Again, It’s All About Timing

1020_sa_biz_bizb.jpgIn most big decisions that we make, much of it has to do with our timing. Whether it is buying a car, purchasing a home, refinancing our mortgage, or remodeling our home, timing is everthing. It is no different with decisions regarding reverse mortgages, and thus with one of my most recent discussions with a prospect.

Throughout my interview process, it is important for me to get a handle on several things about wishes and desires of my clients. What are their goals? Do they want to stay in their home for an extended period of time? What is their current income? Are they currently working? What is their current financial situation? These are just a few of the questions I ask to help determine if the situation is right for them to enter into a reverse mortgage. If done too soon, it may put them in a difficult situation later on.

Many most recent client is a nurse. She works part time earning about $1,000 per month to supplement her social security income. She is 63 years old and sees herself working for the next 5+ years. In evaluating her current situation, she is not in such a tight financial position where she needs to have more incoome. Her current financial situation should take care of her for the next few years without too much problem. Yes, she would like to have some extra money for the unexpected events, but it is not pressing for her. At 63 years old, the greatest benefit for her would be to pay off her current mortgage. With the little amount left over, it provide her with a small line of credit, or an income of a couple hundred dollars more per month, which she really doesn’t need at the moment.

Together we decided that it might be in her best interest to wait. Why so, you ask? With reverse mortgages, the older the age, the more one can receive. In fact, the average age is roughly around 72 years old. Though everybody’s situation is different, it seems to be the age when the financial crunch hits people the most. Medical expenses and liquidity become the most pressing issues.

It is important to evaluate each situation carefully. Not only do I feel better about the purchase, but the client usually very much appreciates the assistance in evaluating their options. It may mean, in this situation, that a simple refinance of their current mortgage will free up some extra cash each month which may hold them over for a period of time. The only thing one does not want to do (if they are looking for a reverse mortgage in the future), is to NOT do a cash-out refinance. Once they start dipping into the equity, it may move them out of the possibility of doing a reverse mortgage later on.

Selling reverse mortgages is not really about selling at all, though that is what we call it. Acting as a consultant and doing what is in the best interest of the senior client is what reverse mortgage sales is really about. It makes me sleep better at night!

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