Word Wednesday: Reverse Mortgage

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Education & Training with Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals.


"An investment in knowledge pays the best interest."
-Benjamin Franklin

Yesterday, I had the opportunity to sit down with Janice Brown from the Wenatchee office of American Pacific Mortgage.  The subject was Reverse Mortgages. 

Reverse mortgages are one of those loan products that has been much maligned and misunderstood.  Honestly, I've heard a lot of negatives about Reverse Mortgages, but Janice is one of those people I trust to tell me the truth... the good, the bad, and the ugly. 

I learned that Reverse Mortgages have many more dimensions than I ever imagined.  I had always thought of them as a financial tool for senior citizens with a very limited income who need to use the equity in their home to subsidize their monthly income.   What I did NOT know is a Reverse Mortgage can also be used as a wealth building tool for those who already have substantial assets and adequate income. 

I asked Janice to write a series of posts explaining some of the lesser-known aspects of Reverse Mortgages.  I hope she takes me up on the offer so I can post them here.  

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"The best way to predict the future is to create it!"
- Peter Drucker

"Information is FREE. Knowledge, Experience & Integrity Are Priceless."

-Carol Williams

Retired: Real Estate Broker/Owner, Property Manager 
Coaching, goal setting and marketing consultant by appt.

Active: Golf & Travel Blogger
"Golf isn't a sport. It's a lifestyle."
SeniorWomenGolfers.com
TopTeamCarol@gmail.com


 

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Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

I agree, Roy Kelley.  Not that we should be making loan recommendations but I think agents need to know enough not to poo poo the idea, without understanding the options.

Apr 03, 2019 06:31 AM #10
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Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

I often have heard the negative about reverse mortgages, never a positive until today Carol Williams, thank you!

 

 Make this an extra special day...

Apr 03, 2019 06:43 AM #11
Rainmaker
5,224,719
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

A reverse mortgage can improve the quality of life for some seniors. If you have seen seniors walk away from the pharmacy without their prescriptions because of the lack of funds, you can understand that many are struggling.

Apr 03, 2019 06:52 AM #12
Rainmaker
1,139,265
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI Carol Williams - I will be looking forward to seeing your future posts.  I hope Janice takes you up on that offer.  I have had a few listings with reverse mortgages and had many challenges to deal with. 

From my personal experience of helping sellers, I am not a fan. But I know that this is a financial tool that may benefit a certain consumer with certain needs.

Apr 03, 2019 07:00 AM #13
Rainmaker
2,420,158
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

I hope that she will indeed take you up on that and write some posts about it, I would like to learn more about reverse mortgages too!  I will look for a CE class that discusses the topic.

Apr 03, 2019 07:36 AM #14
Rainmaker
3,491,621
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Carol. I hope that Janice takes you up on your offer. I would enjoy learning more.

Apr 03, 2019 07:56 AM #15
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Carol, I did the same with a local lender a couple of years back.  While they're not the right loan tool for everyone, they do have some upside in the right circumstances (especially if one isn't worried about leaving a large asset for heirs).  There's potential to use a HECM loan to basically double a buyer's buying power.  I've not had a client opt that route yet, although I know some local builders make use of them. Bill

Apr 03, 2019 07:57 AM #16
Rainmaker
3,043,225
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Carol, I know of three lenders that are featuring them all the time at our local board.  More people should look into them.

 

Apr 03, 2019 08:49 AM #17
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Paul S. Henderson, REALTOR®, CRS 
It's the first day of golf league for the season so it will definitely be a good day, regardless of the final score. 

Apr 03, 2019 09:20 AM #18
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Roy Kelley 
They definitely have their purposes, don't they?  It takes knowledge to make an educated decision. 

Apr 03, 2019 09:21 AM #19
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Sheri Sperry - MCNE® 
I just had a friend sell a home to get out of a bad reverse mortgage.  She didn't really understand how it worked when they got involved.

Apr 03, 2019 09:22 AM #20
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Brian England 
It is an interesting subject.  Not that agents make loan recommendations but I believe it's good to have a basic knowledge so we don't discourage people from doing something that might be a good fit for them. 

Apr 03, 2019 09:24 AM #21
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Sheila Anderson 
I hope she does too!  As we were talking, I could envision a very nice series of posts.

Apr 03, 2019 09:26 AM #22
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Bill,
With knowledge a person can make an informed decision whether it is or isn't the right way to go. 
Liz and Bill Spear 

Apr 03, 2019 09:27 AM #23
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Will Hamm 
Might be worth your while to sit down with one of them over coffee like I did. One more thing for your knowledge bank. 

Apr 03, 2019 09:28 AM #24
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Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

HI Carol  - the 'girls' got together the other night for HH and this is one of the subjects we discussed. I've always been a bit skeptical of reverse mortgages but apparently there are sound reasons to consider it. I also look forward to reading a series of posts on reverse mortgages. And starting with how they can be used for wealth building is intriquing to me.

 

BTW the gals say hi

Apr 03, 2019 10:06 AM #25
Rainmaker
1,266,864
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Anna Banana Kruchten CRB, CRS 602-380-4886 
Darn, I missed Happy Hour!  Did you go to Pappadeaux's? 

Apr 03, 2019 11:04 AM #26
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Carol- I know very little about them but I've always been skeptical of them, and not for a particular reason. I too hope that Janice will write some posts for us here and share her knowledge. 

Apr 03, 2019 12:00 PM #27
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Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Carol, I'm interested! Similar to 1031 exchanges, only in that they keep changing and are misunderstood. I have come upon reverse mortgages occasionally in my past work, but the buyers of our very expensive home had (have) gobs of money and did a "reverse mortgage for purchase". They just sold it for about $200K more than they paid, 4ish years ago. The husband has made lots of money in his businesses and he knows money so I'm sure he chose to do this to "keep" his money and maybe not pay capital gains tax. Who knows? Let's hope that your friend, Janice can clear up some of those mysteries. I had never heard of a reverse mortgage for purchase (and oddly enough, the first company this couple went with, it didn't fly and we had already moved out and they had already moved in! Talk about some stressful moments!!) 

Apr 03, 2019 12:27 PM #28
Rainmaker
2,189,278
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

My personal feeling about reverse mortgages is they are expensive and often seniors are hoodwinked into taking them out without truly understanding how they work. I don't like the people who sell them, either, because so many take advantage of people in distress, and the whole thing doesn't sit well with me.

On the other hand, I have a few friends who have benefited from a reverse mortgage because they had no other option. A friend in Hawaii used a reverse mortgage to buy her house because it preserved cash and she has no heirs.  But those are few in the overall scheme of things.

Apr 03, 2019 04:08 PM #29
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Carol Williams

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