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Reverse Mortgages Explained: Unlocking Home Equity While Staying Home · A Place for Seniors

• 0:00
  SPEAKER_01: Welcome to a place for seniors, where we share the real truth about what seniors need.
• 0:05
  SPEAKER_01: This podcast features honest, heartfelt conversations, the ones we don't always have, but matter the most.
• 0:12
  SPEAKER_01: Here we share real stories and simple insights about aging with dignity, choice, and autonomy.
• 0:18
  SPEAKER_01: Together, we bring what we've learned from over 20,000 conversations with seniors and their families, guiding you through some of life's hardest decisions.
• 0:27
  SPEAKER_01: We invite you to listen, learn, and prepare with us, because these conversations matter and the choices we make today shape our tomorrow.
• 0:37
  SPEAKER_01: Hi, and welcome to a Place for Seniors podcast.
• 0:40
  SPEAKER_01: I'm Alison Carmen, and today I have Christopher Holmes with Scottsdale Mortgage Advisors.
• 0:47
  SPEAKER_01: Can read his shirt.
• 0:50
  SPEAKER_01: But Christopher and I know each other from a uh a group that we're part of, which is Accelerant, which is great.
• 0:57
  SPEAKER_01: And um, he's been instrumental in helping me in all kinds of different ways.
• 1:02
  SPEAKER_01: And I wanted to have him on the podcast because one of the things that I love hearing about from Christopher is that he actually um brings in mortgages quickly, um, under under uh interest rate below market rates and um works with tons and tons of people on that, right?
• 1:22
  SPEAKER_01: Yep.
• 1:22
  SPEAKER_01: And you're also a reverse mortgage specialist.
• 1:25
  SPEAKER_01: I am right.
• 1:26
  SPEAKER_01: So that to my audience, that might be something, but also we can talk about how you do your mortgage business because I think it's fascinating and what you do with that.
• 1:36
  SPEAKER_01: And I think it's uh it's uh pertinent to any listener that's listening to this, whether they be senior living or whatever, right?
• 1:43
  SPEAKER_01: So I always see it like our our seniors are moving out of their houses, but then we are always partnering with a real estate agent who is then selling the house.
• 1:52
  SPEAKER_02: Right.
• 1:52
  SPEAKER_01: So you're gonna come into play in a lot of those transactions.
• 1:56
  SPEAKER_01: Oftentimes do.
• 1:56
  SPEAKER_01: Yeah.
• 1:57
  SPEAKER_01: Yeah.
• 1:57
  SPEAKER_01: Yeah.
• 1:58
  SPEAKER_01: So um, so what I want to start with though is kind of who who you are, what brought you to mortgage, and kind of if you have any experience with parents or anything like that.
• 2:09
  SPEAKER_00: I do.
• 2:09
  SPEAKER_00: I do.
• 2:10
  SPEAKER_00: So um I've been in the business for 34 years.
• 2:13
  SPEAKER_01: Wow.
• 2:13
  SPEAKER_00: Literally, not literally, figurative, fell into the business after getting a laid off for my very first job out of college, didn't know what I was gonna do, and uh was playing softball a couple of nights a week with some buddies and showed up one night to a game and let them know that I had just been laid off.
• 2:28
  SPEAKER_00: And they're like, What are you gonna do?
• 2:29
  SPEAKER_00: And I'm like, I don't know.
• 2:31
  SPEAKER_00: And so they said, Come to work with us tomorrow.
• 2:33
  SPEAKER_00: I said, Well, what do you do?
• 2:34
  SPEAKER_00: They said, Well, we saw money.
• 2:36
  SPEAKER_00: Like, is that legal?
• 2:37
  SPEAKER_00: And they're like, Yeah, we can do loans and mortgages and things like that.
• 2:40
  SPEAKER_00: And I didn't know anything about that at 23 years old.
• 2:43
  SPEAKER_00: Right.
• 2:43
  SPEAKER_00: So went in, met with their manager, and it has been an absolute blessing for 34 years to be in an industry where I get to help so many people.
• 2:52
  SPEAKER_00: And I've always been an educator and coach.
• 2:55
  SPEAKER_00: You know, that's kind of always been my heart, and I implement that in my boards.
• 2:59
  SPEAKER_01: That's why we really connect.
• 3:00
  SPEAKER_01: Yeah, I believe we both sell like that.
• 3:02
  SPEAKER_01: We both we educate first and talk about education, and then the and then what that just serves whether you want to make a decision or not.
• 3:12
  SPEAKER_01: Exactly.
• 3:12
  SPEAKER_01: And you're no high pressure or anything like that.
• 3:14
  SPEAKER_00: That's exactly how I work.
• 3:15
  SPEAKER_00: And you know, you you've you've seen me work with clients that you've referred over, and there's been an opportunity to really educate them about their options.
• 3:22
  SPEAKER_00: Yeah.
• 3:22
  SPEAKER_00: And when it comes to to being a mortgage broker as opposed to being a banker, I worked for Wells and Chase way back in the day and kind of cut my teeth learning the business through them.
• 3:32
  SPEAKER_00: Yep.
• 3:32
  SPEAKER_00: But one of the challenges I already uh always had was that we had a very small box of products.
• 3:37
  SPEAKER_00: And if the client didn't fit into the box, then they had to go somewhere else.
• 3:41
  SPEAKER_00: Right.
• 3:42
  SPEAKER_00: And I always felt horrible that I had to refer these clients on to someone else when I knew there was a product for them.
• 3:47
  SPEAKER_00: We just didn't offer it.
• 3:48
  SPEAKER_00: Right.
• 3:48
  SPEAKER_00: So when I opened my company about five years ago, the goal was to be able to offer a really wide range of products, whether it's a first-time buyer, maybe with zero-down payment program.
• 3:59
  SPEAKER_00: Right.
• 3:59
  SPEAKER_00: It could be a veteran trying to figure out how to get into their first home or maybe refinance.
• 4:03
  SPEAKER_00: Yeah.
• 4:03
  SPEAKER_00: Um, all the way from a home equity loan for maybe bell consolidation or home improvements to a second home or vacation home or rental property, um, light small commercial properties we do as well, up to about three million.
