Mortgage questions, answered
Real questions borrowers ask, answered in plain English by The Mortgage Advisory, a mortgage lender and broker licensed in California, Texas, Florida, and Colorado (NMLS #1549739).
6 answers in For Financial Pros
Clear searchHECM line of credit or cash reserve: which is the better buffer for a down market?
Both can keep a client from selling investments in a down market. A cash reserve is simple but earns little and can drag on long-term returns. A HECM line of credit costs money to open, but the unused credit grows over time and nothing is owed until it's used. Many planners use both. The Mortgage Advisory gives financial professionals written HECM numbers so they can model the line alongside the portfolio.
How do I bring up a reverse mortgage with a client without it sounding like a sales pitch?
Start with the client's goal, not the product, and with what the rest of the world already knows: in South Korea, Switzerland, and Sweden, a reverse mortgage is called a housing pension. Ask how they feel about their mortgage payment, a down market, or staying in the home, and introduce home equity as one more resource in the plan. Share a plain-English article first, then bring in a lender for the numbers, with you in the room. The Mortgage Advisory offers financial professionals free case reviews and never offers or accepts referral fees.
What information do you need for a reverse mortgage case review?
Five details are enough for a solid first look: the ages of the client and spouse, the home's approximate value, the mortgage balance, the state, and what the client is trying to accomplish. No names, Social Security numbers, or documents are needed for a case review. The Mortgage Advisory gives financial professionals a written estimate and an honest opinion on whether a reverse mortgage, HELOC, or refinance fits.
How do financial planners use reverse mortgages in real client plans? (Case studies)
Three common ways planners use a reverse mortgage: a standby line of credit so a client doesn't sell investments in a down market, a bridge that lets a client delay Social Security to 70, and borrowing against a long-held home instead of selling it, to protect heirs' stepped-up basis. The Mortgage Advisory models each one with the client's real numbers. These scenarios are illustrative, not client stories.
Does suggesting a reverse mortgage conflict with my fiduciary duty to a client?
Generally, no. Acting in a client's best interest means looking at every resource they have, and for most retirees the home is the biggest one. What matters is how you do it: document the analysis, compare alternatives, avoid any compensation from the lender, and let the client decide. The Mortgage Advisory never offers or accepts referral fees and provides written numbers you can keep in your file. Check your own firm's policies too.
Can a reverse mortgage pay for a client's in-home care?
Yes. Reverse mortgage money can pay for in-home care, home modifications, or a family caregiver, which can help a client stay at home longer and keep investments invested. The key risk is timing: if the client is likely to move to assisted living or a nursing home for more than 12 months soon, the loan may come due. The Mortgage Advisory helps planners weigh care needs against the loan's timeline.