Retirement planning isn’t just about finances—it’s about creating a secure future while considering the people who matter most to you. Big financial decisions, like exploring a reverse mortgage, can raise questions and concerns among your family and loved ones. Open and informed conversations are a great way to get everyone on the same page and ensure your plans align with your goals and priorities.
If you’re considering a reverse mortgage, you might be wondering how to bring it up with your loved ones. These conversations can feel intimidating, but they don’t have to be. With the right approach, you can make sure your loved ones understand your decisions and feel reassured about your financial future
Let’s start by breaking down the basics of a reverse mortgage—then we’ll share tips to help you navigate these discussions with confidence.
Reverse Mortgage Basics
A Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, is a powerful financial tool that allows homeowners aged 62 and older to unlock their hard-earned home equity. It provides access to cash without requiring you to sell your home or make monthly mortgage payments, as long as you stay current with property taxes, insurance, and maintenance. Unlike a traditional mortgage, the loan only becomes due when a maturity event occurs, such as when the last borrower no longer resides in the home.
One of the most appealing features of a reverse mortgage is its flexibility. You can choose how to receive your funds:
- A single lump sum
- Monthly payments
- A line of credit
- A combination of these options1
Which one you choose will of course depend on your financial goals and personal situation. Once you’ve accessed your funds, the choice of how to use them is entirely yours. Whether you want to renovate your home, cover daily expenses, consolidate debt, or simply enhance your retirement lifestyle, a reverse mortgage can provide the financial freedom to do so.
Another key advantage? Reverse mortgages are non-recourse loans. This means that neither you nor your heirs will have to pay more than the loan balance or the appraised value of the home at the home at the time it is sold. And, if the home’s value exceeds the loan balance, the remaining proceeds go to you or your heirs.
While it’s true that using a reverse mortgage could ultimately reduce the inheritance passed to your loved ones, it also allows you to enjoy a more secure and fulfilling retirement—right from the comfort of your home. That’s what makes the program such a helpful solution for many older adults today.
How to Discuss Reverse Mortgages with Your Loved Ones
When discussing a reverse mortgage, it’s natural for your family to have questions—like how it affects their future or your financial security. That’s why thoughtful, transparent communication is key. To help navigate these conversations, we turned to Melanie Parks, VP, of National Field Sales for professional insight.
Melanie not only brings over 20 years of industry expertise, but she also understands these discussions on a personal level. She’s helped one of her own family members secure a reverse mortgage, giving her firsthand experience in addressing concerns, answering questions, and ensuring loved ones feel confident in the decision. This unique perspective allows her to approach this discussion with both professional knowledge and personal empathy—a winning combo!
Q: Do you believe it’s important for homeowners to discuss the decision to get a reverse with their loved ones?
A: Absolutely, and for several reasons. First, families are often closely involved in our clients’ lives and naturally want to understand the decisions being made. Including loved ones in the conversation allows their questions and concerns to be addressed upfront by a knowledgeable source. This can foster understanding and ensure everyone is on the same page.
That said, there are situations where clients prefer to keep this decision private. This might occur when someone feels their family could potentially take advantage of their financial situation or create undue pressure. However, those instances are rare.
Q: What are some tips for broaching the subject?
A: When starting this conversation, it’s helpful to let your family members know that you’re exploring a reverse mortgage as an option and would like them to be part of the discussion. Consider inviting them to join you during a meeting with your loan officer or the company you’re working with. This can be done in person, over the phone, or even virtually via video chat to make it accessible for everyone.
You might say something like, “I’d love for you to be part of this conversation so you can hear what I’ve learned, understand how it works, and see if it aligns with my goals.” Often, when family members understand the reasoning behind the decision and how it can help achieve specific objectives, it removes any uncertainty or misconceptions.
For example, seeing the bigger picture—such as how home equity continues to grow even as the loan balance increases—can reassure them that equity may still be available for inheritance.
This decision can often relieve financial pressure on family members, too. For instance, if they’ve been helping with bills, taxes, or other expenses to support their loved one aging in place, a reverse mortgage can ease that burden. By explaining how the solution addresses your goals while also providing relief for the family, you can foster understanding and support for your decision.
Q: Who should be involved in the conversation? Anyone beyond family, like financial advisors?