• 4:16
  SPEAKER_00: And then what I call my last time home buyers, which are my reverse mortgage clients.
• 4:20
  SPEAKER_02: Right.
• 4:20
  SPEAKER_00: So being a broker and having the background and experience that I have, I get a chance to get to know the client, find out what their overarching needs are.
• 4:28
  SPEAKER_02: Right.
• 4:29
  SPEAKER_00: And then try and help them figure out whether a reverse mortgage might make sense.
• 4:33
  SPEAKER_00: Does a home equity line of credit make more sense because that's a more of a shorter-term cash need than the idea that they want to stay in the home long term.
• 4:41
  SPEAKER_00: Or maybe selling does really make the most sense.
• 4:43
  SPEAKER_00: And and then making a move into a senior living community might be better.
• 4:47
  SPEAKER_00: And what would that look like financially if they were to sell and how much cash would they have?
• 4:50
  SPEAKER_00: And then be able to turn it over to somebody like you that can help them get into the right place.
• 4:54
  SPEAKER_00: And so that's what I do and how I do it.
• 4:57
  SPEAKER_00: And I meet every one of my clients face to face on Zoom now and do that from all over the country.
• 5:03
  SPEAKER_00: We're only licensed in Colorado and Arizona.
• 5:05
  SPEAKER_01: But that's where we work.
• 5:06
  SPEAKER_01: Well, there you go.
• 5:07
  SPEAKER_01: Colorado and Arizona.
• 5:08
  SPEAKER_01: How about that?
• 5:08
  SPEAKER_01: So Well, we're in Utah and New Ma and New Mexico, but we'll we'll get more and more clients.
• 5:13
  SPEAKER_01: We're growing.
• 5:14
  SPEAKER_00: There you go.
• 5:14
  SPEAKER_00: Yeah.
• 5:15
  SPEAKER_00: Well, we have so many people relocating here.
• 5:17
  SPEAKER_00: Yes.
• 5:17
  SPEAKER_00: That I'll talk to people.
• 5:18
  SPEAKER_00: I've got a client right now in Indiana getting ready to sell their home in Indiana so that they can relocate out here for a position.
• 5:23
  SPEAKER_00: So we can jump on Zoom, spend 45 minutes going over a loan application, the credit report, income and asset documentation, and then lay out two or three different loan programs that might work for them.
• 5:34
  SPEAKER_00: As a matter of fact, the client that's coming out is going to be the religious education director at one of our universities, starting up a new program for us.
• 5:42
  SPEAKER_00: But he's of retirement age, he's over 62, getting a lot of money from the sale of his home.
• 5:48
  SPEAKER_00: So one of the products we talked about this morning was a reverse mortgage.
• 5:52
  SPEAKER_00: And the biggest misnomer about the reverse and his instant recoil, pushback, was the fallacy that the bank gets the house.
• 6:01
  SPEAKER_00: Yeah.
• 6:01
  SPEAKER_01: Once you all think that.
• 6:03
  SPEAKER_01: Oh, well, I have a reverse mortgage.
• 6:04
  SPEAKER_01: It's the bank's house.
• 6:05
  SPEAKER_01: Right.
• 6:05
  SPEAKER_01: I'm like, no, no, no.
• 6:07
  SPEAKER_01: You were earning equity the whole time.
• 6:09
  SPEAKER_01: Exactly right.
• 6:10
  SPEAKER_00: So so once I got him kind of opened up to listening to it as an option, it was like, well, why wouldn't I want to do that?
• 6:17
  SPEAKER_00: And I thought, you know what?
• 6:18
  SPEAKER_00: And the story I tell everybody is what I did for my parents.
• 6:20
  SPEAKER_02: Yeah.
• 6:21
  SPEAKER_00: And so when my my dad was an executive with General Motors, Cadillac Division, and when we got relocated to Arizona, my mom always had kind of a small part-time job because my dad was on the road all the time.
• 6:31
  SPEAKER_00: And by the time they got to retirement age, my dad and mom were at home together full-time.
• 6:37
  SPEAKER_00: My mom called me and she goes, You got to get your dad out of the house.
• 6:39
  SPEAKER_00: He's driving me insane.
• 6:41
  SPEAKER_00: She wasn't used to having him home full-time.
• 6:43
  SPEAKER_00: Sure.
• 6:43
  SPEAKER_00: So he got a great part-time job and they were both working little part-time jobs until COVID hit.
• 6:48
  SPEAKER_02: Oh.
• 6:48
  SPEAKER_00: And I had been talking with them about a reverse mortgage just to take some of the financial pressure off.
• 6:52
  SPEAKER_00: But they felt like with part-time jobs, it was easy to make the mortgage payment and have money that they wanted to fly back to see my sister back in New York and her kids and other trips that they wanted to take.
• 7:02
  SPEAKER_00: So it wasn't a big deal.
• 7:04
  SPEAKER_00: Yeah.
• 7:04
  SPEAKER_00: When they both got laid off in COVID, they mentioned to me that boy, you know, without that extra cash, things are a little tighter than they used to be.
• 7:12
  SPEAKER_00: Yeah.
• 7:12
  SPEAKER_00: Can you come over and talk with us about that reverse mortgage again?
• 7:15
  SPEAKER_00: So I went over, laid it out, explained that we could refinance the existing balance of the home.
• 7:20
  SPEAKER_02: Uh-huh.
• 7:20
  SPEAKER_00: And their mortgage payment was about$1,200 a month.
• 7:22
  SPEAKER_01: Okay.
• 7:23
  SPEAKER_00: And I said, we can refinance the reverse mortgage, eliminate the requirement to make a payment, and you'll never have to make another house payment for the rest of your life.
• 7:31
  SPEAKER_00: Yeah.
• 7:32
  SPEAKER_01: I don't think people really understand that.
• 7:34
  SPEAKER_01: And and you can't I you're going to talk about it, but there's also uh there's some limitations on how much equity you can take off of the Trevor Burrus.
• 7:42
  SPEAKER_00: The most popular kind of reverse mortgage, there's there's basically three types of reverse mortgages.
• 7:48
  SPEAKER_00: There's a lump sum.
