Taking A Fresh Look At Reverse Mortgages

Recording | Slides

For most of their history, reverse mortgages have been rather unpopular with financial planners, due both to their relatively high costs, and the fact that they are typically viewed as a resource or tool of last resort. Yet the reality is that use of reverse mortgages has exploded over the past decade, aided more recently by a newer, lower cost option, and several recent research articles in the Journal of Financial Planning have shown ways that reverse mortgages can be used proactively to enhance retirement income sustainability.

In this presentation, we review the technical mechanics of HECM reverse mortgage loans, the costs involved, the emerging reverse mortgage strategies and applications that should be considered for clients, and the caveats and concerns that remain.

Learning Objectives:

  • Discuss the requirements for someone to be able to use a reverse mortgage.
  • Understand how a reverse mortgage works and list the various “triggering events”.
  • Explain the costs associated with a reverse mortgage.
  • Describe the tax treatment of reverse mortgages.
  • Discuss when a reverse mortgage may a good idea and when it may not be ideal.
  • Identify the caveats and concerns of reverse mortgages.