Welcome back to Late Boomers! We’re Cathy and Merry, your guides to creating your next chapter with passion, purpose, and possibilities. In this insightful episode, we dive deep into a topic that’s high on the minds of many Baby Boomers and their families: reverse mortgages, what they are, how they work, and whether they could be the financial solution you’ve been looking for.

Our special guest is Kevin Guttman, a senior mortgage broker, reverse mortgage specialist, and three-time Amazon bestselling author, with over 21 years of experience. As one of only a small number of certified Reverse Mortgage Professionals in the country, Kevin brings a wealth of knowledge, a transparent approach, and a passion for educating seniors and their families.

In this episode, we cover:

• What makes a reverse mortgage different from a traditional mortgage
• The top misconceptions and myths about reverse mortgages
• How reverse mortgages can provide financial flexibility without requiring you to leave your home
• Who makes an ideal candidate (and who doesn’t)
• Creative ways retirees are using reverse mortgages to improve their lives
• Key protections and recent regulatory changes that make reverse mortgages safer
• Impact on heirs and estate planning considerations
• Common mistakes to avoid and how to start the conversation with your familY

Whether you’re thinking about tapping into your home equity, seeking greater financial security in retirement, or simply want to learn about every option available, this episode is packed with actionable insights and compelling real-world stories.

Key Takeaways

• Reverse mortgages offer flexibility: you can access your home’s equity as a lump sum, monthly payments, or via a line of credit, with no monthly mortgage payment required.
• You do NOT lose ownership of your home, you remain on the title, and the only way the loan is repaid is through sale or refinance when you leave the home.
• Reverse mortgages are highly regulated and now much safer thanks to government reforms, mandatory counseling, and protections for non-borrowing spouses.
• This financial tool isn’t for everyone: It’s best for those planning to remain in their home long-term and can manage property expenses.
• Your heirs have options: they can pay off the loan, sell the home, or request extensions if needed, and there’s rarely pressure for a rushed decision.
• Education is key, don't fall for myths and misinformation, and always work with a trusted, experienced reverse mortgage professional.
• Start the family conversation early, and use the “toolbox” approach. Getting informed now means you'll be ready, even if you never need it.

If you’re a homeowner approaching or in retirement, or if you have aging parents, this episode is a must-listen. Listen now, subscribe, and share this episode with friends and family who can benefit from understanding their financial options.

For more resources, visit reversemortgagerevolution.com for Kevin’s free consumer guide, short educational videos, and to learn more about his Amazon bestselling book, “A Reverse Mortgage Changed My Life.”

Subscribe to Late Boomers so you never miss an episode filled with expert advice and inspiring stories. Remember, it’s never too late to create the life you want start exploring your next chapter today!

— Cathy & Merry

Mentioned in this episode:

Late Boomers is part of the eWomenPodcastNetwork.

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Welcome to Late Boomers, our podcast guide to creating your next chapter with passion, purpose and possibilities.

And we are your hosts, Merry Elkins

here and Cathy Worthington. And today we're diving into a topic that affects so many in our generation. Financial security, homeownership, and how to make the most of what you've built.

Well, many of us as baby boomers are sitting on one of our biggest assets, our homes. But at the same time, we're navigating retirement, rising costs and sometimes real uncertainty about the future.

Exactly. And for some, the idea of selling or downsizing doesn't feel right. Others want to stay in their homes but need more financial flexibility.

Yeah, that's really true. And that's where today's topic comes in. Reverse mortgages. It's something people have heard about but really don't fully understand.

There are a lot of misconceptions out there and also some real opportunities. So if you have the right information.

So today we're bringing in an expert who can help us separate fact from fiction and really understand how this works.

Our guest today is Kevin Gutman, a senior mortgage broker. We're reverse mortgage specialist and three time Amazon bestselling author.

And with over 21 years of experience, Kevin is one of only a small group of certified reverse mortgage professionals in the country. He's known for his integrity, transparency and people first approach.

And he's passionate about educating seniors and their families so they can make confident financial decisions.

Kevin, welcome to Late Boomers.

Thank you. So glad to be here.

We're really glad to have you.

Yeah. Kevin, let's start with the basics. What exactly is a reverse mortgage and how is it different from a traditional mortgage?

That's a great question. You know, it's so similar to a regular mortgage. Some of the differences are a payment's optional, there's no payment required, a monthly payment's optional. And with the reverse workers, you can actually get your equity, get access to some of your equity, either lump sum, monthly payments paid to you or a line of credit. And we can break those down as we continue talking. But it's also a non recourse loan. What that means is the only way the lender can collect the mortgage balance due when the last person moves out is to the sale or refinance of the property. So no debt is passed on to the heirs, the borrowers or their estate.

Because it's non recourse, they're not personally liable for the note like every other mortgage. So those are the main differences between a traditional mortgage and a Reverse mortgage. A reverse mortgage is just much more flexible, especially as you ladies mentioned, for people in or approaching retirement. They just want that certainty, that financial security of having a payment that can be made or not made, accessing equity should they need it. So in a nutshell, that's kind of how it, how it works and what it looks like.

Well, why is this such an important conversation that baby boomers need to have right now?

There's a couple reasons why, Merry. Baby boomers are healthy, they're living longer. The number one concern they have is outliving their, their resources. So what we say is everybody has three buckets of money that we draw from wages or income. Social Security bucket one. Number two is assets. Number three is investments. But when people tap into equity, that allows all the others to last longer.

And as you mentioned in the open people, the vast majority of people's net worth is locked up in their home, in their equity. And there's only really three ways any of us can get access to it. We sell and, you know, get our money up and have to live somewhere, or we do a cash out refinance or a home equity line of credit, have a monthly mandatory mortgage payment, or we do a reverse mortgage where we can unlock some of the equity, but the payment's optional, it's not mandatory.

It's interesting because of course, if you sell you, your home has usually gone up in value, at least it has in California. And then you get hit with capital gains. So that's usually not real great. I mean, capital gains are huge out here. But there are a lot of misconceptions out there about reverse mortgages. So what's the biggest myth you hear about reverse mortgages?

You know, it's funny because the program has been around since 1961. A widow could no longer afford to stay in her house and make the mortgage payment. She knew a local banker because her husband was the football coach for the town banker, played football for the coach. And so the banker went to his, his bank and said, look, I know this family, know this lady, and what if we suspend her mortgage payments and we take interest each month from her equity so she can stay in her home? And thus the very first reverse mortgage was born. Here's the answer to your question. From 1961 to 1988, these were not regulated. So lots of companies had a version of a reverse mortgage. It was kind of like the Wild West.

No regulation, no guidelines, no uniformity. And honestly, some people got taken advantage of, some people lost their home. They had to sign over the title.

And.

And people still think that today. Yeah, I know. I have to sign over the title to my house. You do not. It's just like any other mortgage, you're on title. You have a lien attached to the property, and it's due when the last person moves out permanently. So that is the number one misconception, is people lose title or lose ownership of their home. That is not true.

Has been true for, well, 1988 till now. What is that, 38 dips?

Well, that's. This is really important to me personally, because I have two sisters, one who has a reverse mortgage, and her kids are trying to pay it back, so they inherit the house. And then my other sister refuses to do it. She says it's a terrible thing and she wants the house. She has a lot of. She has several different mortgages on the house. And so she doesn't feel that it's good for her because she wants to leave whatever's left to her son. So tell us, first of all, help me clarify that.

And also, who is the ideal candidate for a reverse mortgage and who is not?

Yeah. So, you know, Merry, it's true there will be less equity at the end. Because I remember a friend of mine I work with, he met with the family of a person who had a reverse mortgage but now had moved out and the loan was due. And the son of the grandson, I don't remember, was upset because mom or grandma had gotten a reverse mortgage. And my friend Shane said, well, did your mom have a 401k or an IRA? Yeah. What happened to that? Well, she spent it. Okay, so mom got a reverse mortgage. Why? Because she needed some money to live on.

Right. That's what she had to do to continue to live in her home. By the way, 91% of people want to stay in their home. They don't want to go live somewhere else. They like to age in place. I always ask people, how long are you planning to stay in your home? And the number, number one thing they say is, they're going to carry me out.

Right.

And that's true. We all love our homes. We don't want to move. We've been there for a long time. So to answer your question, there will be less equity at the end. But what I asked the family is, okay, what are mom's options? So she can. She can take in a border. Oh, no, they don't want to do that.

She can sell and move. Nobody wants to move. They all have a bunch of stuff in their house. They've lived for decades. They don't want to pack and move. It's a pain unless they have to. Or maybe the family's in a position where they can help. The challenge is that generation is raising their own family, sending their kids to college and they're maxed out with, with their own commitments.

So what I always say to people, Merry, is it's important to just learn about it whether you ever do it or not, learn how it works, understand how it works, and if you ever need it, it's there. So you know, rather than believe the, these media pundits like Susie Armand and Dave Ramsey, who are against them by the way, but they're not licensed, they're not up to date on, on the changes that have been made in recent years to make the program much safer for seniors and, but a lot of people listen to them and Dave Ramsey is great with the debt snowball, you know, paying off debt and Susie Armand is great with, with other topics. But this particular topic, they are misinformed and misguided and the misleading people. And it's really sad because like I say, a lot of people listen to them and trust them, but they're just not giving sound counsel when it comes to a reverse mortgage.

And I, yeah, I'm wondering if on a home that already has a mortgage on it, are you replacing the standard mortgage then?

Yeah. So a reverse mortgage has to be in first position. So any current mortgage would have to be paid off. And how much you can borrow, People always want to know this. How much someone can borrow is based on three factors. Age of the youngest borrower. So the minimum age is 62. We do have proprietary programs, non government programs and they start at 55, but we'll just say the standard FHA version 62, at least one borrower value of the home and then interest rate.

So if somebody's 62, they can probably borrow about 35% loan to value. If they're 80, they can probably borrow more like 45, 48% loan to value. So the older you are, the more you can borrow. However, I always encourage people get it the day you qualify. The day you qualify is you're old enough, you have the right property type, single family home, townhome, patio, home, even a multi unit. As long as it's a primary residence, the borrower lives in one of the units. Condominium or, or yeah, FHA approved condo can work and then so old enough property type have enough equity. Right.

They have to have, they don't have to have that paid off but they have A good chunk of equity and then they have to commit to live in the home as a primary home, maintain it, pay the property taxes, insurance, if there's hoa, pay all that on time. As long as they do that, they can't outlive the loan term because the loan term is 150 years. People don't live that long. So the government has structured it in these proprietary mortgage companies have structured these so somebody truly can age in place at their home.

So I think you answered the next question I was going to ask because I was going to ask how a reverse mortgage allows someone to stay in their home. But I think that's what you just covered. So I'm good on that.

Interesting. Because you know, I'll tell you about the very first lady I helped back in 2015. She was referred me by her daughter and she was 84 year old. 84 years old, about 5 foot nothing, just full of fire. Sweet lady. And I said, hey Carmen, why do you want to do this? And she said well, my budget's tight. Okay, I get that. I said tell me more about that.

She goes, well, I'm leaving on Social Security. She lived in a duplex. The rent from the other half of the duplex paid the mortgage. So I said okay, that's awesome. She goes, but to be honest, I'm using credit cards to buy groceries. 84 years old, living on credit cards to eat. So at the closing table, I'm doing the math. So I know we've eliminated the monthly mortgage payment.

That was about 850 and we paid off the credit cards. It was just under twelve hundred dollars. We freed up a month for her. So I know the math. I said hey Carmen, how's this going to change your life? She kisses me on the cheek. I had to go home and tell my wife I got kissed at closing by an 84 year old clan. She kisses me on the cheek and she says now I can sleep at night, I don't have to worry about money. And for another 10 years she stayed in her home.

And then she got to the point where she needed more care and she had to go live with a family member. But there it is right there, Cathy. That allowed her to stay in her home for 10 more years and have a better quality of life. Not have the stress of does she have enough money to live every month, can she buy her meds, can she buy groceries, etc. What's that worth? I mean, that's priceless, right?

Yeah, I mean, I think you just answered my question. In part because I was interested in how people are creatively using their reverse mortgages in their retirement planning.

You know what? I should grab my book.

Okay.

I just wrote this book last year. It's called A Reverse Mortgage Changed My Life. And it's stories of how people have used reverse mortgages to improve their lives. And each one's like a fingerprint. They're all unique. No one. No one family or couple or person is the same. So I have a lady that had always dreamed about visiting the national parks across the country.

So she took out her mortgage, took a chunk of cash, bought one of those Sprinter vans. Have you seen those?

Oh, yeah, they're nice.

They're nice. Yeah. And Mercedes, she came by my office with her little dog in the front seat, and she was so excited. She told me all the places she's going to go. I have another lady that had to have a medical procedure done, and she bought health insurance to pay for the medical procedure. So she gets the bill, she sends it to the insurance company, and they say, I forget the number, but they say, you know, we're going to pay a fraction of what was due. And she's like, why? And they said, oh, you got to read this clause right here. And they were only obligated to pay a couple hundred bucks from $170,000.

Bill. So he goes to a financial planner, and she says, I want to get it. Want to take out a reverse mortgage. He goes, no, that's a bad idea. Financial planners don't always understand these either. And she says, okay, I need to take $170,000 out of my retirement. He goes, well, let's look at the reversible. So he refers them to me.

She negotiates with the hospital, says, look, I'm going to pay cash. What would that price be? It went from 170 to, like, 103. So she gets a reverse mortgage, takes that money, pays the medical bill, and, you know, doesn't have to worry about depleting her assets, her investments. I have so many stories like this. Another couple came to me, and they said, so there's three ways people can use a reverse mortgage. Eliminate monthly payment or make it optional. Access equity or purchase a home. Finance a home with a reverse mortgage.

So that's what this story is. This couple moved from northwest Arkansas back to Colorado Springs. And, you know, we're at, what, 6,000ft above sea level? So he had to be on oxygen. He couldn't breathe that good. And I said, hey, Bill, you know, tell me what. What you're wanting to accomplish. He goes, listen, I'm not long for the earth and I want to be sure my wife's going to be taken care of when I'm gone. I said, well, what does that look like? He says, we need to move into a gated community that the exterior is taking care of.

She doesn't have to mow the lawn or paint the house or any of that stuff. Garden, take care of the landscaping. And I want to make sure she is on the monthly payment. So we closed right before Christmas. In about early May, I get a phone call from Sherry and she says, hey, Kevin. Sherry, I hope you remember me. I'm of course I remember you. She said, I just want to let you know Bill had passed away and you had told us as long as this remains our primary home, we maintain it.

We pay the property taxes, insurance, HOA dues on time. There's no monthly payment and I can stay here as long as I want. Is that right? I said, that's right. Sigh of relief. She was, oh, good. That's the only way I can afford to stay in my home. So here's a husband that was thinking ahead, making sure his wife's going to be okay when he's no longer here. And the reason a lot of people have to move is because they've lived in their house for a long time and this house doesn't fit their needs any longer.

Maybe the neighborhood's changed. Maybe there's deferred maintenance. They don't feel safe. Maybe they have stairs. That's a big one. They have to go up and down the stairs. Mostly ranch houses, but Colorado, we have two story and they can't get up and down the stairs. So now they got to move to a more suitable place, place that's going to suit them in that stage of life.

So that's a long answer to your question.

Well, that's a good answer.

Yeah, it's a great answer. Are there any downsides to this?

Yeah. You know, we always ask people, how long are you planning to stay in your home? If they're not going to be there at least 18 months, we counsel them not to do it because they're not going to recoup the fees if somebody is terminally ill and they're not long for the earth. Actually, I did help somebody at one point because she just wanted to bring in care. She knew it was going to deplete her her equity. She didn't know how long she was going to live. She goes, this is a quality of life thing. I need to pay somebody to come in. So I got to tap into my equity.

There's still these other assets of my heirs are going to inherit, but I'm willing to spend down my equity. But usually if, if somebody's gonna not belong for the earth, we encourage them. This may not be the best option. Here's another one. And, and I kind of try to discern this by listening to people, but if somebody hasn't really managed the resources very well, we, we don't want to give them access to a tens of thousands of dollars or they could blow through it. It's kind of like winning the lottery. Have you, have you ever heard about those people who win the lottery and two, three, four years later, they're actually worse off than they were before? Yeah. So we don't want to put people in a worse situation.

We're trying to help people. And then of course the big one is there's going to be less equity, there's going to be less for the heirs to inherit. And what I always ask people is, well, what do you think they're going to do with the money? They're going to spend it. I said, well, why don't you spend it? You need it. You're the one who's worked for it. You need it to live. So they're still going to get something, but they're not going to get as much.

Yeah. And that's always hard to probably figure out. But what, what protections are in place today that make reverse mortgages safer than they have been in the past then?

That's a great question. So I first got trained on reverse mortgages in 2007 and honestly there were some things about them I just wasn't sure about. I wasn't, I wasn't convinced it was best for the client, so I didn't do anything for it with it for like eight years. 2015, HUD and FHA in Congress made some changes, including protecting non borrowing spouses. So before 2015, listen to this. Before 2015, if a non borrowing spouse lived in the home but wasn't on the loan, wasn't on title and the borrower moved out, the non borrowing spouse would have had to leave their home. Well, they fixed that. That's no longer the case.

Non boring spouses have protections now. Also, there's third party counseling that's required. So the government wants to be sure that these loans are helping people remain in their home, retain title of ownership, gain access to equity, make their monthly payment optional, entertain the lifestyle they've dreamed of. And worked for all these years. So they have to go through counseling. It's one hour either in person or by phone. And they want to be sure. They understand has to be your primary home, have to maintain it, have to pay the property charges on time, term of the loan, 150 years.

They talk about fixed or adjustable rate options. People can choose either one. And so they can't come back and say, I didn't understand how it worked because they're talking to me or someone like me, they're getting counseling, they're signing papers that say they understand these things. And so what happens is they're more informed, they're more aware of what they're doing. They understand they're forfeiting some of their equity via interest each month based on. It's kind of like a big credit card. Think about, you know, if you have a credit card with a balance of, or a limit of 10,000, but it's a balance of a thousand, you're only paying interest on the thousand. Same thing with the reverse mortgage.

You have access to 2,300,000, 400,000, whatever it is, but you only borrow a, a small amount. You're only paying interest on that amount. It's kind of like having a rainy day fund. It's there when you need it. You need a new roof, you want to replace your kitchen, you want to buy a new car, you want to take a trip. You can use the funds however you want, except one restriction. You can't purchase an annuity with reverse mortgage proceeds. Because think about it this way.

You're really already unlocking and annuitizing that equity. So the government doesn't want you to take that money and go put it with an annuity company and tie it up for more time, more money when you already unlocked it.

Interesting. So how does this all impact someone's heirs or estate? We touched on it a bit, but that's a big concern for a lot of families.

Yeah. So a lot of times a senior homeowner will want to put their child on the, on the deed or on the title. What we encourage people to do is to do a beneficiary deed, which is kind of prepared by a title company but not recorded until the person dies and then it's recorded and then title transfers from the owner to the children. It's just much cleaner to do it that way. It's better tax wise. And there's, there's just benefits that, that if they do it that way, it's, it's simpler for everybody. When my clients Close their loan. I always send them a book written by my friend Dan Holdchrist called Navigating Reverse.

And it's short little chapters about different topics that people have questions about. It's kind of like a big FAQ on reverse mortgages. And that's a ready reference that they can go and they can look something up real quick. Of course, they can always call me too. I don't mind. I'm happy to stay in touch with my, my clients. But if they just have a quick question, they can reference that book and then they can pass it on to the heir so they know what to do. So what happens at the end? Because that's kind of a to your question at the end, when the last person moves out the estate or the heirs or the borrower have up to six months to sell or refinance the home.

As long as they're actively trying to refinance or sell a home. If they can't sell within six months, they can ask for an extension, they can get two, three months extension. So basically they have up to a whole year to sell or refinance the property, which, it usually doesn't take that long. But that's how it works. When the last person moves out, the loan becomes due and then the clock starts ticking for the property to be sold or the mortgage balance repaid.

Well, as I mentioned a little bit earlier that my one sister's children are trying to pay it back starting now. Is that possible as well?

Good question. There's no prepayment penalty, so it can be paid off anytime. I have a story about this too. I have a guy that comes to my weekly men's group and I helped him with a reverse mortgage. And he comes one morning, he's all excited. He goes, I just sold this piece of property. I want to pay off my reverse mortgage. I said, mike, that's awesome.

Congratulations, Happy for you. I said, but if I were you, I wouldn't do that, because why not? I said, if you pay it off, they're going to close the line of credit. And all this money you paid to get a reverse mortgage is now gone. I would pay it down to like a hundred dollars, small balance. And then you're gonna have this gigantic line of credit. And this really is the secret sauce to a reverse mortgage, the line of credit. So what does that mean? It's a line of credit that's insured, it's protected from a market downturn, it's insured. And you can convert the money from line of credit to monthly payments.

Or lump sum, the interest rate is half a percent higher than what, what you're paying in interest. So if the interest rate 6, you're earning 6 and a half in your line of credit, which is called arbitrage, which is what the banks do. You go to the bank and you give them their money and they pay you 0.0 something percent and then you go get a car loan, they charge you 5, 7, 10% or whatever. So they make the arbitrage. Now a client can make arbitrage. Granted it's only a half a percent, but still it's something. Now they've got a six and a half percent growth on their line of credit, which in 12 years, 11 years is going to double. So the example I use is somebody takes out a reverse mortgage at 62 and we'll say they have a $200,000 line of credit.

They're still working, so they don't need the money, but they're doing a long play. They're saying, okay, in 12 years I'm not going to work anymore. I'm 74 now. That line of credit is doubled from 200,000 to 400,000. Now I'm going to convert it and start taking monthly payments from my line of credit, tax free, by the way. And I always ask financial planners, you know, do you have an investment that was insured, that's protected from the market, that grows by compound interest, that's tax free and is liquid? Nobody has that. Yeah, it doesn't sound like that's exactly why it's unique. So it's to people's advantage to own their home outright at 62, get a reverse mortgage as soon as they can because they want to time on their side so they can have that equity growing for them.

And of course they want to live in the house that they're going to stay in. Right. That's another piece. They don't want to move after a couple years. They want to have time working for them. Component, just working for them.

Well, you, you told us some stories from your book about people that have had had successes with reverse story. Is there reverse mortgage? Is there a story that sticks out that you want to still mention from, from that?

There's a couple I helped a few years back and he had been working but had gotten sick, could no longer work and she was working part time. They just needed some more income and they had a small balance left on their mortgage. And so this was like a triple. Like we did three things for them. We got rid of their monthly mortgage payment that freed up 1200amonth. We gave them access to equity, that was another thousand a month. And they could stay in their home, which they wanted to do. And of course he couldn't work anymore because he had gotten sick.

So now they're $2,200 a month to the good, cash flow wise. So it's one thing to have a bunch of assets. My dad, I mentioned before we started, my dad, I grew up in Orange County. My dad was a realtor and Investor. He had 20 rental properties. And it was great to have that income from those rental properties. But at the end of the day, the only way you can really cash out is to have those paid for and have that rent coming in or to sell and get the money to live on. So I'm a big fan of real estate and assets.

I am. But. But cash flow trumps equity, trumps assets in retirement. People want cash flow. They want to know they have enough money to live on each month, whether it's Social Security or an annuity or equity or a life insurance policy, whatever it is. So to answer your question, I helped Alex and his wife make their monthly payment optional access their equity. They could stay in their house, had enough money to live on because he couldn't work anymore. It changed their life.

That's why he said this book of reverse mortgage changed my life. Because the way the genesis of the book was, I invited my clients into handful of clients into the radio studio. And the theme of the ads was a reverse mortgage changed my life. And I had known some of the stories, like how it had helped people. Because people call me back all the time. You won't know. You have no idea what this has done for me, how much this has helped me. I'm so grateful.

And so I'm like, let's make some ads about it. Because people are so opposed, they can just hear from real clients to say, help me. And I left and I thought, I gotta write a book. I was in tears. It was so moving. I gotta write a book and just share their story stories. So it is very inspiring to be able to help people alleviate some of the pressure and the stress. Because when you're on fixed income and and your Social Security cola isn't keeping pace with inflation and all these prices are going up.

Remember last year was eggs, or a couple years ago was eggs. Now it's gas. I mean, it's always something, right? But you know, income is not keeping pace with inflation. So this just gives them peace of mind. It gives them access to money that they didn't have access to before. And I guess Carm said it best helps them to sleep better at night.

Yeah. Well, what should someone look for in a. In a trustworthy reverse mortgage professional? That's really important. How do we tell the difference?

I always tell people there's really four decisions you need to think of when you're getting a reverse mortgage. One is now the right time. We talked about that. Sooner is better than later, the day you qualify. Two is, is this the right product or program? The reverse mortgage is the only loan where the mortgage payment's optional. You can access your equity, and the mortgage payment is optional. Number three is, are we the right company? I work for a company called C2 Financial. We're a large mortgage broker in San Diego.

