Residential Magazine

Reverse Mortgages Pave the Way Ahead

Access to home equity can help clients achieve goals later in life

By Lorraine Geraci

It’s a maturing nation. There were more than 52 million Americans over the age of 65 in 2018, and by 2060, there will be an estimated 95 million people over 65. People are living longer and, in many cases, that means they are outliving their funds.

Financial challenges can prevent or limit a retiree’s goals from coming to fruition. These goals can include maintaining good health, getting involved in hobbies or volunteering, overseeing home improvements or modifying the home to age in place, enjoying family, traveling or maybe even starting a new side-hustle business.

Because the retirement landscape can be rocky, people need to learn about using home equity as a tool to assist with retirement goals. Originators can help their clients by educating them on reverse mortgage products and services.

Unforeseen needs

Whether retirement planning was not as successful as one hoped or an unforeseen need for retirement reserves occurred, many retirees are looking for different ways to fund retirement goals without depleting hard-earned assets. Many thought they were comfortable with their saved assets when they realized it was not nearly enough.

Some people have assets in other aspects of their financial lives and would rather not deplete them due to market fluctuations and/or penalties. Here are some trends that may surprise you:

  • Less than 40% of retirees are financially prepared for retirement.
  • About 55% of households ages 55-64 had less than $25,000 saved for retirement.
  • Many people entering retirement are still paying a mortgage on their home.
  • Some baby boomers are part of the sandwich generation, financially assisting their children and parents in tandem.
  • Long-term care will become an even more needed resource and health care cost trends show expenses are sure to increase.
  • The “silver divorce” trend — the divorce rate for couples over 50 has increased 109% since 1990.

Opportunity awaits

Sales professionals in the mortgage, real estate and financial adviser fields need to be somewhat focused on the retirement market. If they aren’t, they could be missing a huge opportunity to assist the largest demographic that will need housing choices and retirement resources in the years to come.

Reverse mortgage programs can be an amazing opportunity to help retired homeowners with many things. These loans can be used to purchase a new home, fund long-term health care, assist family members, supplement retirement income or just to have a standby line of credit.

Reverse mortgages were originally popularized in the mortgage market in the late 1980s and early 1990s. There are a variety of reverse products out there to fit the needs of many individual homeowners. Home Equity Conversion Mortgages (HECMs) from the Federal Housing Administration (FHA) and other lender-specific, proprietary reverse products have a place in the market. Proprietary reverse mortgage programs are usually designed to accommodate higher-value homes or properties that do not fit under the HECM criteria.

Purchasing a new home with a reverse mortgage instead of a conventional loan may provide the retiree with an opportunity to almost double the home value they can afford and to have no monthly mortgage payment obligation.

Continuing education

Whether you are a mortgage professional, or any other business professional who has retired clients, knowing about reverse mortgages can help them and generate more sales opportunities for you. These loans have become sought-after products by real estate finance professionals.

Many reverse mortgage brokers or loan officers are partnering with Realtors and providing them with an education on how to double the number of sales and listings for a large demographic that will need housing choices. But obstacles and misconceptions still resonate in the reverse mortgage industry. Some homeowners, family members and business professionals have misconceptions about these loans — such as the homeowner must give up ownership rights, their heirs incur debt or the home needs to be debt-free.

Continuing education is helping the reverse mortgage industry make headway and is allowing people an opportunity to see how a reverse mortgage may be a good choice for those preparing to have the retirement they truly want. Allowing front-line professionals the tools and education they need to help retirees obtain their goals is what we are all working toward.

The conversation is changing around reverse mortgages to ensure there are relationships to educate retirees about these resources 

Serving others

The conversation is changing around reverse mortgages to ensure there are relationships to educate retirees about these resources. The reverse mortgage industry is an ever-changing pathway that is strategically flexible to sustain the longevity of its intention. It is exciting to see the number of people who are engaged in pursuing more information once they learn what reverse mortgages can do for their clients.

Lending institutions should continue to keep the doors open for educating and coaching sales professionals. Being reminded of the need, as well as the untapped market that can participate in a reverse mortgage, will always require new and creative ways to ensure more people are aware of the benefits.

Mortgage originators and other business professionals can experience the next level of sales by introducing their clients to reverse mortgage products. It’s amazing how many companies are still transaction-based, and many don’t know they are missing the most important aspect of the mortgage business — service to others.


  • Lorraine Geraci

    Lorraine Geraci is vice president of learning and development for Finance of America Reverse LLC. She oversees a team that focuses on training, learning systems, technical writing and video production. Geraci has more than 15 years of experience in the reverse mortgage industry. She has educated thousands of reverse mortgage professionals and Realtors nationwide on the use of home equity to help people get to work on retirement.

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