NewRetirement is pleased to offer this interview with Jeff Taylor. Taylor is Vice President — Senior Products Group — at Wells Fargo Home Mortgage, Inc. According to HUD, Wells Fargo was the number one retail originator of HECM reverse mortgages in the nation in 2006. With over 35 years of experience in mortgage banking, Taylor is also the founding chairman and is a member of the board of directors of the National Reverse Mortgage Lenders Association (NRMLA). Perhaps of equal interest to NewRetirement.com visitors, Taylor’s own mother has chosen to follow his advice and now has a reverse mortgage on her own home.
NewRetirement: Why do you believe that we see more and more interest in Reverse Mortgages now? Jeff Taylor: The desire to "age-in-place" or staying in one's home for as long as possible is the goal of many older Americans. In fact, the American Association of Retired Persons (AARP) has conducted a survey repeatedly over the past 20 years that shows – when given a choice – more than 84 percent of older adults want to grow old in their own homes.
In addition, a recent survey by AARP found that 75 percent of seniors fully expect to stay in their house for the rest of their lives; 51 percent said they would make changes to their home so that could happen.
Older adults often tell us they are more comfortable and happy staying in their own home.
NewRetirement: Is it a good idea for aging Americans to stay in their family home as they age? Jeff Taylor:As it stands, most American homes are designed for able-bodied, younger adults. Eventually, getting up and down the stairs will be an issue. For many seniors, home modifications will be part of the plan if they want to stay in their home for the rest of their lives.
NewRetirement: But, these home modifications can be expensive. Should Reverse Mortgages be used to fund home modifications? Jeff Taylor:A Home Equity Conversion Mortgage (HECM) is one way to pay for those modifications. Using home equity through a reverse mortgage can be an important part of the strategy that helps a senior deal with the financial challenges of staying in one's home.
As many older adults approach retirement, they realize their major asset is likely to be their house. By the time the average person retires, they own a home that's usually worth more than they paid for it. It's pretty amazing that a senior can receive tax-free proceeds from their house, and get the ability to make their home a place where they control their independence, dignity and quality of life.
The acceptance of reverse mortgage financing as a way to pay for home modifications is the alternative that may stave off a move to assisted living or a nursing home.
NewRetirement: What kind of modifications can be done and how are seniors learning about these changes? Jeff Taylor:Interestingly, many baby boomers – watching what their parents are going through – are making changes to their homes now, long before accessibility is even an issue and ensuring that their plans to age in place can be carried out as well.
Design improvements might include:
These types of modifications can enhance one's enjoyment of a home for years to come, but even more practical, the movement toward universal design or making a home work for nearly everyone makes a house safer. Changes to a house that benefit its graying owners, such as installing slip-resistant tiles in a bathroom, also benefit the future buyer who may have small children.
NewRetirement: Who should seniors consult regarding making decisions about what to do to their house? Jeff Taylor:There are many resources available to help seniors evaluate their homes and determine their needs, plan solutions and compare costs. Interior designers, builders and remodeling contractors – even occupational therapists – can provide advice on ways to improve one's home to suit the changing needs that come with age.
In addition, a reverse mortgage consultant can help seniors get information about how a reverse mortgage can pay for these home modifications.
NewRetirement: So you think it is prudent to use a Reverse Mortgage as a financial tool to enable seniors to age in place? Jeff Taylor:Making a home secure for an older person is not giving into old age, it's just plain smart. But, seniors tend to be cautious spenders. After a lifetime of mortgage payments, putting children through college or repaying loans, this group is leery of venturing into debt in their golden years.
Reverse Mortgages are now a proven concept. Seniors are more open to using their home equity as a useful source of funds that can help them stay in their home years after they retire.
It comes down to something simple: there's no place like home.
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