• 7:48
  SPEAKER_00: So you could take out a lump sum of equity from the home and never have access to any more without refinancing it.
• 7:55
  SPEAKER_00: Right.
• 7:55
  SPEAKER_00: You could take out what are called tenured payments, which means you based on how much equity you have, you can get a check from the bank every month for the rest of your life.
• 8:03
  SPEAKER_00: Number will never change.
• 8:05
  SPEAKER_00: Or you could do a reverse mortgage line of credit, which means take whatever you need right away.
• 8:10
  SPEAKER_00: Yeah.
• 8:10
  SPEAKER_00: And then if and when you need more later, you can draw on that line of credit as you need it.
• 8:14
  SPEAKER_00: Got it.
• 8:15
  SPEAKER_00: And you're charged interest every month against the balance.
• 8:18
  SPEAKER_00: Uh-huh.
• 8:18
  SPEAKER_00: So oftentimes the line of credit makes more sense because why pay interest on money you haven't used yet?
• 8:23
  SPEAKER_00: Right.
• 8:24
  SPEAKER_01: Just leave the money there until you need it.
• 8:26
  SPEAKER_00: For my parents, just to give round numbers, let's say they owed about$200,000 on the house.
• 8:30
  SPEAKER_00: Yep.
• 8:30
  SPEAKER_00: The home was worth about$800,000.
• 8:32
  SPEAKER_02: Yep.
• 8:32
  SPEAKER_00: So we set them up with a$400,000 line of credit.
• 8:36
  SPEAKER_00: We used the first$200 of it to pay off the mortgage.
• 8:38
  SPEAKER_00: Oh.
• 8:39
  SPEAKER_00: No more house payments for the rest of their life.
• 8:41
  SPEAKER_00: Right.
• 8:41
  SPEAKER_00: And$200,000 to use for whatever reason they wanted.
• 8:45
  SPEAKER_00: We paid one of the cars off, which was great.
• 8:47
  SPEAKER_00: The other one's already paid off.
• 8:48
  SPEAKER_00: Paid up a couple small credit cards.
• 8:50
  SPEAKER_00: They literally had no debt payments to make.
• 8:53
  SPEAKER_01: And no house payments.
• 8:54
  SPEAKER_00: Exactly.
• 8:55
  SPEAKER_00: So between his pension from General Motors and their two Social Securities, they were able to actually go back to living the lifestyle that they were living while they were working part-time.
• 9:02
  SPEAKER_00: Right.
• 9:03
  SPEAKER_01: Didn't have to work part-time, but now could go and invest in hobbies and do stuff.
• 9:10
  SPEAKER_01: Yeah.
• 9:11
  SPEAKER_01: Very cool.
• 9:11
  SPEAKER_00: So the story turns.
• 9:12
  SPEAKER_00: My mom had been battling with cancer for years.
• 9:15
  SPEAKER_00: Oh.
• 9:15
  SPEAKER_00: She finally passes away.
• 9:17
  SPEAKER_02: Oh, wow.
• 9:17
  SPEAKER_00: And so mom passed.
• 9:18
  SPEAKER_00: Dad's left in the home.
• 9:20
  SPEAKER_02: Uh-huh.
• 9:20
  SPEAKER_00: Dad has Parkinson's.
• 9:22
  SPEAKER_00: So after mom passed, the Parkinson's has gotten worse and worse.
• 9:25
  SPEAKER_00: So while he loved the thought of living in that home for the rest of his life, the reality just wasn't a reality for him to do that.
• 9:32
  SPEAKER_00: So we found a place for him, a great home that specializes in Parkinson's, which is fantastic.
• 9:38
  SPEAKER_01: It wasn't Laura Cohen's home, was it?
• 9:40
  SPEAKER_00: No.
• 9:40
  SPEAKER_01: Oh, okay.
• 9:41
  SPEAKER_01: She specializes in po in Parkinson's.
• 9:43
  SPEAKER_01: Okay.
• 9:44
  SPEAKER_00: So he's in a great place.
• 9:45
  SPEAKER_00: We listed the house for sale with a realtor, got the home sold, and basically have that money sitting in the account, which is helping to pay for the care that he's going to need for the rest of his life.
• 9:54
  SPEAKER_01: Yeah.
• 9:55
  SPEAKER_01: And you sold, you paid off the reverse mortgage and still had equity.
• 9:59
  SPEAKER_00: On the sale of the house, the reverse mortgage is paid, and the equity left in the home is deposited into his account the same way it would have been had they sold the house when it first got laid off.
• 10:08
  SPEAKER_00: Right.
• 10:08
  SPEAKER_00: So the beauty was the house continued to appreciate while it had the reverse mortgage.
• 10:13
  SPEAKER_01: Especially before 2020.
• 10:15
  SPEAKER_01: Exactly.
• 10:16
  SPEAKER_00: So it has been the perfect product.
• 10:18
  SPEAKER_00: It isn't the perfect product for everybody.
• 10:20
  SPEAKER_00: Right.
• 10:20
  SPEAKER_00: And like I said before, it may be that a line of credit may be a better idea.
• 10:24
  SPEAKER_00: Right.
• 10:24
  SPEAKER_00: Or a cash out refinance.
• 10:26
  SPEAKER_00: Right.
• 10:26
  SPEAKER_00: Makes more sense because they want to continue to pay the balance down.
• 10:28
  SPEAKER_00: Right.
• 10:29
  SPEAKER_00: Being a mortgage broker allows me to make all of those options available.
• 10:32
  SPEAKER_00: Yeah.
• 10:33
  SPEAKER_00: Instead of being a one-trick pony.
• 10:35
  SPEAKER_00: Yeah.
• 10:35
  SPEAKER_00: You know, and God bless them.
• 10:36
  SPEAKER_00: There's a lot of companies that all they do is reverse mortgage.
• 10:39
  SPEAKER_00: Yep.
• 10:39
  SPEAKER_00: But when that's the only solution, that's all you're going to get presented with.
• 10:43
  SPEAKER_00: As opposed to sitting down with somebody who says, okay, what are we trying to accomplish?
• 10:46
  SPEAKER_00: Right.
• 10:46
  SPEAKER_00: What what's the the long-term goal here?
