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Michael Pinter

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When Will Everyone Realize That In Most Cases, A Home Equity Line Of Credit is NOT a Substitute for a Reverse Mortgage

06-30-10
Michael Pinter

Once again, this morning, I was told by the accountant of my borrower, how a Home Equity Line of Credit (HELOC) is a better choice than a reverse mortgage because it is "much cheaper" and "less risky"

Let's get this straight: HELOC's and Reverse Mortgages are not comparable. They are apples and oranges. Here's why:

1) Most Reverse Mortgages borrowers cannot qualify for a HELOC today. Almost all HELOC lenders require both good credit scores and sufficient income to qualify, but let's assume that we are in the minority and CAN qualify for a HELOC.

2) HELOC's require MONTHLY PAYMENTS! If you cannot make those payments or worse, if you are planning to make the payments from the HELOC proceeds (yes, borrowing more to pay the loan?) then your time is limited before you are in trouble.

3) Only a Reverse Mortgage allows the borrowers to stay in the home for as long as they live there. The clock stops ticking, in contrast to a HELOC where the clock starts from the moment you draw on the loan. When the clock stops and you cannot make the payments on the HELOC anymore, you get FORECLOSED on and EVICTED. This will never happen with a reverse mortgage (as long as taxes and insurance are paid and the house is maintained)

4) If you are looking for extra income, only a reverse mortgage will pay you out for as long as you live in the home, even if you live to be 200 years old, the monthly payments NEVER STOP. This is the opposite of a HELOC, where if you start to draw from it, your payments grow and the time you can continue to draw from it is very limited and diminishes. Also, if interest rates rise, your HELOC payments go up, but your payments from a reverse mortgage never change.

So, anyone 62 or older qualifies for a Reverse Mortgage that guarantees that you can stay in the home that you love for as long as you want to, while a HELOC is only for a people who have good enough credit and income to qualify, and if you draw from the HELOC regularly, you will absolutely run out of money and time at some point and be in trouble if you can't make the payments.

HOW CAN YOU COMPARE THE TWO?

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Nice Reverse Mortgage Piece on Marketwatch

06-29-10
Michael Pinter

It is always good to see or read fair and balanced media portrayals about Reverse Mortgages. Unfortunately there are not enough. Yesterday, Amy Hoak wrote a very fair article in Marketwatch about Reverse Mortgages. It is a worthwhile read. Here is the link to it:

http://www.marketwatch.com/story/reverse-mortgages-now-a-less-costly-lifeline-2010-06-28

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Another Presentation to Help Your Reverse Mortgage Understanding

06-29-10
Michael Pinter
Here is a presentation from Genworth (a division of GE that bought Liberty Reverse Mortgage a few years ago for $50 million dollars) that gives some basics about Reverse Mortgages. In my opinion, it is not as good as the guide I posted last week ("Your Reverse Mortgage Guide" which you can get here: http://activerain.com/blogsview/1709741/my-first-reverse-mortgage-giveaway) but it can be helpful with many of the basic questions and issues that surround Reverse Mortgages. I know it's redundant, but I want to explain how Reverse Mortgages work to as many people in the world as I can because I believe that the more people that understand a reverse mortgage, the more people that can be helped by them.
Change your life with a Reverse Mortgage
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In the spirit of Reverse Mortgage giving....

06-28-10
Michael Pinter
Here is a presentation I gave several times to people in the insurance industry (mostly Long-Term Care Insurance, but Life insurance, too) I think it's a great explanation how Reverse Mortgages work and some great, real-life examples of how Reverse Mortgages can help insurance agents and their clients. I reiterate that I believe that Reverse Mortgages are the most misunderstood financial products in the world and I am doing whatever I can to explain them to as many people as I can because I know that the more people that understand how a Reverse Mortgage works, the more people can be helped by them. Reverse Mortgages let you hold on to the things you love, especially your independence.
Reverse mortgage to financial planners (insurance)
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Another great Reverse Mortgage Giveaway

06-25-10
Michael Pinter
Here is a presentation that I have given at seminars about how Reverse Mortgages work. It is a little wordy and I am working on changing many of the slides, but if you read it, it gives a lot of useful information.My favorite part is about the misconceptions that people have about Reverse Mortgages. I still cannot believe how many intelligent professionals, many of whom serve the senior community, such as elder law attorneys and financial planners, still don't have a clue about how a Reverse Mortgage works. I can't tell you how many of them have told me that the lender keeps the Reverse Mortgage borrowers home. I still believe that Reverse Mortgages are the most misunderstood financial product in the world and I am trying to explain it to as many people as I can. Here is the presentation:
Reverse Mortgage Truth
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