Access Reverse Mortgage Radio
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Jamie Meloni: Time to bring on my first guest for the show. Malcolm Tennant is the co-founder of Access Reverse Mortgage and a Access Reverse Mortgage Radio is a regular contributor to That Business Show. Access Reverse Mortgage is a family-owned company based in the Tampa Bay area for the past 10 years and they are A-plus rated by the Better Business Bureau and Florida’s leading reverse mortgage provider. Mac, welcome to the show today.
Malcolm Tennant: Thanks, Jamie. Thanks for having me.
Jamie: And thank you for being a regular, great supporter of the show. Me and Mac go way back to the Jamie Meloni Real Estate Show days. Thank you very much for the support that you’ve given me and the show and definitely give you props to what you do in the community both within your business and also within the Alzheimer’s Foundation. Real quick let’s put out the promotion that’s coming up on October 24th, the Walk to End Alzheimer’s. Let’s talk a little bit about this.
Malcolm: Alzheimer’s is something very close to my heart. We have a family history. My mother and my father-in-law actually both suffered from it. The Walk to End Alzheimer’s is at Bright House Field in Clearwater on October 24th. It’s the major fundraiser for the year for Alzheimer’s and anybody that would like to donate to that is welcome to go on the Alzheimer’s website, look up Pinellas County, search for our company team called Access Reverse Mortgage, and anybody who wants to walk with us is welcome, and it’s going to be a lot of fun. It’s a 5K walk, three miles, very easy to do. It’s in the morning. Anybody who wants to donate, we’re going to match their contributions. Our company, Access Reverse Mortgage, will do that. So it’s a good way to increase your donation power. We hope a lot of people will sign up and join us.
Jamie: Very cool. Definitely, get involved in the community. Something that I promote a lot in this show is not only being a business leader but also being a community leader and Malcolm Tennant over here Access Reverse Mortgage does that very well through the Alzheimer’s organization. So please take a moment and help support the walk coming up on October 24th. Malcolm, talk a little bit about the history of your company, Access Reverse Mortgage. In the meantime, people can pick up more information about this accessreverse.com. Ten plus years in business, tell me a little about the founding and the history of the business.
Malcolm: Sure, three of us founded the company back in 2005. My partners are no longer partners actually, my wife owns the company, Pam. She’s here in the studio with us but…
Jamie: She’s afraid to get in the mic.
Malcolm: She’s afraid to talk. We’ll ask her a question later. We’re a family business but, as you mentioned earlier, we’re top company based in Florida. We do a lot of business. We’re very experienced but when you call in, we answer the phone live. You’re going to reach myself, my wife, or one of my sons. Two of my sons work there with us. We have some other people as well and loan officers around the state, but we’re based right here in St. Petersburg.
Jamie: You’re over on Tyrone, right?
Malcolm: Right across from the mall. Exactly.
Jamie: A key point to what you do, you’re solely a reverse mortgage provider. A lot of the lending institutions will wrap that into their other lending products and that’s really not recommended. Talk to us a little about this.
Malcolm: Yeah, it really is a curse on our industry that a lot of the problems you hear about with reverse mortgages come from the fact that many, many what I would call forward mortgage or traditional mortgage companies say they do reverse mortgages, but the average company last year in Florida that did at least one reverse mortgage, the average was only I think two and a half loans per quarter so less than 10 loans for the year. Somebody doing it that part time just cannot have the full array of products, cannot have the best deals for you and just will not know how to process the loans properly. We truly are experts. That is all we do.
Jamie: So, for the audience, explain to them what a reverse mortgage is because there are a lot of misconceptions out there about the reverse mortgage so let’s talk about what one is.
Malcolm: Definitely. I think for people listening maybe wonder about the relevance to them. The reverse mortgage was traditionally, and especially 10 years ago, regarded very much as a rescue device. “Granny” gets in trouble with the credit cards is how it was looked at. Today, that’s just not the case at all. The demographic today are middle and upper-income borrowers. The reverse mortgage today is a retirement planning tool. We interact very much mostly with financial planners and realtors where everybody, the financial planning industry, has really gotten behind the reverse mortgage recognizing that, as a generation, baby boomers don’t have enough money to retire on. Just the facts statistically and most of what we do have in net worth is tied up in real estate. A reverse mortgage is a way to access the equity in your home without selling. It’s very much changed. We’re seeing that it is becoming a really mainstream product.
Jamie: And this is a government insured loan so lenders are protected. Set aside the myth that the government can come take your home. It can happen if you don’t pay the taxes and insurance but set aside that myth because I know a lot of people that are uneducated on this lending product. That’s what they think.
