Will reverse mortgages threaten retirement?

A client walks into your office and makes an admission you don’t want to hear: “I have a reverse mortgage.”

All along, you’ve believed the house was paid for (which, of course, it was) and thought the client was tracking well for retirement. Now, you face the prospect of having to help him retire thousands in debt, and possibly even refinance what’s owed in a rising-interest-rate environment.

Similar problems arise when a look at tax forms reveals income you didn’t know about – and that “income” turns out to be a home equity line of credit.

While it’s unlikely you’ll go from discussing retirement plans to working out ways to help clients avoid foreclosure, it is important to understand how reverse mortgages affect your older clients.

And, you may need to brush up on your debt counselling to ensure that if clients have in fact borrowed the ranch, they can also pay it off.

Reverse mortgages soar

If your clients have them, you can take some small solace in knowing they’re part of a trend.

For some clients RMs have merit

It’s okay to borrow, as long as home owners use the cash for renovations that boost the value of the asset.

Wealthy Barber weighs in on reverse mortgages

David Chilton has his doubts about the merits of seniors borrowing against their futures.

The surprise second mortgage

Home equity credit lines are a little more popular than most advisors would like.

Debt denial runs deep

Clients apply flawed reasoning when they try to explain their debt pictures.

Don’t rely on home equity in retirement

A recent report from Stats Canada says home equity makes an important contribution to retirement income.

Pay down the mortgage or fund the RRSP?

A shifting interest rate picture has clients wondering where to put funds.

Help clients age in place

For some retired clients, a reverse mortgage is the best option for keeping the house.

Reverse loan rules tightened

Canada has made an effort to ensure its mortgage rules aren’t as lax as those in other countries.