I had a meeting this morning with an associate friend who is a financial consultant for a large, well known bank. He called me yesterday because he is seeing a real influx of seniors coming to him with some real financial needs. John and I have known each other for over a year, and because of our association, he has a very good understanding of reverse mortgage, but he had some very specific questions which relate to people with whom he has recently come in contact. I thought it would be a good idea to share the questions and answers with you, since maybe you have similar questions.
One question John asked was if a couple may apply for a reverse mortgage even if one is hospitalized, possibly indefinitely. The answer is yes. As long as one of the borrowers is residing in the home securing the reverse mortgage, the rules of obtaining a reverse mortgage are met. This is also true for folks who have already obtained a reverse mortgage. The stipulation that the home is your “permanent” residence is met when any one of the borrowers does so.
This led to the natural follow up question; What defines the home as a “permanent residence”. Most simply put, you may not be gone from the home for longer than one year. Whether it’s for an extended vacation, health reasons, or anything else, you may be out of the home for as long as one year before the loan would be considered mature.
Another great question John asked is if the terms and payout of the loan will adjust should the home value drop after the loan is funded. The answer is no. Even if the value of the home plummets from where it was when a reverse mortgage was obtained, the terms at origination will not change. The only thing which can adjust during the life of the loan would be the interest rate unless, of course, you obtained a fixed-rate reverse mortgage. Just remember that if the value of the home decreases as a result of being in a significant state of disrepair, the loan may become due as this could be considered not keeping your end of the agreement.
One very important thing that I offer John is something he hadn’t thought of. He works for a bank which does not offer reverse mortgages. If their customers inquire about a reverse mortgage, they simply say they don’t provide them. This effectively sends their customers to a competitor who would not only love to fund their loan, but also try to lure them in for all their banking needs. Because I do not work for a bank, John and his colleagues can confidently, and without conflict, refer their customers to me. When the borrowers receive payments from their reverse mortgage, they will go directly into their accounts with John’s bank, not the one across the street.
If you currently work for a bank which does not offer reverse mortgages, I’d love to partner with you keep your depositors where they belong…with you. Give me a call or send me an email, and let’s work together to serve your customers they way they deserve.
If you’re looking to get a reverse mortgage and your bank doesn’t offer them, you might be a little hesitant to go into a “foreign” bank’s branch office to speak to someone who might only see you as a dollar sign with legs. Give me a call, and I’ll come to you…to your home field. I’m not looking to pull you to a new bank. I simply want to help you stay where you’re comfortable. Your bank, and your home. For your advantage.