• 10:48
  SPEAKER_00: Let me lay out a couple different options for you.
• 10:50
  SPEAKER_00: And then you guys decide or maybe talk with your financial advisor.
• 10:53
  SPEAKER_00: Let's see which one makes the most sense.
• 10:55
  SPEAKER_00: Yeah.
• 10:55
  SPEAKER_00: And then be able to help execute on that.
• 10:58
  SPEAKER_01: You know, it's it's so uh similar to uh, you know, I was laid off in 2008, 2009 as being an industrial engineer.
• 11:07
  SPEAKER_01: And I I liked that, but it wasn't really my thing.
• 11:10
  SPEAKER_01: I wasn't super excited about it.
• 11:12
  SPEAKER_01: I didn't feel like it was meaningful.
• 11:14
  SPEAKER_01: And I ended up in the senior living industry, but I ended up in independent living and working for a company.
• 11:19
  SPEAKER_01: So that's the only thing I had, but I thought it was the best thing since sliced bread.
• 11:23
  SPEAKER_01: So it worked for a while.
• 11:24
  SPEAKER_01: I really earned and and cut my teeth with that.
• 11:28
  SPEAKER_02: Yeah.
• 11:28
  SPEAKER_01: Learned about VAAD and attendance, learned about all kinds of different things, um, understanding that.
• 11:33
  SPEAKER_01: Then went to work for an assisted, another independent living that had assisted living, memory care, and a skilled nursing.
• 11:40
  SPEAKER_01: So learned all those four things, but still I'm working in that one company, right?
• 11:45
  SPEAKER_01: Right.
• 11:45
  SPEAKER_01: I only have that one option for people.
• 11:48
  SPEAKER_01: Right.
• 11:48
  SPEAKER_01: And I was the same way.
• 11:49
  SPEAKER_01: I was like, I know there's like tons of options out here.
• 11:52
  SPEAKER_01: I could help so many more people.
• 11:54
  SPEAKER_01: And that's why I went, then I went to work for the big company, place for mom, and then I opened my own company.
• 12:00
  SPEAKER_01: Good for you.
• 12:00
  SPEAKER_01: Doing that.
• 12:01
  SPEAKER_01: Yeah.
• 12:01
  SPEAKER_01: So I think that is uh a curiosity factor, right?
• 12:05
  SPEAKER_01: And also a almost board factor.
• 12:08
  SPEAKER_01: You know, it's like I wait, wait, there's more to do.
• 12:11
  SPEAKER_01: Exactly.
• 12:12
  SPEAKER_00: I can serve these people so much better if they had so many more options.
• 12:15
  SPEAKER_01: Right, right, right.
• 12:15
  SPEAKER_01: Yeah.
• 12:16
  SPEAKER_01: I love that.
• 12:16
  SPEAKER_01: Yeah.
• 12:16
  SPEAKER_01: I'm so sorry to hear about your dad.
• 12:18
  SPEAKER_01: He's still with us?
• 12:18
  SPEAKER_01: He is.
• 12:19
  SPEAKER_01: Okay, good.
• 12:20
  SPEAKER_01: Good, good.
• 12:20
  SPEAKER_01: That Parkinson's is just terrible.
• 12:22
  SPEAKER_02: It is.
• 12:22
  SPEAKER_01: And they think that Parkinson's is gonna outpace dementia.
• 12:26
  unknown: Oh man.
• 12:27
  SPEAKER_01: Yeah.
• 12:27
  SPEAKER_01: Why is that?
• 12:28
  SPEAKER_01: We I would love to know why.
• 12:30
  SPEAKER_01: Why does that happen?
• 12:31
  SPEAKER_00: Wait for that podcast when you have that person on the top.
• 12:33
  SPEAKER_00: We'll find out.
• 12:34
  unknown: There you go.
• 12:35
  SPEAKER_01: But and also those medications, we I did have Laura Cohen, who is the only, she owns she owns three uh residential assisted livings.
• 12:44
  SPEAKER_01: They are the only ones so far in Maricopa County, or as far as we know, the state of Arizona, that are certified in Parkinson's.
• 12:52
  SPEAKER_01: No kidding.
• 12:53
  SPEAKER_01: Yeah, they're certified.
• 12:54
  SPEAKER_01: And she serves as president of the board of the Parkinson's Foundation of Southwest.
• 12:59
  SPEAKER_00: Oh, no kidding.
• 12:59
  SPEAKER_01: So yeah, so she's a really great resource that I'll definitely give you.
• 13:03
  SPEAKER_00: Oh, please do.
• 13:04
  SPEAKER_01: Um, but um, yeah, so she specializes in it.
• 13:07
  SPEAKER_01: And one of the biggest things is having that medication to them on the dot.
• 13:12
  SPEAKER_01: Exactly.
• 13:13
  SPEAKER_01: Right?
• 13:13
  SPEAKER_01: Right.
• 13:13
  SPEAKER_01: And you might take four, it might take that one medication that stops those tremors four times a day, and you have to take it right at eight o'clock.
• 13:22
  SPEAKER_01: Exactly.
• 13:22
  SPEAKER_01: You so a lot of times we talked about being in like a bigger community, they just can't service that.
• 13:28
  SPEAKER_01: They can't, they can't be there right at eight o'clock for that patient.
• 13:31
  SPEAKER_01: They can't and now the state says you can be an hour before or an hour after with any medications, but not with Parkinson's, right?
• 13:38
  SPEAKER_01: Well, they the state still allows it.
• 13:40
  SPEAKER_01: They don't they don't exclude Parkinson's.
• 13:44
  SPEAKER_01: But the patient suffers because unless you catch it right on that hour, right?
• 13:48
  SPEAKER_01: Right.
• 13:49
  SPEAKER_01: Yeah.
• 13:49
  SPEAKER_01: Is that are your is your dad experiencing the same thing?
• 13:51
  SPEAKER_01: Exactly.
• 13:52
  SPEAKER_01: Yeah.
• 13:52
  SPEAKER_00: Yeah.
• 13:52
  SPEAKER_00: Yeah.
• 13:53
  SPEAKER_00: So it's it's critical that the timing and he's doing as well as he can.
• 13:57
  SPEAKER_00: We're really happy with the care that he's getting.
• 13:59
  SPEAKER_00: So perfect.
• 14:00
  SPEAKER_00: Yeah.
• 14:00
  SPEAKER_00: That's great.
• 14:01
  SPEAKER_01: That's great.
• 14:02
  SPEAKER_01: That's great.
• 14:03
  SPEAKER_01: Yeah.
• 14:04
  SPEAKER_01: And I think that um both of our industries are gonna start to really merge uh as a result of the baby boomers.
• 14:12
  SPEAKER_00: Oh my gosh.
• 14:13
  SPEAKER_01: You know, eighty this year.
• 14:15
  SPEAKER_01: Right.
• 14:15
  SPEAKER_01: So just the first of them, 1946.
• 14:18
  SPEAKER_01: Right.
• 14:18
  SPEAKER_01: Are 80.
• 14:19
  SPEAKER_01: Okay.
• 14:19
  SPEAKER_01: So that was our first year that we had baby boomers.
• 14:22
  SPEAKER_01: So we have this huge bubble, right?
• 14:24
  SPEAKER_01: And so I'm thinking that we're gonna be talking to people that are selling their businesses, that are selling their homes, that are doing more and more things, a change of life, a change, you know, you have all these other ideas like people go and live on cruise ships.
• 14:39
  SPEAKER_00: Right.
• 14:39
  SPEAKER_00: You know I I've heard the same.
• 14:41
  SPEAKER_00: You know, they buy a more a motorhome and take off for two years.
• 14:44
  SPEAKER_00: Right.
• 14:44
  SPEAKER_00: God bless them.
• 14:45
  SPEAKER_00: That's awesome.
• 14:46
  SPEAKER_02: Yeah.
• 14:46
  SPEAKER_00: You know, and then you come home.
• 14:47
  SPEAKER_00: Right.
• 14:47
  SPEAKER_00: And you're like, okay, well, we sold the house to buy the motorhome.
• 14:50
  SPEAKER_00: Now we're selling the motorhome.
• 14:51
  SPEAKER_00: What are we gonna do next?
• 14:52
  SPEAKER_00: What are we gonna do now?
• 14:52
  SPEAKER_00: Maybe, maybe a senior living a great idea.
• 14:55
  SPEAKER_00: And they can roll right into something like that and enjoy an amazing lifestyle for the rest of their life.
• 15:00
  SPEAKER_01: Right.
• 15:00
  SPEAKER_01: And I think what a lot of people don't understand with those reverse mortgages, again, the big one is that they think they gave it to the house, gave it to the bank.
• 15:08
  SPEAKER_01: Um, so that's the big one.
• 15:10
  SPEAKER_01: There was another one about that equity.
• 15:13
  SPEAKER_01: Um, that you could they don't allow you to take out all of your equity anymore.
• 15:19
  SPEAKER_01: They don't let you mortgage that up.
• 15:20
  SPEAKER_00: It's it's age-related.
• 15:22
  SPEAKER_00: So the older you are, okay, the more you can borrow against the value of the home.
• 15:26
  SPEAKER_01: The older you are.
• 15:27
  SPEAKER_00: The older you are.
• 15:28
  SPEAKER_00: Why do you think that would be?
• 15:29
  SPEAKER_01: I because you're gonna pass.
• 15:31
  SPEAKER_01: Exactly.
• 15:33
  SPEAKER_00: Because the the the idea is let's just use some really round numbers.
• 15:37
  SPEAKER_00: Let's say the home is worth a million dollars.
• 15:39
  SPEAKER_02: Yeah.
• 15:40
  SPEAKER_00: And if you're 62, you'll be lucky to borrow about$400,000 against the million dollars.
• 15:46
  SPEAKER_00: So that leaves a lot of equity in the house.
• 15:48
  SPEAKER_01: 60%.
• 15:48
  SPEAKER_01: Yeah.
• 15:48
  SPEAKER_00: And realize that the idea at 62%, there's something that you're gonna live another 20 or 25 years.
• 15:52
  SPEAKER_00: So, yeah, it's a good thing.
• 15:53
  SPEAKER_00: Do you need money?
• 15:54
  SPEAKER_00: Well, interest is gonna accrue on that loan.
• 15:56
  SPEAKER_00: Oh, yeah.
• 15:56
  SPEAKER_00: The bank is worried, the bank is risk averse.
• 15:59
  SPEAKER_00: The bank is worried that the value of the home might flatten out while the balance is going up.
• 16:03
  SPEAKER_00: Oh and worst case scenario, the borrower when they passed or decide to move is upside down on the phone.
• 16:09
  SPEAKER_00: I would say owe more on the home than it's worth.
• 16:11
  SPEAKER_00: Right.
• 16:12
  SPEAKER_00: So the older you are, the less likely that's gonna be the case.
• 16:15
  SPEAKER_00: So when you get into your 70s and 80s, it's more like 50 percent that they'll lend you, or even 60 percent that they'll lend you on the assumption that you don't have as much time for that balance to grow and for you to be upside down on the mortgage.
• 16:28
  SPEAKER_00: Right.
• 16:29
  SPEAKER_00: So and we also have reverse mortgages.
• 16:32
  SPEAKER_00: The typical reverse mortgage, which was the reverse mortgage act signed by President Ronald Reagan in 1986, was a very conservative loan product.
• 16:41
  SPEAKER_00: And they decided to make it an FHA loan.
• 16:44
  SPEAKER_00: Now, with FHA loans, we think first-time buyers, it's a government-backed program, government insured program against default, and it is, it's a great loan program.
• 16:52
  SPEAKER_00: But on the complete polar opposite is the reverse mortgage, also called a HECM home equity conversion mortgage, which is also an FHA insured loan.
• 17:01
  SPEAKER_00: So the banks are willing to make these loans knowing that they're insured against loss in case the loan balance increases to be more than the value of the home.
• 17:10
  SPEAKER_01: Yeah, so now they're protected.
• 17:11
  SPEAKER_00: Exactly.
• 17:12
  SPEAKER_00: Okay.
• 17:12
  SPEAKER_00: Now there are uh proprietary reverse mortgages now as well.