Been around since the mid-90s, so 30 years. And we are the number one reverse mortgage broker in the country. So we do a lot of them. And working with a broker is important because if you work with just a company, you have that company's product. You work with a broker, you have every product available. So just this month or last month, April, I had to switch two loans from one lender to another lender for different reasons. One was an appraisal issue. The other one, the underwriting, just didn't like the file for some reason.

So we switched it. Now they're both approved, and one's closing this afternoon, actually. So working with a broker is important. And then the fourth thing is, who do you choose to work with? So last year I had a lot of people reach out to me saying something like, I started with so and so company or so and so loan officer, and they didn't really understand reverse mortgages. Only 5% of mortgage originations do these nationwide. And, you know, these have been lean times with high interest rates. So lots of people trying to get into our space, but they're not trained and they don't understand them and they're not explaining it very well. And people are getting answers and they're confused.

And so work with somebody that closed these loans on a regular basis that you mentioned. The certified reverse mortgage professional is only like 225 in the whole country that have that designation. What that means is we've passed a rigorous exam. Only 25% of people pass the first time we take it. We commit to a code of ethics from the National Reverse Mortgage Lend Association. We commit to continuing education. And did I mention ethics? There's four E's exam. Ethics, education, and experience.

You have to have enough experience to even sit for the for the test. So it's worth it to work with somebody who knows what they're doing and has your best interest in mind and is a broker, in my opinion. If it were my parents, that's what I would tell them.

Yeah, it's good. Well, someone's just starting to explore this. What are the first steps they should take?

I always encourage people, you know, get educated. So I'm happy to send people my book. They can go on my website. I've written a consumer guide that they can download and read. It's very comprehensive, answers pretty much every question somebody could have. That's@reversemortgagerevolution.com I've got a YouTube channel with a bunch of short videos, educational videos which people can watch, choose the topic they want to watch and learn about reversemortgage video. People can always call and just ask questions if they want. I have a toll free number, 877-251-9709.

But it's worth it to learn how they work and if it's a good option for people and whether they do it or not. It's, it's kind of a. It's just kind of another tool in the toolbox. You know, you may not use it, but you have it if you need it.

And so when you, when you would get one, it would, it would tell you what the payment would be, but that would be optional. So every time you don't make that payment, is that optional too? Or you have to commit to I'm going to pay or not pay.

Good question. So you get a statement each month, except there's no payment required. And it shows you what your balance is. It shows you how much money is available to you. It shows you the interest charged. And if you choose to make a payment, you can make a full principal and interest payment. You can make an interest only payment, you can make a partial payment, or you can make no payment. Sometimes people get a tax return.

They put it on their, on their mortgage, on their balance, or they get a windfall like my friend Mike, and they pay it down. So the line of credit grows larger. So I think if I were to, if I were to say what the key feature or the key benefit is, it's flexibility. People want the flexibility. I can make a payment. I don't have to make a payment. I need access, equity or I don't. Because, you know, life es and flows, right? It's not, it's not a straight line.

And so people just want to know I have money available. Should something happen?

Yeah. Yeah. So how can families have this conversation together in a productive way?

I've worked with lots of families over the years, and some are for it, some are against it. What ends up happening is when we get everybody together and we explain it. The number one thing they say is, this sounds too good to be true. What's the catch? Well, the catch is it's a deferred interest loan. Interest is going to accrue, it's going to grow. So we talked about how that is one of the downsides. But what happens is, and I've had people say, okay, we're not going to do it. We're just going to give mom or dad, you know, so much a month to live on.

We don't need a reverse mortgage. I'm like, great, if you can do it. Or Mom's going to come live with us. Okay. Or Mom's going to take in a border. Fine. But there's no harm. This is the other thing I say.

There's no harm in getting it and letting it sit there and grow. Let. Let the equity grow with the compound interest and the line of credit. There's no harm in doing that, whether you ever tap it or not. I have a family in Fort Collins. I helped last year, and it was referred to me by another loan officer who didn't do reverse mortgages. And she said, I looked you up, read your reviews, and I want, you know, my parents. So technically, on paper, they didn't really need it.

They had enough money to live on. They were healthy in their 80s. But it was kind of a. Just in case, if we ever need it. Because what happens is men usually precede women in death. So now there's one income, not two. And people want to keep their same lifestyle. You know, they don't want to eat beans and whatever they want to get.

