I have had clients in the past tell me that reverse mortgages are confusing, and I do not disagree, they certainly can be confusing.  With that being said, I would like you to imagine this…you are hungry, but you do not know what you want to eat.  So, you go to the grocery store, and you walk down every aisle to see all your options before deciding on what you want to eat.  Do you think after walking down every aisle, you would have more clarity on what you want to eat, or would you be more confused?  I would personally be overwhelmed with options and would walk out buying nothing and drive to the nearest drive-thru for a burger and fries.  Why?  Because when we are overwhelmed with options, we become confused and ultimately do nothing and we simply do what is comfortable and go back to our old habits.

The same thing can happen when learning about reverse mortgages and comparing options.  Sometimes prospective clients become overwhelmed with information or the options and decide that a reverse mortgage is not right for them, and they simply go back to a traditional mortgage and make mortgage payments for the rest of their life even though that does not help them to achieve their goals.  Is that the best outcome for the client? In most cases it is not.  However, making a mortgage payment (or owning their home free and clear) is familiar and comfortable, even though it could be financially detrimental.  At the same time, the reverse mortgage is likely a better option for them and will allow them to live a better life in retirement.

So how does grocery shopping relate to reverse mortgages?  We must first understand that a reverse mortgage is a tool with multiple ways to utilize it.  As a matter of fact, I refer to a reverse mortgage as the Swiss army knife of mortgage products because it is in fact a “multi-tool”. There are many ways to structure a reverse mortgage to achieve different goals.  Therefore, if a client walks into my office and I simply tell them all the different ways a reverse mortgage works and all the different options they have to access their equity without asking any questions, they will most likely become overwhelmed and confused.  Therefore, I feel that it is extremely important to understand the client’s goals (both short-term and long-term).  I also work to understand their concerns and what keeps awake at night.  Once I have a better understanding of each of these items, then I can advise the client on the best tool or strategy on how to use the reverse mortgage most efficiently.  If I do not ask good questions, I cannot understand the client’s goals, or their concerns and it is possible that a client can become overwhelmed and does not do the reverse mortgage which could be financially detrimental. 

Imagine this situation, you injure your wrist, so you go to the doctor.  When you meet with the doctor she says (without asking any questions), “Here are the options: we can take an x-ray, we can put on a cast, we can provide you an antibiotic in case of an infection, you could take an over-the-counter medication like Advil or Tylenol, or we can do surgery to open it up and see what is wrong.  How would you like to proceed?”  If I was the patient, I would run out of that doctor’s office as fast as possible and never go back to that doctor ever again.  This should never actually happen because this would be considered malpractice and the doctor would lose their license and possibly even go to jail.  So instead, what happens normally is the doctor asks a lot of questions and feels around the injured area and does some investigating first and uses their training and experience.  By process of elimination and after asking you several questions, the doctor then provides you with a prognosis and a recommended course of action. 

I am not a doctor, but I do feel that the same principles and process should apply in the mortgage industry. When speaking with a prospective client, I am going to ask several questions and the more clarity we can both have on their goals, dreams, concerns and what keeps them at night, the better advice that I can provide to the client and help to create the most efficient retirement strategy for them. In many cases a reverse mortgage ends up being the perfect program to meet their goals and dreams.  However, there are also times when I do not recommend a reverse mortgage and suggest another option instead.  This is why it is always best to speak with a local reverse mortgage specialist to evaluate your situation and review the options.