“It’s Like Learning a New Language…You Learn The Bad Words First.”
I was recently sitting down with a client who was considering a reverse mortgage. I was explaining to him the in’s and out’s of the program so he could determine if it was the best course of action for him during his retirement.
He had heard about the reverse mortgage program before–all bad things of course–from various news sources as well as friends and acquaintances. Things he realized were myths by the end of our meeting.
To me, this was nothing new.
It’s something I have to deal with, day in and day out, but I do it because nothing is black and white, especially the reverse mortgage program’s portrayal in the media.
Have there been negative stories associated with the reverse mortgage program?Yes. What I have found though, is that most of those loans were made way before FHA stepped in, and these loans were made by private lenders or “big name” banks that worry about the bottom line first, before the consumer is ever on their mind.
This negative stigma is what continues to make the reverse mortgage an under-utilized lifeline.
There are many cash poor, house rich retirees who are forced to downgrade their lifestyles, and make sacrifices during retirement, just to get by. When they consider a reverse mortgage, however, all they find is the negative stories, while the success stories continue to be buried because they simply aren’t “newsworthy.”
It’s not about being financially desperate either because a reverse mortgage line of credit option can be used as a retirement planning tool as well. All the benefits, however, aren’t considered by consumers because all they read online makes them weary of ever even considering a reverse mortgage.
When I was done explaining everything, my client said to me, “it’s like learning a new language, you learn the bad words first.”
This made me laugh. It’s something I had never considered but it makes sense, especially with reverse mortgage. He continued by saying that all the bad things he had heard about the reverse mortgages had come from the working consumer class and they’re reasons for not doing it were always the same, “they’re going to take my house.”
When he asked successful business people and financial planners though, they all agreed that it was the best course of action for his situation.
In the end, it’s all about client perspective and how far they are willing to go to educate themselves about big life decisions. Taking a back sit and listening to everything someone else says is not the best course of action, ever. What you find out on your own will always be more valuable because you made the decision for yourself. Consider the facts and make sure that what you think comes from you, not from someone else.
When you’re learning a new language, don’t just learn the bad words, learn the other words as well. It makes all the difference.
Click here for more information about the elimination of the reverse mortgage program as we know it: