By Sue Haviland
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As Baby Boomers (those born between 1946 and 1964) approach retirement age, they are having a real impact on the real estate market and the economy in general. This is the largest generation in our country’s history, numbering close to 78 million.

As Boomers drive the demand for senior-friendly housing across the U.S., are you ready for the challenge? Those professionals looking to cater to the “active adult” residential market should know about the latest trends in reverse mortgages. This financing option is not just for seniors staying in an existing home.

There are a few ways to build your business and enhance your position in the industry as a specialist with the seniors market by using the reverse mortgage as a financing tool. “Most people are not aware of the evolution that the reverse mortgage product has taken through the years,” according to Arletha “Candy” Myer, a REALTOR® from Maryland. “It is our responsibility to re-educate them, which in turn will help them understand all of their mortgage options and choose the best plan for them.”

A reverse mortgage is a loan that enables people 62 years and older to take a percentage of the equity out of their home without having to sell the home, move or take on a new mortgage payment. Some of the more common uses for reverse mortgage proceeds include supplementing one’s income, paying for expensive medications and paying off a mortgage.

As the reverse mortgage gains popularity (record numbers have been originated in recent years), the uses for the proceeds have become more creative, and proceeds are being used to meet “wants” rather than just “needs.” Seniors are using reverse mortgages to fund travel, gifts to children and grandchildren (think down payment on that first home) and charitable giving. Seniors are even using reverse mortgage proceeds to purchase another home.

Suppose you have a senior couple whose dream is to own a vacation property that all of their children and grandchildren could enjoy together. Their savings are not enough for a cash purchase, and they are hesitant to take out a “forward” mortgage for fear of the monthly payment. As their real estate professional, you can suggest a way to access tax-free* funds in the form of a reverse mortgage.

Or take a senior who lives alone. The children are concerned about mom or dad in that big old house that requires a lot of maintenance and is so far away. They convince mom or dad to move to a low-maintenance condo community. However, in reviewing available condos, the price seems prohibitive. The proceeds from the sale of the older home won’t be enough to buy the new unit.

A forward mortgage is not a consideration, because mom or dad is on a fixed income or perhaps has credit issues. This is another client who perhaps would benefit from a “reverse for purchase.” A reverse for purchase is probably one of the best-kept secrets. As of January 1, 2009, this FHA-insured product became a reality.

The calculations are simple, and age, purchase price and current interest rates all play a part in determining how much a senior can receive. REALTOR® Anita Davis, CRS, GRI, PMN, notes, “We want that first call to come to us. In this ever-changing market we need to be ready with the newest marketing and technology tools, and with the new reverse to purchase option, seniors can buy their new retirement home and still be mortgage free.”

Your clients need you to step into the role of advisor and to help them sift through the many complications and decisions throughout the process. By educating yourself on all options available to seniors, you will be assured that you are providing the best guidance possible, and you will truly position yourself as an expert.

*Always suggest the client check with a tax professional on tax-related issues.

Sue Haviland is a Certified Senior Advisor and founder of Reverse Mortgage Success. To request a group presentation, go to www.asksuehaviland.com. Her e-mail is sue@asksuehaviland.com.