The so-called advisors who sell reverse mortgages to seniors who do not need a reverse mortgage ARE the problem. The fact is, a reverse mortgage is one of the best financial products you will ever see. Unfortunately, I have never seen a financial product get so much bad press in all my life. Payday loans aren’t even scrutinized this much! When is the mainstream media going to stop blaming the product and start blaming the people who sell it??? Every financial product has a time and place when it can be used to the benefit of a consumer. If that weren’t the case, then it wouldn’t exist. However, that gray area between ‘good for the consumer’ vs. ‘good for the salesman’ isn’t regulated nearly enough. Not by the Government or the Media.
Use this story from CNBC as an example. They mention several times while airing the story that the reverse mortgage salesperson should have never put this couple in a reverse mortgage, yet the journalist and talking-head put the blame directly on the reverse mortgage product instead! Why?
The answer is easy. It makes good TV when they point out people scamming seniors. The story of a salesman who sold a product someone didn’t need, so he could make a commission…? Too many people live that story every single day…not interesting enough.
What you need to know about a Reverse Mortgage:
– Never take a spouse or intended co-borrower or property-owner off title to qualify for a reverse mortgage. That’s a big no-no and huge red flag if anyone ever advises it.
– Do not take money out of a reverse mortgage unless you need it. You can get a credit line, then use it if necessary. The credit lines will also grow at a guaranteed compounding rate of return, which is an incredible financial tool and almost an insurance policy against running out of money in retirement.
– If you want to take money out of a reverse mortgage, the monthly option is the best way to go about it. The monthly payment you receive will continue the rest of your life! That’s so much better than taking a lump-sum up-front and hoping that will be enough to last.
– You should also know the lump-sum option pays the reverse mortgage advisor the biggest commission so be careful about getting angled in to that option.
The best possible weapon you have when looking in to a reverse mortgage is working with a trusted advisor. I’ve seen plenty come and go in that industry over the years, but one person really stands out as being the most ethical and professional I have ever spoke with or worked with… His name is Bruce McPherson but I call him Reverse Mortgage Bruce. He’s been doing reverse mortgages for 10 years. Call Bruce directly at 866.223.7174 if you need a Reverse Mortgage in San Diego.
Listen to today’s show here: