Kirby Bradley, an ESPN award-winning film producer, known for Real Sports with Bryant Gumbel and 30 for 30, has recently produced a short documentary on one of the most misunderstood retirement products available, a reverse mortgage loan. This informative documentary covers true stories from families who used a reverse mortgage in a sensible, smart, and safe way that has enhanced their lives in a life-changing way. Feel free to watch the video below or read the transcribed text below. If you're interested in learning more about a reverse mortgage, you can request your free book here or reach out to your local reverse mortgage planner.
Most but not all, reverse mortgages today are federally insured through the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) Program. This blog and video talks about HECM loans only.
Harlan Accola: (00:04)
Hi, I'm Harlan Accola, with Fairway Independent Mortgage Corporation. You're about to watch a short documentary about one of the most misunderstood financial retirement products available, reverse mortgages. These are true stories told by real people who, at one time, didn't even like the idea of reverse mortgages. But they did their research and eventually concluded that reverse mortgages are a sensible, smart, and safe part of retirement planning for a broad range of people. I trust you'll find the stories informative and maybe even life-changing for you and your family.
Carol Tavares: (00:40)
I'm Carol Tavares, and I'm 76 years old, although I don't feel like it inside, I look like it on the outside. My husband and I were married in 1993. It was not our first time around. I had three children, and he had 1. Life is a challenge. I've had some more severe problems in the last few years. Eric is my middle boy, and he is disabled, and he's 56. He uses a wheelchair and has been for 35 years. Then I had my mom here for a while living with me, and she passed away in June, and she was a handful. And then I have Joe, my husband, who is diagnosed with early Alzheimer's. I seem him slipping away.
Carol Tavares: (01:46)
Eric has always been my responsibility. I try and help him as often as I can. His van was in real bad shape. It was coughing and choking and not getting him where he needed to go, and if he didn't have a van, he wouldn't be able to go anywhere. He's housebound. We knew we had to do something, and I was so frustrated. I didn't know which way to turn.
Stacey Schwartz: (02:17)
Carol is quite a lively, personable individual. Someone such as Carol is in a position of having a lot of equity in their home, but no cash. She didn't have access to the cash value available in her home.
Carol Tavares: (02:34)
We have a mortgage. I was struggling to pay the house off because my idea and my dream or my thoughts were that you should have a house paid for if you want to retire. Joe wanted me to get the reverse mortgage, and I fought him every step of the way. I didn't think he understood the ramifications of a reverse mortgage, so I kept saying no, no, no. And Joe kept seeing Tom Selleck on television selling reverse mortgages, and my thought is, you're kidding me, Tom Selleck surely doesn't have a mortgage, let alone a reverse mortgage. My daughter called me, and she says, "Mom, I think you should look into it again. Things are different. A reverse mortgage is you're taking your money out of your house, and you have access to that money. If something happens to you, the house is still in your name, and your beneficiaries can still sell the house and have whatever money's left after they paid the reverse mortgage off."
Carol Tavares: (03:38)
I started thinking about this reverse mortgage, and all of a sudden, you're not going to believe this, but it hit me how old I am. I'm going to die eventually, and all that money's going to be in the house, and I'm not going to see it. Eric never eats sweets except when it comes to the lemon meringue pie. Forget it, and he could eat a whole pie. Oh, I feel so good about Eric. When I got this reverse mortgage at and I talked to him about the van, I said, "I want to help you. I want to fix that van. I want to know that you're going to get to my house at Christmas." And he got tears in his eyes. I got tears in my eyes. Oh, my God. When he goes, "But Mom," I said, "But mom, nothing. What would I be doing with this money?"
Carol Tavares: (04:29)
Okay, sonny boy, mama's going. I love you.
Eric Tavaris: (04:34)
I love you too, mom.
Carol Tavares: (04:34)
I love you more. I didn't leave myself out. The first thing I did was I got an air conditioner and I also bought myself a new king size bed and I want to have my kitchen cabinets painted white. Getting a reverse mortgage has changed my life. I feel secure. I've got the money, and I can do it, I can live. I don't have to worry about losing my house, and I don't have to worry about making a house payment. I only have to pay taxes and insurance. I'm really happy with the reverse mortgage and considering how negative I was, I can't believe it's me, but it's true.
Harlan Accola: (05:16)
I have a lot of compassion for people that don't like reverse mortgages because I hated, them and I told people, "Whatever you do, don't get a reverse mortgage. They're bad for you, they're bad for your kids, you're going to lose your house," all the misconceptions that people say to me all the time. And then one day I got an invite to go to a seminar. That three-day seminar changed my life. The truth is there's a lot to like. Everybody has three buckets of wealth. Bucket one is the money that we make and are able to make when we work, and after we stopped working, the ability to make social security, income, pension, income, whatever it is. Bucket two is the money we put aside for the future and that's money that we set aside in 401Ks, 403Bs, IRAs, all the different retirement vehicles or just regular savings plans or, of course, life insurance contracts.
