Seniors, Elderly And The Reverse MortgagePosted on September 15, 2014 by ElderCare Resources Phoenix in Blog, Financial Services, Independent Living
Reverse mortgages can be godsend for seniors
By Ryan Smith
When originators are considering adding a product to their mix, it’s only natural to consider the advantages to their business. But in the case of reverse mortgages, it’s also important to consider the advantages to the customer.
“First and foremost, there’s really no product in the world like a reverse mortgage,” says Jonathan Scarpati, vice president of Urban Financial of America’s wholesale division. “I don’t think there’s another product in the world that will allow you to borrow money and not make a payment. It’s a huge advantage to a senior. Many of these people don’t have the income to qualify for a loan – but this is based on age and equity. It allows them to tap into that equity without having to make a payment.”
Some seniors are leery of reverse mortgages because of horror stories about elders losing their homes. But those stories leave out one important fact.
“The only requirement of the program is for the borrower to pay their taxes and insurance. Even if you’re not in a reverse – if you don’t pay your taxes and insurance, the county’s going to take your house from you regardless,” Scarpati says. “So the requirements aren’t any more or less than any senior would have just living in a home.”
And the advantages for seniors are numerous. A reverse mortgage can give older borrowers the opportunity to improve their quality of life – or access to ready cash when they need it most.
“One of the greatest parts about releasing the proceeds is that the proceeds can be used for anything and everything the borrower wants,” Scarpati says. “We have seniors using the proceeds simply to travel, go see the grandkids they don’t normally get to see. You could use the money for medical expenses. You could use the money for long-term care or estate-planning options. Long-term care is a big one, because there’s a tremendous need for long-term care insurance, but most people can’t afford it. Here’s a great way to unlock some cash that can pay for something really important in your senior years.”