New Use of Established Consumer Loan Product Being Discussed

by Tim Harder, Vice President-Business Development, 1st Reverse Mortgage USA

Once considered a seldom-used alternative to enabling retirees to remain in their homes and supplement their income, the reverse mortgage is getting a second look in some circles.

Investment advisor Scott Burns, founder of AssetBuilder, points to the recent publication of commentary and research that could popularize a decidedly different use for reverse mortgages. A conventional use of a reverse mortgage allowed cash-pressed older homeowners in their middle or late retirement years to keep their homes and use the borrowed funds any way they wish.(1)

Under an alternative paradigm, a homeowner with some assets in addition to equity in the home might take out a reverse mortgage in early retirement, and use withdrawals to postpone or decrease withdrawals from the investment portfolio.(2) The underlying idea is that keeping the retiree’s portfolio substantially intact and yielding returns for as long as possible will increase the likelihood of those assets lasting a lifetime.

Following this line of logic, it’s reasonable to imagine the potential reverse mortgage market could comprise numerous profiles. Tomorrow’s reverse mortgage borrower could have substantial retirement savings beyond home equity—and, by choice, could use a reverse mortgage line of credit as a retirement planning tool.

Your community bank can participate in a turnkey opportunity to make reverse mortgages available to your mature customers, attract new clients, and create an additional income stream—all with little to no investment and minimal program maintenance. Learn more about the Bankers’ Bank of the West-endorsed 1st Reverse Mortgage USA Lender Network by calling Tim Harder at 303-854-3030 or emailing


(1) Burns, Scott (April 13, 2012). “Reverse Mortgages: Their Time has Come.” AssetBuilderSM. [Retrieved July 21, 2012 from ]

(2) DeMasters, Karen (April 18, 2012). “Evensky: New Choice May Preserve Portfolios, Lower Cash Reserve Needs.” Financial Advisor. [Retrieved July 12, 2012 from