Harlan Accola: (06:01)
What we've also done is taking hundreds of thousands of dollars and dumped it into bucket three. That's our home equity. What's interesting, though, when we start looking for where do we pull money from, bucket one is usually not big enough. So we turn to bucket two where we've got our savings account. What we don't realize is all of that equity that we had in bucket three, we can turn that into cash also. What's wrong with using it? But for most people, they block that off and say, "No, that's stuck," and they're going to leave it in the walls of their house and not touch it. One of the biggest single things that I hear over and over again, which is, "I want to give my house to my kids free and clear." It's almost laughable because most children are never going to use the house or move into it. It's really strange, but everybody wants to give their home to their kids.
Harlan Accola: (06:46)
So the odd thing is that if we were going to give our kids a Christmas present and we knew they were going to take it back to the store, we'd probably give them cash or a gift card. But in the case of a house, everybody wants to give their house to their kids and their kids are going to take that equity and convert it into cash just as quickly as they can. The best time to use a reverse mortgage is at the beginning of retirement, not at the end*. If you do a reverse mortgage at the beginning of retirement, instead of waiting until you're 82 or 92 when you run out of money, what happens is that you'll end up with a larger legacy, you pay less in taxes, and you have more cash flow while you're alive.
Harlan Accola: (07:24)
A reverse mortgage is kind of like you're guaranteed not to lose. So FHA mortgage insurance guarantees that no matter when you pass away, no matter how big the bill gets, no matter what happens to the stock market or the interest rates or any of those things, you will never owe more than what the house is worth**. You will never have a bill left for your children, and you will never have to make a payment no matter how long you live, except for taxes, insurance, and maintenance. So if it's good, it goes to the children. If it's bad, the bill goes to FHA. You don't know if you're going to win for sure, but you're guaranteed not to lose.
Robert Smith: (08:01)
My name is Robert Charles Smith. They call me Robert or RC. The most momentous event happened when I met my bride. We got married at 19 years old. So we've been married for 64 years. Still sleep with the same woman. So anyway, that's what happened.
Judy Smith: (08:33)
Well, the most important thing for us is to support different charities. We're supporting 5 or 6 missions, several at home, our church.
Robert Smith: (08:44)
Let's bless you before we leave. We support five missionaries around the world, Costa Rica, Taiwan, Sri Lanka, and Indonesia. So bless Tim and bless all of his workers. In your name, we pray. Amen.
Robert Smith: (08:57)
Amen. We moved from Northern California to Oceanside in 2017. We bought this place here, 120,000 down, and then we had the monthly payment, $1,800 a month. Then we said, "Wait a minute, what if we had a reverse mortgage? Why do we want to have money in the dirt that we can't get our hands on and can't be useful to us?" And that if we could pull the money out, then all of these missions are going to be able to receive a check every single month. So that's exactly what we did.
Karline Stanley: (09:34)
90% of the senior population can benefit from a reverse mortgage***. You could have clients who are with a net worth of $10 million, and there's an absolute benefit to having the reverse mortgage. So, for Robert and Judy, they fall into the category of having done a good job of setting up for retirement. They have all their ducks in a row as far as their assets saved up to where they won't outlive their savings. Their ability to put the reverse mortgage in place freed up a significant amount of money, $1,800 a month, that they can now use towards their mission work.
Judy Smith: (10:11)
So what we thought was, this is fun. We can give away money now.
Robert Smith: (10:18)
What I would say to someone that is suspicious of reverse mortgages, it has all the protections that you need. If you'd like to make a payment, make it to yourself, for goodness sake. Take the $1,800 and run down here, and I'll help you find the broker. Or give it away. Give to people that need it.
It’s often wise to take the time to learn something new. Ask a local reverse mortgage planner to help you understand the facts and features of a reverse mortgage loan.
Harlan Accola Reverse Mortgage Director, NMLS#277693
Stacey Schwarts, Fairway Loan Officer NMLS# 243801
Karoline Stanely, Fairway Co-Branch Manager, NMLS#265513
*This advertisement is not tax or financial advice. You should consult a tax and/or financial advisor for your specific situation.
** There are some circumstances that will cause the loan to mature and the balance to become due and payable. The borrower is still responsible for paying property taxes and insurance and maintaining the home. Credit subject to age, property, and some limited debt qualifications. Program rates, fees, terms, and conditions are not available in all states and subject to change.
***Source: Dr. Wade Pfau