Financial Planning – Plan B

42-15717826Recently I have been meeting with several financial advisors, many of which have not considered a reverse mortgage for their clients. It certainly makes sense that the profession has rarely looked to home equity as a source of financial planning. In fact, I am well aware of the compliance issues that are there for advisors. Many of which are based on the old view of investing equity. . .  never a good idea. However, in my conversations with experienced advisors, they are beginning to see the opportunity for their clients. It often is seen as Plan B. With portfolios deteriorating 30-40%, the reverse mortgage is a great Plan B. There may not be enough time to wait until the markets fully re-establish themselves.

The biggest concern that I’ve seen among these financial advisors has been the risks involved with reverse mortgages. These risks are virtually gone. The biggest risk being that the borrower needs to be aware that there may not be any equity left at the end of the reverse mortgage. Being that they can never owe more than the value of their home (FHA Mortgage Insurance covers this), their heirs and estate are protected. With a lot of guarantees, this program is definately something to learn more about.

Explore posts in the same categories: General

Tags: , , , , ,

You can comment below, or link to this permanent URL from your own site.

One Comment on “Financial Planning – Plan B”

  1. The reluctance to let go of home equity is the biggest enemy found in advertising reverse mortgage. But we must get real. Financial world is at their low level and may keep on deteriorating. With all the regulations and protections available, I think it is time for people to learn more about reverse mortgage and decide for themselves whether this will be a good answer, or not.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: