What’s A HECM Good For? How Your Clients Might Use A HECM, HELOC, or H4P

Amara Rose June 11, 2018 1

Recently, one HECMWorld reader requested a list of blog posts that address how a HECM can help defray the cost of caregiving — often a considerable expense, and not covered by Medicare unless skilled nursing is needed. He was right on the money in terms of using this information as a marketing tool.

Here are seven blog posts that may be particularly useful in supporting your HECM message. In addition, be sure to check out our newest post, “My parent needs help…and I don’t know what to do!”, which provides detailed information about several kinds of senior home assistance.

Caregiving and HECMs: 

Our Mother’s Keeper/Part 1

Our Mother’s Keeper/Part 3

PRC Baseball

Family financial discussions and monetary needs:

Out of Money Due to A Health Emergency?

The “M” Word: Family Money Discussion

Ways to Use a HECM for Purchase:

Decluttering Our Later Lives

How the HECM for Purchase Vanquishes Retirement Myths

Aging in Place Tips for Homeowners

Retirement Wizardry: Where the Smart Money Meets Reverse Mortgage Magic

Another strategy is to discuss HECMs with potential borrowers before they reach the age of eligibility in order to help ameliorate the alarming rise in retirement debt for those 75 and older, as Shannon Hicks explains in this video.

He says, “Reaching out to those turning 60 could provide a unique opportunity to present a proactive retirement income option, before they’re facing the harsh reality of a fixed income, while burdened with debt payments.”

PRC Baseball

Prospect Marketing Tool

You can use the following prospect-focused material to support your own efforts, whether for a talk at a senior center, Rotary Club or professional organization, a seminar, one-on-one consults with reverse mortgage newspotential borrowers, as a hand-out, etc.

Simply copy and paste what follows into a Word document or email, and add your business logo and contact information:
*Always check with your lender’s compliance team before sending this or any marketing materials*

How A HECM, HELOC, or H4P Can Help You

  • Pay off debt. Do you have outstanding credit card debt, car loans, or medical expenses that are not covered by Medicare? Use the proceeds from a HECM to eliminate these monthly bills.
  • Handle important home or health issues. Whether it’s essential house repairs, dental work you’ve been delaying, or modifying your home to make it easier and safer to age in place, the cash available through your HECM enables you to take care of work you’ve been postponing.
  • Plan for the future*. A reverse mortgage loan can be part of a smart financial strategy to conserve resources. For example, you can:
    • Arrange a Home Equity Conversion Mortgage Line of Credit HELOC (Home Equity Line of Credit) (the unused portion of available funds from the loan)  for possible later need;
    • Reduce your income from a part-time job to avoid lower the likelihood of paying Social Security tax (Social Security is taxable if you go beyond a certain income threshold);
    • Delay filing for Social Security benefits.

* Homeowners should always seek the advice of a competent financial professional before employing these strategies.

  • Help your children or grandchildren make a down payment on a house, pay off student loans, or otherwise ease their fiscal burden as they launch careers and families. According to a recent financial quiz in AARP magazine, about 53 percent of grandparents contribute to their grandchildren’s education.
  • Downsize or relocate. Many couples decide to sell the home in which they raised their family once the children have flown the nest, and to right-size with a HECM for Purchase (H4P). Some people want to relocate to be closer to family or friends, or move to a more agreeable climate. Whatever your circumstances, a H4P makes later life living more affordable.

 

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