And reverse mortgage loans aren’t taxed, so they can help advisors manage clients’ tax liabilities as they start tapping assets for retirement.
Longbridge plans of have its own modeling software up on its website next Monday to help advisors analyze how reverse mortgages will impact clients. “Traditional [financial planning] software doesn’t account for a home,” Pfau said. The usual assumption is to assume depletion of a portfolio, then analyze use of a reverse mortgage, he said.
In response to an advisor’s comment about the difficulty of explaining reverse mortgages to clients who think there’s a big commission on the product, Mayer said Longbridge’s software might help. (The lender makes its money on client loans). “The big money for us is where a client borrows money over time” rather than on an upfront commission.
Mayer added that advisors can’t quote the product without a mortgage license, so urged advisors to refer clients to a mortgage broker who can make loans.