

Michael Pinter

Jun 26, 2009 05:01 AM
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

Great points.  And that's times two, the sale and the next purchase.

Jun 27, 2009 09:55 PM
Michael Pinter
First Meridian Mortgage - Brooklyn, NY

Ken,

You are absolutely right, I didn't even think of teh commission on teh buy. Thanks for the comment. feel free to subscribe to my blog.

Michael Pinter

 

Jun 28, 2009 12:12 AM
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

Thanks for the invitation, I'm already a subscriber.

Jul 01, 2009 10:45 PM
Michael Pinter
First Meridian Mortgage - Brooklyn, NY

Ken,

Sorry. Thanks for subscribing and please keep the comments coming.

Michael Pinter

Jul 01, 2009 11:46 PM