• 17:17
  SPEAKER_00: So not FHA loans.
• 17:19
  SPEAKER_02: Okay.
• 17:19
  SPEAKER_00: These are reverse mortgage companies that understand the industry, they understand the business, and they're willing to make loans to borrowers who aren't 62 years old.
• 17:27
  SPEAKER_00: Oh, okay.
• 17:28
  SPEAKER_00: So you have to be at least 55 instead of 62 to qualify for the HECAM, the FHA version, you can be just 55 or older with enough equity in the property, they'll do a reverse mortgage.
• 17:37
  SPEAKER_02: Oh, okay.
• 17:38
  SPEAKER_00: And so the reverse, as opposed to a forward mortgage, a forward mortgage means your balance is going down every month and payments are required.
• 17:44
  SPEAKER_02: Yeah.
• 17:44
  SPEAKER_00: The reverse is the reverse.
• 17:45
  SPEAKER_00: Your balance is literally going up every month, right?
• 17:48
  SPEAKER_00: And you're not being required to make payments on that.
• 17:50
  SPEAKER_00: So by we can do a reverse mortgage for somebody 55 or older that has a lot of equity in the home because at 55, they just assume that's a lot of runway.
• 17:59
  SPEAKER_00: We hope, right?
• 17:59
  SPEAKER_00: Yeah.
• 17:59
  SPEAKER_02: We hope.
• 18:00
  SPEAKER_00: Exactly.
• 18:01
  SPEAKER_00: So we've even had reverse mortgage second mortgages now.
• 18:04
  SPEAKER_00: You could have a conventional first mortgage and take out a reverse mortgage second.
• 18:08
  SPEAKER_00: And we're doing these for clients who have maybe they're they're ready to retire.
• 18:12
  SPEAKER_00: But they feel like in retirement they can still afford to make that mortgage payment.
• 18:16
  SPEAKER_00: And besides, they got that two and a half percent interest rate from Christopher five years ago.
• 18:20
  SPEAKER_00: So it's like I hate to give up that interest rate.
• 18:23
  SPEAKER_00: We can afford to make that payment, but we have two-car payments, we've got, you know, some other credit card debt, we've got whatever else they have, or maybe they need some some money to help improve the home.
• 18:32
  SPEAKER_00: Right.
• 18:32
  SPEAKER_00: We can now do a second mortgage as a reverse mortgage, no payments required, smaller balance, slightly higher interest rate, and we can do that in second position, which is kind of a cool point.
• 18:42
  SPEAKER_01: Wow, I had no idea.
• 18:43
  SPEAKER_01: I know, it's why I'm here.
• 18:44
  SPEAKER_01: I had no idea.
• 18:45
  SPEAKER_01: That is amazing because yeah, because our industry regularly sells against reverse mortgages.
• 18:53
  SPEAKER_01: Why do we do that?
• 18:54
  SPEAKER_01: We do that because they usually or they had been getting out all that equity and then spending it.
• 19:02
  SPEAKER_01: Ah and so now they have no way of taking care of themselves for assisted living.
• 19:06
  SPEAKER_01: Yep.
• 19:07
  SPEAKER_01: And usually, in many, many many cases, the equity in the home is what's going to help them take care of them.
• 19:14
  SPEAKER_00: And allow them to get into something like that.
• 19:15
  SPEAKER_01: Right.
• 19:16
  SPEAKER_01: Absolutely.
• 19:16
  SPEAKER_00: I totally agree.
• 19:17
  SPEAKER_01: So that is why I wanted to have you on, because we all sell against it.
• 19:21
  SPEAKER_01: You know, oh God, don't take a reverse mortgage.
• 19:24
  SPEAKER_01: But with your knowledge and with your understanding of all the nuances and the whole situation, then we have somebody safe that can say, you know, yes, this is a good idea.
• 19:34
  SPEAKER_00: We've talked so many times where you've had clients that while senior living sounds like a good idea, they're just not quite ready.
• 19:40
  SPEAKER_02: Yeah.
• 19:40
  SPEAKER_00: Right.
• 19:40
  SPEAKER_00: And the and the thought is, well, but they're in a financial position where they're things are tight.
• 19:46
  SPEAKER_02: Yeah.
• 19:46
  SPEAKER_00: Are they going to have to sell?
• 19:47
  SPEAKER_00: They're going to sell the house because they have debt to pay off, and he's finally going to retire.
• 19:52
  SPEAKER_00: Right.
• 19:53
  SPEAKER_00: But they can't afford to stay if they don't.
• 19:54
  SPEAKER_00: Well, the other option would be to take a reverse mortgage, do consolidation, stay in the home.
• 19:58
  SPEAKER_01: Stay in the home.
• 19:59
  SPEAKER_00: Let it continue to increase in value.
• 20:01
  SPEAKER_00: Because if you end up moving into something smaller or renting for a while because you're not ready to move into senior living, you've lost all the equity that would you would have gained by continuing to own the home.
• 20:10
  SPEAKER_00: That's right.
• 20:10
  SPEAKER_00: Yeah.
• 20:10
  SPEAKER_01: So we can't.
• 20:11
  SPEAKER_01: And that's a certain age group, right?
• 20:12
  SPEAKER_01: Right.
• 20:12
  SPEAKER_01: That's a certain age group.
• 20:14
  SPEAKER_01: And it's an absolutely good age group.
• 20:16
  SPEAKER_01: And I think that's one of the benefits of having you as a resource when we're talking to people and doing our seminars and doing our webinars is that those people need to understand that option and then understand that, hey, I'm not quite ready at 73 to move into an assisted living or into an independent living.
• 20:34
  SPEAKER_01: Right.
• 20:34
  SPEAKER_01: Because probably most of the people there are 10 years older than you at 73.
• 20:38
  SPEAKER_02: Okay.
• 20:39
  SPEAKER_01: However, you could do something like this, like really have a super good plan.
• 20:44
  SPEAKER_01: Oh, yeah.
• 20:44
  SPEAKER_01: Like say, here's what we're going to do with the reverse mortgage.
• 20:47
  SPEAKER_01: Right.
• 20:48
  SPEAKER_01: Now, the other thing is we can keep people out of being greeters at Walmart and have more peace of mind.