A: We encourage our loan officers to ask upfront if there are any key influencers in the client’s life—whether family members or professionals—who should be part of the discussion. Including these individuals from the beginning helps clear up misconceptions, ensures everyone understands how the product works, and demonstrates how it aligns with the client’s goals.
Involving a financial advisor can be especially beneficial. Their expertise can provide additional insight and reassurance, helping both the clients and their family feel confident in the decision.
They key is transparency. Inviting loved ones and advisors to join the conversation allows them to ask their own questions, fostering understanding and breaking down any walls of uncertainty. When everyone has the opportunity to engage openly, it transforms the process into a collaborative and reassuring experience.
Q: Where can borrowers and their loved ones access educational resources?
A: There’s a great educational piece from the National Council on Aging called “Use Your Home to Stay at Home.”2 It’s a bipartisan, fact-based document that provides a solid overview of revere mortgages. However, while it’s a great starting point, it doesn’t offer the personalized insights you’ll need to make an informed decision specific to your circumstances.
That’s why meeting with a local loan officer or representative is so important. They can help you assess how a reverse mortgage aligns with your unique financial goals and explain the details in a way that makes sense for your situation. This is also the perfect time to include family members, financial advisors, accountants, or other trusted individuals in the conversation.
The next step in the process is a mandatory counseling session. Borrowers are welcome to invite family members or advisors to join this session, ensuring everyone involved has the opportunity to listen, ask questions, and fully understand the loan’s implications. This collaborative approach provides clarity and confidence as you move forward.
Q: Do you have any personal experiences with reverse mortgages that might be helpful for people to hear?
A: Absolutely. One of the most impactful stories I can share is about my grandmother. Over 20 years ago, a financial advisor friend introduced me to reverse mortgages. My first reaction? “No thank you. That’s where the bank takes your house.” But my friend encouraged me to do my own research, so I did. What I discovered completely changed my perspective.
After learning more, my first thought was, “Why doesn’t my grandmother know about this?” She was a widow with her home fully paid off. From the outside, it seemed like she was set—she had my grandfather’s California Highway Patrol pension, excellent insurance, annuities, and investments. But what I knew was that she was living in fear of running out of money. She wouldn’t spend on anything beyond necessities.
So, I asked her, “Grandma, if money wasn’t an issue, what would you do?” Her list poured out: a new TV, DVDs she wanted at the time, long-term care coverage, a walk-in tub, new flooring, a fresh coat of paint, a new roof, and new windows. She had so many dreams, but fear held her back.
That’s when I told her about reverse mortgages. Her house was paid off, and she’d lived there for 40 years, but her equity was locked away. She didn’t want a traditional loan with monthly payments, so a reverse mortgage was the ideal solution. It allowed her to access her home’s equity without worrying about monthly payments—all she had to do was keep up with obligations like property taxes, homeowners insurance, and maintenance.
With the funds, my grandma checked off every item on her list. She lived another 20 years in her home, even refinancing her reverse mortgage three times to access more equity as her needs changed. When she passed away two years ago, there was still equity left, which she was able to pass on to her children. It was truly a win-win.
I’ve also seen success with my in-laws, who’ve had their reverse mortgage for 17 years. Their situation was different—they were paying $1,200 a month on their mortgage. By switching to a reverse mortgage, they eliminated that monthly payment3 and used the savings to enjoy summers at the beach. The same money that went toward their mortgage now funds their coastal escapes.
Reverse mortgages are incredibly versatile. Whether it’s maintaining your home, eliminating monthly mortgage payments,3 or simply enjoying your retirement to the fullest, they provide a unique solution tailored to each individual’s needs.
Ready to Start the Conversation?
As Melanie shared, reverse mortgages can open the door to countless possibilities, empowering you to live the retirement you’ve envisioned. Whether it’s renovating your home, increasing cash flow, or simply enhancing your financial peace of mind, the flexibility of a reverse mortgage lets you prioritize what matters most to you.
Like any major financial decision, it’s important to start with research and then consult a reverse mortgage professional who can evaluate your unique circumstances. When the time feels right, you can include your family and trusted advisors in the conversation to ensure everyone is informed and aligned.
Every situation is unique, and personalized guidance is key. At Longbridge Financial, our experienced loan officers are here to listen, provide clarity, and provide you with the information you need to make a well-informed decision. Our team will get to know you, your family, and your financial goals as we explore your options. Take the first step toward your retirement goals today—contact our team to start the conversation!
