Training Nonetheless Stays A Hurdle For Potential Reverse Mortgage Debtors – NMP
The reverse mortgage industry has made some strides in educating its borrowers about the products on offer and how they can meet the needs of retired people. However, a report by Reverse Mortgage Daily ‘s Chris Clow highlighted some negative statements from potential borrowers published by the Washington Post.
It is clear from the first comment that people are actively looking for reverse mortgages as a retirement plan, but stopped when they encountered some negative points.
“A few years ago, I almost got a reverse mortgage with my wife. The thing that stopped us was that I had a low credit rating and the amount of money we had access to was pathetic. It was also expensive: only if the property market burns will the heirs only have a house value left after 15 years, ”said one commentator, according to the Washington Post report. “We literally couldn’t find anyone out of five financially savvy people we spoke to who would speak positively about reverse mortgages. In some circles, those receiving reverse mortgages are considered ‘poor’. “
“I think financial advisors working with clients who are about to retire should strongly encourage them to get a ‘cash out refinance’ before they quit their jobs (and lose income). This would avoid the pressure to take out a reverse mortgage and put their clients in a stronger financial position. We ended up doing that. This is a bogus idea (for many reasons), but compared to a reverse mortgage loan, it may be better to take a job long enough to qualify for a “cash-out refinance” (if your health allows). . “
In his analysis of the report, Clow points out that the Washington Post failed to include statements from an actual reverse borrower, but does not deny that those prospects are completely invalid. He added that the stories shared by the publication are not new or isolated.
“Rather than expanding the roof of reverse mortgages, recent data metrics seem to suggest that the industry’s fastest growing line of business is refinancing transactions that are being made by customers already engaged in the product category to take advantage of the current low interest rate environment,” said Clow in his report.
Read more about why this affects the evolution of the industry.