• 20:56
  SPEAKER_00: Required part-time job.
• 20:57
  SPEAKER_01: Required part-time job is super str stressful.
• 21:01
  SPEAKER_01: Although it keeps them active.
• 21:02
  SPEAKER_01: You know, they, you know, whatever.
• 21:04
  SPEAKER_01: But there is an upside to it.
• 21:06
  SPEAKER_01: But there's a lot of stress to that too, especially if you're not feeling well one day and you can't make it maybe three days, or you go into the hospital, you're out of a job.
• 21:14
  SPEAKER_00: Exactly.
• 21:14
  SPEAKER_00: Yeah.
• 21:15
  SPEAKER_01: And now you're out of that income.
• 21:16
  SPEAKER_01: Exactly.
• 21:17
  SPEAKER_01: Right?
• 21:17
  SPEAKER_01: Very similar to your parents.
• 21:18
  SPEAKER_01: Yeah.
• 21:18
  SPEAKER_01: Right?
• 21:19
  SPEAKER_01: Very much.
• 21:19
  SPEAKER_01: So I think that this is an excellent way to kind of look at the whole thing holistically and have all those options so that people can really, really decide.
• 21:29
  SPEAKER_00: As you were saying that I'm thinking about most of the reverse mortgages and the clients I get referred to are coming from financial advisors or estate planning attorneys.
• 21:39
  SPEAKER_00: Because they've they've had that financial conversation, they trust their financial advisor, and their advisor says, you know what, as one of the options, I'm going to have somebody I trust give you a call and talk about all of your loan options.
• 21:51
  SPEAKER_00: Right.
• 21:51
  SPEAKER_00: One of them might be a reverse mortgage.
• 21:53
  SPEAKER_02: Right.
• 21:54
  SPEAKER_00: And then so I I I come to them with some trust from the financial professional or the the legal professional.
• 22:00
  SPEAKER_00: Professional that they're working with to lay out those options for them.
• 22:02
  SPEAKER_02: Right.
• 22:03
  SPEAKER_00: And oftentimes it makes more sense for them to consider a senior living option as opposed to staying in the home.
• 22:09
  SPEAKER_00: Because if you're going to stay in the home, now we have to have ramps built.
• 22:12
  SPEAKER_00: We've got to have basically the home modified.
• 22:15
  SPEAKER_00: And while that's fine, it lowers the value of the home.
• 22:18
  SPEAKER_00: It lowers the value of the home.
• 22:24
  SPEAKER_00: And who's really there to take care of you?
• 22:26
  SPEAKER_00: Right.
• 22:26
  SPEAKER_00: Nobody's checking in on you on a regular basis.
• 22:28
  SPEAKER_00: Right.
• 22:28
  SPEAKER_00: All those benefits.
• 22:30
  SPEAKER_00: Exactly.
• 22:30
  SPEAKER_00: Yeah.
• 22:31
  SPEAKER_00: And so but at least laying out those options for them, they're fully informed of what their options are so that they can make an appointment.
• 22:37
  SPEAKER_01: And you've been to enough of my seminars now that you know that the risks of staying at home alone are very high.
• 22:44
  SPEAKER_01: And I don't think, and I'm going to work on this, is that a lot of financial advisors don't understand that piece.
• 22:50
  SPEAKER_02: Agreed.
• 22:50
  SPEAKER_01: Right?
• 22:51
  SPEAKER_01: I would agree.
• 22:51
  SPEAKER_01: They don't understand that if they have a fall or they have a heart attack or a stroke or they just decline and start having memory loss and take the wrong medications at the wrong time.
• 23:01
  SPEAKER_01: Right.
• 23:01
  SPEAKER_01: At the wrong times, or too many or overdose or, you know, whatever.
• 23:04
  SPEAKER_01: And then they end up in a hospital.
• 23:06
  SPEAKER_01: Now they can't go home.
• 23:08
  SPEAKER_02: Right.
• 23:08
  SPEAKER_01: And now their costs are four times.
• 23:10
  SPEAKER_01: Yeah.
• 23:11
  SPEAKER_01: Four to five times sometimes because of this delay and trying to stay in the home.
• 23:16
  SPEAKER_01: And financial advisors, I have one man, one couple who came to the seminar, absolutely loved it.
• 23:22
  SPEAKER_01: That mother the wife is ready to go.
• 23:25
  SPEAKER_01: And their financial advisor said, no, I think you need to stay in your house.
• 23:28
  SPEAKER_01: Wow, no kidding.
• 23:29
  SPEAKER_01: And that is so sad for both of them.
• 23:31
  SPEAKER_01: And he has a terminal disease.
• 23:33
  SPEAKER_01: So it's not good.
• 23:35
  SPEAKER_01: Yeah.
• 23:36
  SPEAKER_01: So financial advisors really need to understand it.
• 23:38
  SPEAKER_01: Mortgage people need to understand it.
• 23:40
  SPEAKER_01: But I'm kind of a person that kind of just starts to circle the wagons with the right people.
• 23:44
  SPEAKER_00: Right.
• 23:44
  SPEAKER_01: And uh I think you're my mortgage guy.
• 23:46
  SPEAKER_01: Thank you.
• 23:46
  SPEAKER_00: I appreciate your confidence and the time we spent together.
• 23:49
  SPEAKER_00: I think we both approach how we take care of our clients the same way.
• 23:52
  SPEAKER_00: Yeah.
• 23:52
  SPEAKER_00: And it's whatever whatever their needs are first.
• 23:55
  SPEAKER_00: We're just going to present the options, make sure that they're informed.
• 23:57
  SPEAKER_00: Right.
• 23:58
  SPEAKER_00: And then help them make the right decision.
• 23:59
  SPEAKER_01: And I and I think that, you know, not I I I uh when you were talking about being in this industry for 34 years, one of the things I'm always reminded of is 2008, 2005, when there were tons of people jumping into the mortgage industry.
• 24:15
  SPEAKER_01: Yeah.
• 24:16
  SPEAKER_01: Right.
• 24:16
  SPEAKER_01: And they were out of the mortgage industry like really fast.
• 24:20
  SPEAKER_00: Before licensing was required.