Malcolm: Yeah, you do hear that a lot. A lot of people think somehow you’re giving up ownership to your home, but it’s just not true. It’s no more true with a reverse mortgage than it is with a traditional mortgage. You get a reverse mortgage, and you decide to sell in five years, or whenever. You sell the house like you would with any other mortgage, pay off the balance, the remaining money still belongs to you or you live out your days there. Your heirs are going to have a window of time to sell the house. They can keep it if they want and are able to pay off the balance due.
Jamie: Right. So the situations that are in the news from time to time that result in people losing their home has to do with they didn’t pay the taxes and the insurance typically. That’s usually the story, right?
Malcolm: Yeah, there have been some very misleading articles. When you read deeply into them, there’s another one on the weekend in the in the Tampa Bay Times that just is not relevant to how the industry works. This is a person who got a reverse mortgage years ago and now hasn’t got money to fix a house. It doesn’t matter if they had a reverse mortgage or not. If they ran out of money, they ran out of money. The reverse mortgage probably helps them stay in the house longer, but that’s not our client anymore. The people in financial difficulty generally don’t qualify for these today under the new rules. It’s much more the professional who’s looking at retirement.
Jamie: Now there have been some industry changes that swept through the reverse mortgage business over the last year, correct? Can you share some of these out with us that people need to be aware of if they’re considering this product?
Malcolm: Yes, it used to be that you basically didn’t have to qualify for a reverse mortgage. Today, there is some qualification. It’s easier to qualify for a reverse mortgage than for a traditional mortgage, but you still do have to have some credit worthiness and some level of income. It’s not that you’ll be declined or not qualified for the reverse mortgage, but you’ll get less money if your credit’s not pretty clean so.
Jamie: I know you take a very proactive approach to squashing these myths. You’re on my program a number of times, and you make your rounds on a lot of different programs on the radio squashing these myths, but it is a very good product for people that are ages 62 years or older to consider as a financial planning tool for their retirement.
Mac: Absolutely and 62…one spouse has to be 62. The other spouse can be…
Jamie: That was one of the changes, right, that came a part of the changes this past year? You said somebody can be as young as 18 right?
Malcolm: Eighteen is the minimum age.
Jamie: I told you if you ever got somebody in that situation where you had 18 married to a 60-year-old; I wanted to have them in studio to talk about that. I thought that would be an interesting talking point.
Malcolm: We’ve got one in process right now where the wife was born in 1975 so I don’t know if that makes her, but it’s fewer than 62. I’m sure of that.
Jamie: I’m going to take a quick break but currently in studio with Malcolm Tennant the co-founder of Access Reverse Mortgage and you can learn more about him accessreverse.com. Coming back from the break we’re going to talk about how you can use of reverse mortgages for purchase. How to use them to step up in your purchasing power to buy a new home. You’re currently listening to That Business Show with Jamie Meloni where business becomes show business.
Jamie: Have you considered a reverse mortgage as part of your retirement financial plan? For homeowners age 62 or older, a reverse mortgage from Access Reverse Mortgage is a safe, economical way to turn your home’s equity into cash or monthly income. Access Reverse Mortgage is a family-owned company based right here in the Tampa Bay area for the past 10 years. They are A-plus rated by the Better Business Bureau and Florida’s leading reverse mortgage provider. Call 727-347-0305 or go to accessreverse.com to start your research today. NMLS number 4566, that’s 727-347-0305.
Currently in studio with our regular contributor to at That Business Show, Malcolm Tennant, co-founder of Access Reverse Mortgage. Learn more about him accessreverse.com and pick up a phone give him a call 727-347-0305. Again, that’s 727-347-0305. That information will be up on the show recap over at TampabayRadio.com if you didn’t catch that information. But the website, real easy to remember accessreverse.com. Malcolm you’re also a contributor to a Boston College book. Talk to the audience about this offer.
Malcolm: Well, I didn’t contribute to it actually but the…
Jamie: Okay. You contributed to something. I was thinking of something different there, but talk about the Boston College book. I know what I’m thinking there, yes.
Malcolm: Boston College did an excellent study on using your home’s equity in retirement not just on reverse mortgage but it covers reverse mortgages and is really well written and independent source. We bought up a quantity of those books and we offer those to anybody who’s interested in researching how reverse mortgages work, which we really encourage. We’d be happy to mail out a copy of that booklet to them at no charge.
Jamie: Okay, how do they get that?
Malcolm: Again, they can call the office at the number you just gave the 727-347-0305. It really is a good study and it’s a good place to start in your research because it’s not just on reverse, it’s on different strategies.
Jamie: Okay, so you offer that free of charge to consumers just for putting a call into your office there, correct?
Malcolm: Call the office. We’re not going to put them on a mailing list or anything, but we have either the hard copies or we have a link we can email out as well so whichever people prefer. Yes, just call the office.
