Reverse Mortgage Loans Are Not a Loan of Last Resort

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Not a Loan of Last Resort: Financial advisor clarifies a common misconception about reverse mortgage loans

A common misconception about home equity conversion mortgage loans (HECMs), commonly called reverse mortgage loans, is that they are a “loan of last resort.”

In this short video, Jim Thompson quickly clarifies why that really isn’t the case.

For those who would like to use a reverse mortgage as a last resort, they may find that it is too late.

But as Jim explains, reverse mortgage loans can can be a powerful tool for affluent seniors.

He sees great value in the HECM line of credit for this demographic, and believes that the unique method of repayment for a HECM loan is particularly appealing — once people really understand how it works.

Watch the Full Video

Video Transcription:

Jim Thompson

It isn’t a loan of last resort [the HECM or reverse mortgage loan], as a matter of fact that’s probably not going to work unless they’ve already done something about it, that might be a little late. 

And for the affluent, they think since they’ve paid for the house, they’re not going to save anything as far as mortgage payments and they have other assets.

But they understand that line of credit where you can access cash, tax free,  without having to pay it back.*

The house will pay it back when you leave.

That’s the thing with loans [people say], “I don’t want to have to pay that loan back.”

But the house will be fine.

It will gladly pay it back because it will appreciate, and you at that point in time probably won’t even need it.

*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation. 

Learn More About Why Financial Advisors Like Jim Recommend Retirees Consider the Benefits of a Home Equity Conversion Mortgage (HECM)

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