Reverse Mortgage Marketing Myths Debunked
Reverse mortgage marketing has been on an upswing over the past two decades. This growth is attributed to massive promotional efforts, including advertisements on television and online. Although the reverse mortgage was designed to give retirees the chance to keep their homes and manage the ever-rising cost of living, without proper advisement and guidance, there could be a lot of confusion. If you want to debunk some of these common reverse mortgage marketing myths for your readers and get great reverse mortgage marketing ideas for your campaign, keep reading.
What Is Reverse Mortgage Marketing?
A reverse mortgage is a residential property loan that allows the borrower to access the unrestricted value of the property. These loans are usually advertised towards senior homeowners and may not require monthly mortgage payments. Reverse mortgage marketing directs advertisements and messages to this audience of homeowners to encourage them to sign up for a reverse mortgage.
Myths of Reverse Mortgage Marketing Debunked
Myth #1: You need good credit.
While good credit is usually imperative when someone is seeking a loan like a mortgage, it is not a determining factor of approval for reverse mortgages. A reverse mortgage is strictly based on the equity of the home and the age of the homeowner. This rule also applies in situations where the homeowner’s income is not ideal. Neither income nor credit score is a qualifying factor for the approval of a reverse mortgage, so make sure you outline this in your marketing material.
Myth #2: The lender takes the title of your home.
Contrary to this myth, the title on a reverse mortgage functions the same way as any other mortgage. Only the homeowners are on the title. When the house becomes vacant or is sold, the loan must be repaid; however, the title is never on the table for negotiation.
Myth #3: You can’t get a reverse mortgage if you already have a mortgage.
Signing up for a reverse mortgage will pay off the existing mortgage, thereby eliminating any monthly payments the homeowner is currently burdened by. This is one of the most common and wise ways seniors use their funds from their reverse mortgage.
Myth #4: My children will need to repay the loan.
If the property is sold to pay off the mortgage when a senior passes away, or if they choose to leave the home for any reason, there will be no debt for their heirs to repay. Reverse mortgages are “non-recourse” loans and the maximum amount owed is the current market value of the property. If, however, their family chooses to keep the home, they would pay the full balance to the reverse mortgage lender.
Myth #5: Reverse mortgages are for low-income seniors.
Reverse mortgages are available to seniors of all income levels. For some, a reverse mortgage is a way for them to eliminate burdensome monthly mortgage payments and gain increased economic freedom. Other seniors choose a reverse mortgage as a financial safety net for unexpected bills. Reverse mortgages also work for seniors who want to live their retirement comfortably without worrying about making ends meet. This kind of mortgage is not only for low-income seniors in a crunch—it accommodates all kinds of seniors looking to get the most out of their retirement years.
Myth #6: There are restrictions on how I can use my reverse mortgage proceeds.
There are no restrictions on how someone can use the proceeds; however, it is very unwise to spend the money frivolously. The lenders’ leniency may tempt some homeowners to go wild, but they will regret spending the money in hindsight when genuine financial concerns arise, or when there is little equity left in the home. Seniors can use the proceeds to pay off debts, help their kids, or as a source of monthly income for life.
Myth #7: The bank sells my home when the reverse mortgage is due.
The title and ownership of the home belongs to the homeowner, not the bank or lender. Although it is common for the borrower or heirs to sell the home in an effort to repay the loan, it is not necessary and is completely up to the owner. Refinancing the home is another option to repay the loan.
Myth #8: Proceeds will impact Social Security and Medicaid benefits.
In most cases the reverse mortgage proceeds will not affect these payments and benefits. Depending on the situation, the proceeds may affect benefits if borrowers receive any support from the federal Supplemental Security Income (SSI) program, Medicaid, and other state-administered programs. Before signing up for a reverse mortgage, it is a good idea to speak with a financial advisor and the respective governmental agencies for advice.
Let Macromark Help You
Direct mail marketing, remnant ads, blogs, and other digital platforms are great ways to attract seniors to reverse mortgages. However, it is vital that you share accurate and truthful information with seniors seeking a reverse mortgage. You must highlight the value of these programs and show them why it can improve their lives.
At Macromark, we understand the value of quality, honest, and effective marketing. We offer our clients all they need to begin their reverse mortgage advertising campaign. We broker the most responsive lists in the industry and help you reach your campaign goals. If you’d like to know more about kick-starting your next reverse mortgage campaign, contact us today.
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