Jamie: Now reverse mortgages can be used for purchase something that a lot of people are not familiar with. Explain this to the audience.
Malcolm: Sure, okay. You’re right. A lot of people don’t know about it, this product. Reverse mortgages came out in 1988 but the reverse mortgage for purchase came out just in 2009. We did the first one ever done in the country. Our partner at the time bought a house, a 5000 square foot house and borrowed using a reverse mortgage for purchase. The way it works is just like using a regular mortgage. With a traditional mortgage you might put 20% down, you go to your closing and the mortgage company brings the other 80% percent. With a reverse mortgage, you can’t borrow as much so you’re probably going to have to put down 40% to 50%, is more typical of the down payment required.
The reverse mortgage would bring the rest of the money to the closing just like with a regular mortgage. The difference is now you’ve got a reverse mortgage so you’ve got a house you can live in the rest of your life if you choose and never make a mortgage payment because the interest that’s charged each month with a reverse mortgage is added to the balance instead of being paid. You can pay it if you want, but most people just let it accumulate. Keep in mind, you must continue to pay your taxes and insurance, as well as any association fees or ground rents, and also maintain the home or you could be subject to foreclosure.
Hopefully, the house is going up in value a little bit each year, too. So the way it’s designed the idea is that your equity should always be there when you go to sell the house that the increase in value would offset the accumulating interest. But if you want a house in retirement with no monthly mortgage payment, let’s say you’ve got $100,000 you can buy a $100,000 house, or you could potentially buy a $200,000 house using a reverse mortgage to pay the balance. You’ve got a place to live the rest your life with no mortgage payment.
Jamie: Do a lot of people take advantage of this? Do you find yourself explaining this to consumers every day in your office? Because it’s hard to wrap your mind around it a little bit, but is it something that a lot of people do take advantage of?
Mac: We definitely spend a lot of time explaining it to people, but the problem is people over think this. Reverse mortgage is just like any other mortgage. You’re using your house as collateral to borrow money. You’re going to be charged interest each month. The big difference is you don’t have to pay it. The second big difference is that the reverse mortgage is the only kind of residential mortgage you can get that’s non-recourse. When the day comes to sell the house, should you owe more than the property is worth, FHA steps in and pays the shortfall. Other than that, it’s just like a regular mortgage. We do a lot of seminars for realtors at Pinellas Realtor Organization, the Greater Tampa Area Realtors, GTAR.
Jamie: Yeah, Greater Tampa Association of Realtors, GTAR. That’s Tampa’s board, yes.
Malcolm: We’re trying to educate the Realtor population on how these work because, for the cash buyer, this creates a tremendous opportunity to double their purchasing power.
Jamie: Right. Now with values going, can these reverse mortgages…how does refinancing work with regard to reverse mortgages?
Malcolm: Sure. We’re doing a refi that’s going to close, I think, this week or next. That person just got the mortgage a year ago, but their property value has shot up pretty dramatically, about 20%, which opened it up for additional funds to be available for the person. Refis can be done for very low or zero closing costs in some cases. They’re quite attractive to people especially anybody who got a reverse mortgage back in 2009-2010; values have gone up so much that we’re seeing that’s a real good option for people right now.
Jamie: So people definitely need to take advantage of, again, your offer that you are laid out there on the beginning of the segment there for the book from a Boston College. Again, put that out there for the listeners on how they can obtain this information?
Malcolm: Sure. Just give us a call at our office in St. Pete at 727-347-0305, and we’re happy to answer any questions over the phone. We’re also happy to mail out the booklet from Boston College or send a link as people prefer.
Jamie: Now, tell the audience about the advantage of using Access Reverse. You see on TV a lot of these celebrity endorsements touting the reverse mortgages but talk to us about the advantages of using you, a locally owned company.
Malcolm: Sure. So first, we’re experienced enough that we’ve done over 1200 of these so we know how to do them definitely. But we’re local. We’re a St. Pete-based company. So when you call into our offices, you’re going to get, Pam, my wife or myself or one of my sons or just we answer the phones live. You don’t go to an auto attendant. You’re not dealing with a telemarketer; you’re not dealing with a commission sales person. So it’s a big difference in the environment.
We have a lot of good competition, the big national companies that advertise on TV all the time. They’re spending a fortune on those TV ads. We don’t have that cost so we truly do have a cost advantage. It really doesn’t matter where you get your reverse mortgage. They’re all going to end up the same place. They’re all insured by FHA and then sold through Ginnie Mae, another government entity, to pension funds and insurance companies. Big investors buy them so it doesn’t matter where you get it. Everybody’s really a broker in this business. Nobody uses their own money.