“Get ready to discard old notions of who a needs-based borrower really is,” comments blogger Shannon Hicks, explaining that house-rich, very cash-poor retirees used to be the ones who turned to reverse mortgages, making ends meet by eliminating their monthly mortgage payment. In contrast, today’s retirees, she explains, may have six-figure – and better – retirement portfolios from which they take monthly draws to supplement their Social Security benefits.
All well and good, but couples like the Wilsons, Hicks says, are finding that inflation has increased their monthly expenses by 11% (their financial advisor has had to break the news that their savings are likely to last only another nine years). A reverse mortgage for the Wilsons will indeed be “needs-based”, Hicks observes, but not because the couple is devoid of assets. Inflation is simply eroding their buying power and causing them to feel “the pangs of need”.
Actually, what the savviest financial advisors are coming to realize is that housing wealth can be used to satisfy a variety of both “wants” and “needs”, even for clients whose monthly income is more than sufficient to keep up with the rising monthly costs. Reverse mortgage proceeds have been used to finance the purchase of a sunny-climate winter home, for charitable bequest, for business launches, grandkids’ education, even for new starts following a “gray divorce”.
Financial advisors should most certainly, “get ready to discard old notions about who a needs-based borrower really is”. On the other hand, it’s high time to recognize that reverse mortgages represent financial tools well worth affluent clients’ consideration to satisfy some of those not-their-fathers’ needs-based “wants”..
https://mutualreverse.com/david-garrison
David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]
2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894