Security and peace of mind with a reverse mortgage

by John Forte

Introducing people to the idea of a reverse mortgage can be challenging because it’s a highly misunderstood product,” Mike Poole says, “but once I get an opportunity to explain the facts and advantages to a customer, they’re usually  onboard.”

As a general rule, most financial arrangements can’t  be reversed to one’s advantage, but a reverse mortgage—technically known as a Home Equity Conversion Mortgage or HECM—is the exception to that rule. As a Reverse Mortgage Consultant for TowneBank, Mike is the point man for those who are considering this option.

Valuing his relationships with clients, Mike first seeks to understand their needs. The initial step might be to call them by phone, but 95 percent of the time, Mike finds himself going to meet them in person at their home. By dealing with a potential client’s questions and trepidation face to face, Mike is usually able to put their minds at ease.

“Often people want to buy a big ticket item like a new AC unit or roof repair, and even though they have a steady cash flow income, they don’t know where the money to pay for those items will come from,” Mike says with a knowing smile. “The reverse mortgage helps them out in such situations and gives them peace of mind. There’s no price tag for peace of mind.”

Bringing that confidence and assurance to those considering a reverse mortgage takes understanding and patience, and is best accomplished in one-on-one, face-to-face meetings. This is where Mike shines; he truly enjoys developing relationships by meeting and helping people. “This is not just a job for me,” he says, beaming. “I love what I do.” That love is a common bond that  Mike shares with TowneBank, which is a relationship-driven local bank that focuses on promoting the social, cultural, and economic well-being of the community. Approaching every situation with transparency and integrity, Mike is a perfect infusion of honesty into the community.

“...we were able to buy a nicer home
in a more desirable neighborhood
plus have money in the bank
and no mortgage payments.
Two years later,
we enjoy a wonderful peace of mind...
and recommend it to others.
We know we have a lovely home
for as long as we choose to live here.”

—Bob and Mary C.

When he first started working with the more mature clients who typically investigate reverse mortgages, Mike found that his honest approach was highly valued. “People appreciated my integrity and my being up front with them—including my ‘the good, the bad and the no surprises’ approach.” He chuckles at the fact that some of his clients have called him a “financial guardian angel” because of his fidelity to the guidelines and regulations established by the Federal Housing Administration.

Mike’s candor aides him in his approach to each and every customer. “No two people or situations are alike,” he says. “Everyone is unique, and  how they might want to use a reverse mortgage depends on their particular circumstances.”

Mike has found that people commonly use a reverse mortgage to either supplement their income, pay for home renovations, pay for their grandchildren’s college, maintain their lifestyle, cover cost-of-living increases or to establish greater financial security.

More recently Mike has been focused on getting the word out about using the HECM for Purchase Program. Borrowers age 62 or better can combine their down payment with a reverse mortgage to purchase a new home. They will have the option to make no monthly principal and interest mortgage payments, but will be responsible for payment of homeowners insurance, property taxes, maintenance and HOA fees, if applicable.

“For example,” Mike explains, “let’s say you are in your 70s, own your current home free and clear, but want to move closer to your children or to a community which offers less property maintenance and a more active lifestyle. If your current home is valued at $400,000 and the new home you are considering is roughly the same sales price, you could combine a down payment of $200,000 with a reverse mortgage loan to purchase the new home once your existing home is sold.  In this scenario you have accomplished many goals; purchased the home of your dreams, have the option of no monthly mortgage principal and interest payments, and have approximately $200,000 left in your pocket to invest or use however you like!”

“The end of this scenario is fairly simple,” Mike continues. “Let’s say that you will the house to your heirs. They have two options: they can keep the house or sell it. If they keep the house, they have to come up with the money for the reverse mortgage and any interest accrued.  If your heirs put the house on the market, for whatever the value is, they pay whatever is owed on it and keep the difference. All equity remains with your heirs or the estate. They must list the house for sale with a professional real estate agent so that a fair price will be put on it.”

“I cannot speak highly enough of the HECM for Purchase,” Gwen G. says enthusiastically after witnessing firsthand how the program helped her parents. “Weigh the benefits of having no house payment, of being able to buy a nicer home–of being able to upgrade to a safer home–of being able to have cash available each month to travel–or to pay medical expenses. Cash that would normally go to a mortgage payment is now parked in their bank account. Truly it is a great option.”

Another couple, Bob and Mary C., chose the HECM for Purchase when moving from their home of 29 years to a one-level condo. “By doing so, we were able to buy a nicer home in a more desirable neighborhood plus have money in the bank and no mortgage payments,” they explain. “Two years later, we enjoy a wonderful peace of mind with the decision and recommend it to others. We know we have a lovely home for as long as we choose to live here.”

There are five steps to the reverse mortgage process. First, potential customers are educated by Mike regarding the reverse mortgage and all of their questions are answered. Then their income and credit is carefully reviewed to insure all of the guidelines are met and the customer is a good fit for the program via the application process. Potential customers then receive mandatory counseling on the telephone from an agency certified by the Department of Housing and Urban development.  If the customer wants to continue, then an appraisal is ordered and an underwriter
reviews the application and appraisal for approval.  Shortly thereafter, the closing takes place.  All of this is done in the convenience of the customer’s home!

Mike truly relishes helping people. He remembers one instance a few years back when he was able to use a reverse mortgage to help  someone who was about to lose their home. He beams and simply says, “It was awesome.”  

Mike Poole, TowneBank Reverse Mortgage Consultant,
has helped seniors use a reverse mortgage to buy a new home.

Advertising materials are not provided or approved by the Department of HUD or FHA. Home must be occupied as principal residence, required taxes and insurance paid and make all necessary repairs to avoid deterioration of the property. When the house is sold, the loan, along with any interest and fees, are paid to the lender. Any remaining equity belongs to you or your heirs.  TowneBank Mortgage is a division of TowneBank. Information is accurate as of date of printing and is subject to change without notice. Homeowner to pay separately all required taxes and insurance.

* A full or partially funded set aside of proceeds may be required for payment of property charges on the new loan.

TowneBank Mortgage - Mike Poole

1435 Crossways Blvd.
Chesapeake, VA 23320