Exactly. So they just got it like a precautionary thing. And, you know, who knows? They could live a long time and never use it. It's fine, but it's there if they need it.

Are the interest rates the same for a regular mortgage?

Interest rates are actually better on reverse mortgages than they are on traditional mortgages, probably by half to a point.

And the loans are being made by banks also. It's bank loan.

Yeah, Usually these are done by. There used to be big banks in this space, like Wells Fargo, bank of America. They're not. These are really mortgage brokers and mortgage companies that are doing these.

So what happens if they don't take the equity? What happens Then that they have this mortgage.

It's like a big credit card. You know, you have a 10,000 limit, you have a thousand dollar balance, you pay interest on the balance. Same thing. You have 100,000 line of credit, you only have a 10,000 balance. Interest is being charged against the 10,000, but you got 90 available if you need it.

Okay, well, what are some common mistakes that people make when they're considering a reverse mortgage?

I think a lot of people rule it out before even learning about it, before educating themselves or they listen to people that I always tease. I say, look, after I talk with somebody, they're all excited. I'm like, now here's what's going to happen. You're going to go tell your neighbor Fred and he's got a cousin's uncle's brother's neighbor's friend in Nebraska who said, no, you shouldn't do it, who's not licensed, how they work. But somebody said, nope, you shouldn't do it. Those are bad. Or they go online and they read outdated information because you know, you go on a website, it's not date stuff stamped when that blog or article was published. And they're going off of information prior to 2015 before the government made these changes to make them safer for people.

So go to a source like my website for example, or videos. Go to a source that is actually current and up to date and informed and is going to give you the correct information.

Good, good one. Yeah, yeah. So looking ahead, how do you see reverse mortgages evolving as more boomers enter retirement?

Yeah, so there's probably about 5% of people that don't need these. They have enough money. But even I'm seeing these not need them, are doing them because they want to start giving their wealth away while they're alive. Give it with a warm hand, not a cold hand. They want to help their kids or their grandkids buy a house or get started in life. But I would say probably 95% of people are going to need them. Let me just give you one example. Fidelity Investments does a survey or a study every year and they say a healthy 65 year old couple is going to spend $315,000 out of pocket just for medical expenses.

12% of people have long term care insurance. 2/3 of people are going to need it. So just that one thing is going to wipe out so many people's assets and equity. But if they buy a long term care insurance policy or a hybrid policy, they get a life insurance policy with a long term care rider, they Shift that risk away from themselves and their estate to the insurance company, and then more money ends up going to the kids into the heirs. In fact, if they do it well, this is one of the stories in my book. If they do it well, the kids will get more money tax free than they would with just the house. So I would say people are starting to see, wait a second, I don't have enough money set aside, saved, invested for retirement. I'd better look at some other means.

And equity is that other means.

Yeah.

Well, this has been incredibly informative. You've really helped kind of demystify the topic. And everybody's curious about this and concerned about it.

Yeah.

Yeah. And, Kevin, tell us again the name of your book and how to reach you.

It's a reverse mortgage. Changed my life. And it came out last year. It's on Amazon. And then people can Visit my website, reversemortgagerevolution.com There's a consumer guide there that is very comprehensive, answers so many questions. And so I, I say that because sometimes people want to go in stealth mode. They don't want to talk to me initially. They want to research first, which is fine, but go and read the book or download the guide or watch the videos or all of the above and just learn and understand.

Is this something that's going to help me? And then, of course, they can always call. I'm happy to visit with people on the phone. 877-251-9709.

I wrote that down. Thank you. What we love is your focus on education and empowering people to make the right decisions for themselves. Thank you.

And I really am. No stress. I don't pressure people. I try to educate people. If they want to do it, great. If they don't, I don't put them in a headlock trying to get them to do it. I don't like that myself. So I just try to, you know, help people make the best decision for, for their situation.

Good.

Yeah, good. And is there anything more they should learn about connecting with you?

Not that I can think of. I'm licensed in 20 states. Our company's in 40 states. So even if I'm not in a state that somebody lives in, I can help them find somebody that can take good care of them.

And, and to our listeners, if you're thinking about your next chapter and how to create financial freedom and security, this is definitely a conversation worth exploring. And please be sure to subscribe to Late Boomers so you don't miss any of our upcoming episodes.

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And until next time, remember, it's never too late to create the life you want.

Thank you all for listening.