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#26 A Reverse Mortgage Can Represent Value-Added Financial Planning Advice


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

You’ve been helping people manage their financial decisions for decades. Many of your clients are now in their sixties and seventies, and, needless to say, your discussions with them are focused around different issues from those you talked about ten and twenty years ago. Today, In addition to choosing, monitoring, and rebalancing their investments, your conversations are likely to include health costs, charitable gifts, and estate planning.

Partially due to increased television spots on the subject, you’re beginning to receive serious inquiries about reverse mortgages, and have begun to “study up” on the topic. While you have no intention of promoting any mortgage product, you want to continue offering comprehensive advice relevant to the changing needs of your clients and they enter and progress through their retirement years. For the majority of them, you realize, a significant portion of their wealth is in the form of home equity.

When raising the subject of reverse mortgages with several colleagues from different firms, however, you were taken aback to find a lack of knowledge and, in many cases, a negative opinion. Several labeled reverse mortgages as a very “expensive” option, referring to upfront fees, but were unable to provide you with information about either those fees or the various ways in which housing wealth might solve specific problems clients face. While you want to avoid going deep in the weeds discussing a product in which you have no specialized training, you want to offer answers to client who trust you to follow up on their inquiries and explore solutions to issues they face.

When you as a financial advisor see something in client’s situations that is draining cash flow and you believe a reverse mortgage might serve as a tool, you should certainly recommend they speak with an experienced mortgage broker. Meanwhile, the more you continue to learn about the product and about the different ways to use it, the more targeted and appropriate your advice can be.

* The Financial Planning Association (FPA®) is working on a plan to educate financial planners on the opportunities that reverse mortgages may present as part of a comprehensive financial plan.