Reverse mortgage loans are widely misunderstood, and many homeowners and advisors have a strong negative bias against them. Unfortunately, those misconceptions and preconceptions hold back many ideal candidates from ever considering a reverse mortgage.
Today’s reverse mortgage loans are not the same as they were even a decade ago, and it is to your advantage as a trusted financial professional to take a fresh look at them, as they can often be a viable solution to many of the financial challenges that retirees face.
The aim of this piece is to help you understand both common, and somewhat less common, questions about reverse mortgages. Armed with the facts, you will have a much clearer picture of whether a reverse mortgage might be right for older-adult homeowners you advise.
Note: Most, but not all, reverse mortgages today are a Home Equity Conversion Mortgage (HECM), the only reverse mortgage insured by the Federal Housing Administration (FHA). This article refers only to the HECM reverse mortgage.