• 24:21
  SPEAKER_01: Right, right.
• 24:22
  SPEAKER_01: Before licensing was required.
• 24:23
  SPEAKER_01: Now you have to be licensed.
• 24:25
  SPEAKER_01: Oh, yeah.
• 24:25
  SPEAKER_01: Right?
• 24:25
  SPEAKER_01: Absolutely.
• 24:26
  SPEAKER_00: Licensed background check.
• 24:27
  SPEAKER_00: Yeah.
• 24:27
  SPEAKER_00: Constant continue education every year.
• 24:29
  SPEAKER_01: Yeah.
• 24:30
  SPEAKER_00: Yeah.
• 24:30
  SPEAKER_00: We've lost, you know, just in the last couple of years, with interest rates coming up from the 3% to the to the 6% range where we are now.
• 24:37
  SPEAKER_00: Yeah.
• 24:38
  SPEAKER_00: Um, we've lost 40% of licensed mortgage loan originators in that time period.
• 24:42
  SPEAKER_00: The downside is they're off to doing something else.
• 24:44
  SPEAKER_00: The upside is those of us that are professional, the full-time professional realtors, full-time professional loan originators, people in our industry who the general public is left working with are professionals like you and me to do what we do.
• 24:57
  SPEAKER_00: Yeah.
• 24:58
  SPEAKER_00: Not the part-timers, not the you know, just just jumped into the business because it looks like there was a quick buck to be made.
• 25:03
  SPEAKER_00: Yeah.
• 25:03
  SPEAKER_00: And that's not what we're here for, right?
• 25:05
  SPEAKER_00: Right.
• 25:05
  SPEAKER_00: We're here long term.
• 25:06
  SPEAKER_01: Yeah.
• 25:06
  SPEAKER_01: Yeah.
• 25:07
  SPEAKER_01: Yeah.
• 25:07
  SPEAKER_01: I think that um, yeah, I just had a thought and it left.
• 25:12
  unknown: Oh.
• 25:13
  SPEAKER_00: Senior moment.
• 25:14
  SPEAKER_00: How appropriate.
• 25:15
  SPEAKER_00: How appropriate.
• 25:17
  SPEAKER_01: Um, but uh yeah, I absolutely think that, you know, in fact, I always tell the story that when I first found Senior Living, it was a young guy, about 35, and his wife, and they were live-in managers at a community.
• 25:29
  SPEAKER_02: Oh wow.
• 25:30
  SPEAKER_01: And he was a it was 2010.
• 25:32
  SPEAKER_01: Okay.
• 25:32
  SPEAKER_01: And he was a former mortgage broker.
• 25:34
  SPEAKER_00: There you go.
• 25:35
  SPEAKER_00: I can't tell you how often I'll meet with a couple to talk about or anybody to talk about financing a home and the mortgage planning session that I do on Zoom.
• 25:43
  SPEAKER_00: Uh-huh.
• 25:44
  SPEAKER_00: Invariably, one of them will say, Well, you know, I was in the mortgage business for a while.
• 25:47
  SPEAKER_00: Yeah.
• 25:47
  SPEAKER_00: And I'm like, No kidding, when?
• 25:49
  SPEAKER_00: And he said, Well, 2005, I went out in 2008.
• 25:51
  SPEAKER_00: I'm like, rough times.
• 25:53
  SPEAKER_00: I remember I was there.
• 25:55
  SPEAKER_00: Yeah.
• 25:55
  SPEAKER_00: And you survived it.
• 25:56
  SPEAKER_00: Yep.
• 25:57
  SPEAKER_01: You survived it because you knew what you were doing.
• 25:59
  SPEAKER_01: And that's and I survived COVID because I knew what I was doing.
• 26:02
  SPEAKER_01: Right.
• 26:02
  SPEAKER_01: Exactly.
• 26:03
  SPEAKER_01: Right.
• 26:03
  SPEAKER_01: Nobody moved into any, everybody was like, we're not moving anywhere.
• 26:07
  SPEAKER_01: I did almost a million dollars for the company I was working for.
• 26:10
  SPEAKER_01: That's great.
• 26:11
  SPEAKER_01: Because I just kept helping people.
• 26:13
  SPEAKER_01: Right.
• 26:14
  SPEAKER_01: You know, just kept helping them.
• 26:15
  SPEAKER_01: And that's the priority.
• 26:16
  SPEAKER_01: Yeah.
• 26:16
  SPEAKER_00: People appreciate that.
• 26:18
  SPEAKER_00: And the business comes to you and to me with the when we lead with that.
• 26:21
  SPEAKER_00: That's right.
• 26:22
  SPEAKER_00: So I love that.
• 26:23
  SPEAKER_00: That's right.
• 26:23
  SPEAKER_00: Good.
• 26:23
  SPEAKER_01: Well, Christopher, thank you so much for joining me.
• 26:25
  SPEAKER_01: Can you believe it's over with?
• 26:27
  SPEAKER_01: No.
• 26:28
  SPEAKER_01: That was fast, huh?
• 26:29
  SPEAKER_01: It was.
• 26:30
  SPEAKER_01: It was great.
• 26:30
  SPEAKER_01: Thank you.
• 26:31
  SPEAKER_01: Appreciate you being here.
• 26:32
  SPEAKER_01: You're welcome.
• 26:32
  SPEAKER_01: All right.
• 26:33
  SPEAKER_01: So I really want you to go to a place for seniors.
• 26:37
  SPEAKER_01: If you're interested in more of this, I'm going to be uh providing seminars and webinars.
• 26:42
  SPEAKER_01: You can sign up for one of those on my website at aplaceforseniors.org, which is org.
• 26:49
  SPEAKER_01: Um, and I would love to see you at one of those.
• 26:52
  SPEAKER_01: And the webinars are going to be easy to attend.
• 26:54
  SPEAKER_01: They'll be at 12 and 6 on July 15th, which is next week.
• 26:58
  SPEAKER_01: And then we'll have more for you to be able to participate in.
• 27:01
  SPEAKER_01: We're getting great, great reviews and uh people are really enjoying them.
• 27:05
  SPEAKER_01: So thank you so much, and we'll see you next time.