For Professionals

Senior adults (65 and over) are one of the fast growing populations in the United States. Many of them face unanticipated financial challenges, including living longer, caring for aged parents and providing for retirement. They often rely on their advisors to provide them with guidance as they plan for the contingencies of their future.

A Reverse Mortgage can be a practical solution for stretching retirement income while providing your clients peace of mind. Homeowners with sufficient equity can borrow on their property’s value to provide much needed income for

• Home improvements that will allow them to live in their homes independently if they have disabilities
• Funds to help grandchildren with college expenses
• Funds for health care expenses, including in-home health care.
• Funds for life-time income—as a monthly “paycheck”

What if my client needs to go to a rehabilitation center or nursing home temporarily?

As long as the borrower’s stay at the rehabilitation center or nursing home does not exceed 12 continuous months, the reverse mortgage remains in effect. If the period of rehabilitation exceeds 12 months, the policy could become due and payable. The borrower can sell the house and use the proceeds to pay off the loan, keeping the remaining proceeds for future needs.

Can the borrower be forced to sell the home if the money he owes on the loan exceeds the value of his property?

No. Home Equity Conversion Mortgages, as these are called, are insured and guaranteed by the Federal Housing Administration (FHA). The borrowers can stay in the home for as long as they wish or are able, without having to sell, move, give up title, or take on new monthly mortgage payments. As long as the borrower (or spouse, in the case of a couple who co-own the property) continues to occupy the home as the principal residence, he or she will not have to sell or vacate the home—even if the total of the payments, plus interest, exceed the value of the property. Federal regulations prohibit a deficiency judgment should these circumstances occur. There will be no debt to your client’s heirs. The policy remains in effect until the survivor moves, sells the house or dies.

The staff at Bay Area Reverse Mortgage would be happy to meet with you to answer any general questions or assist you with a specific client’s situation. In addition, we offer periodic workshops for attorneys, financial planners, clergy and other professionals advising senior clients.  If you are interested in a presentation, or a one-on-one meeting with a member of the Bay Area Reverse Mortgage staff, please contact our business manager, Yolanda Lane at (510) 221-7525 or by email to ylane@bayarearm.com.