For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.I've received a great many calls and e-mails lately from coaching clients regarding seniors who "just won't make a decision right now about the reverse mortgage." Those readers who know me are fully aware of my typical advice in this situation: "Look in the mirror."
Most of the time when a senior prospect has not reached a decision it is because we as the originator have not provided enough compelling information to help them decide. That would be my typical response. However, in this unusual time and in this unusual market, it may just be that the senior is so inundated with negative news stories and the "gloom and doom" that's out there every single day, making a decision really does become next to impossible. How to counter this? I like to use the line of credit option in the reverse mortgage.
"Why the line of credit, Sue?" you ask. It's quite simple. The line of credit option within the reverse mortgage offers so much flexibility that it's often a very good choice, but even more so now. For example, is your senior prospect concerned that property values will continue to decline in his/her area? The line of credit may be the answer.
By closing on a reverse mortgage now, today's appraised value is used, as opposed to a value six or eight months down the road. The line of credit will continue to grow, no matter what the market does in the area. Anybody remember when forward home equity lines were being frozen? This growth can be a hedge against a decline in property value in the near future and it can be a safety net for future needs in the long term.
Many of my clients have opted for the line of credit option and use the growth it provides each year to pay annual expenses such as real estate taxes and homeowner insurance. The principal in the line can remain untouched, preserved for an unforeseen expense.
Is the senior concerned about a potential job layoff in the near future which could severely impact cash flow? Here's the line of credit option to the rescue. How about the future of Social Security, increased Medicare premiums, etc? Once again, the line of credit is the answer.
Do you use the amortization schedule as a sales tool? It can be the best illustration to make your case in these situations. Use the tools at your disposal and always think about your senior clients' needs, and you'll continue to position yourself as the local reverse mortgage expert.
Sue Haviland is a reverse mortgage consultant in Baltimore and the founder of Reverse Mortgage Success, a leader in the training and education for originators around the country in the rapidly growing reverse mortgage arena. Ms. Haviland has worked in the lending industry since 1981. She has been originating reverse mortgages for the last six years and still originates loans every day. She has helped hundreds of families all over the country in the last several years. She also shares her knowledge of this market in presentations before the Women's Council of Realtors, Mortgage Bankers Association, National Association of Professional Mortgage Women, and SRES - Senior Real Estate Specialists, Brian Sacks' Insider Seminars, as well as the public. She is a Certified Senior Advisor and is active in many professional organizations. Sign up for her free seven-part mini-course at
