Cheryl Scheidell - Change Your Retirement Through Reverse Mortgages

Have you ever thought that your home could become a powerful tool for creating financial flexibility in retirement? Cheryl Scheidell is a mortgage industry professional with more than 20 years of experience, including a decade specializing in reverse mortgages. A Phoenix native, Cheryl is passionate about educating homeowners and their families on how reverse mortgages can help eligible homeowners age 62 and older access their home equity, potentially supplement retirement income, and create more options for aging in place. She believes in the benefits so strongly that her own mother has a reverse mortgage! 

Cheryl will break down how reverse mortgages work, the different ways homeowners can access their equity, and what borrowers and their families should understand before considering one. Beyond her mortgage expertise, Cheryl co-founded Arizona Women of Impact, volunteers in her community, and hosts a radio show focused on educating people about resources for aging in place and transitioning to senior living. If you're planning for retirement, helping aging parents navigate their options, or simply looking for ways to make your real estate work harder for you, this conversation offers valuable insights into an often misunderstood financial tool.

In this episode, you will be able to:

• Understand how reverse mortgages work and how homeowners can access the equity in their homes.
• Discover how reverse mortgages can eliminate monthly mortgage payments and improve cash flow during retirement.
• Learn how homeowners can use their home equity to cover healthcare costs, home improvements, travel, and other retirement expenses.
• Explore how reverse mortgages can help retirees supplement Social Security, pensions, and retirement investments.
• Learn what happens to a reverse mortgage when the homeowner passes away, including options available to beneficiaries.

The key moments in this episode are:

0:00 Your House As A Piggy Bank

4:11 The Moment Reverse Mortgages Clicked

6:42 Reverse Mortgage Basics That Matter

9:29 Funding Retirement And Care With Equity

11:32 Loan Numbers, Heirs, And Non-Recourse

20:22 Reverse Mortgage Purchase And New Options

24:05 Cheryl’s Radio Show And Resources

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Full transcript here:

Cheryl Scheidell 

You're living in your piggy bank of a house. Let's crack open the piggy bank and take some of that money out. And granted, it's 14 plus trillion dollars in equity. We want to pass it down, but we need to use it. We need to use it because we are now in what's called the silver tsunami. There's more people over the age of 65 than under the age of 18. How crazy is that?

Mike Swenson

Welcome to the Real Freedom Show. We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together. I'm your host, Mike Swenson. If you want to get started on your real estate journey, check out our website freedom throughrealestate.com. It's where we put all of our great content, all of our episodes with the goal to be able to inspire you, connect you, help you out any way that we can inside of the real estate space. So we do that through these awesome episodes.

Mike Swenson

And so today we've got Cheryl Schidel here from Barrett Financial Group, and we're going to talk about primarily reverse mortgages as well as other things. But Cheryl, been in the mortgage industry for the last 20, 25 years, does loans nationwide, personally licensed in a handful of states, and you really are a reverse mortgage specialist. And so excited to talk to you about what that means and what you guys do. But welcome to the show, Cheryl. We're so excited to have you.

Cheryl Scheidell

Wonderful. Thanks for having me, Mike. I appreciate it.

Mike Swenson
Give us a little bit of a background, kind of your career path, I guess, leading up to where we're at today, and we'll take it from there.

Cheryl Scheidell

Well, I actually am a native Phoenician, so I'm from Arizona. But my background is actually hotel and restaurant management. So learned it at a young age, at 16, and got into the restaurant industry. My career was in that for space for like 16 years, 13 in management. But that's where I really learned my customer service skills. But I also learned um how to multitask and how to go from one thought to another and just trying to multitask of, you know, are these customers happy over here? What's going on in the kitchen? And just all that kind of stuff, as well as being in the hotel part of it, because that's my background, hotel and restaurant management for many of you. So anyway, and then uh had a brief stint in the uh travel industry with my uh ex-husband, um, a network company. So we actually did a network marketing company in the travel business. So I've been able to travel the world. But you know what, in that part of my path, I wouldn't change any of that because I was introduced to a lot of motivational speakers. So I learned a lot from motivational speakers, but then also I had exposure. So I was in my late 20s, and all of a sudden I was asked to be on stage. So my first hour presentation was on stage in front of 1,800 people and I had to train because they wanted to hear from the women. So I actually did a presentation on working with your spouse, the power of two and working with your spouse. So that helped me. And I see now because now I have a radio show and I have podcasts, it allows me to have that confidence to get out there and educate. Because back in 2002 is when I got into the re uh into the mortgage industry. And then about 11 years ago, I found myself uh learning about the niche product of reverse mortgages. So I've actually been doing reverse mortgages for 11 years. So that's my background.

Mike Swenson

And I love seeing how different passions and skills and and transferable skills kind of play into that. And so I always tell people, you know, what you've done in the past can help prepare you for what you're doing right now. And it's taking the, you know, what you've done, working with customers, being able to explain things well is really important and all that. And so certainly where you're at today in the mortgage space, it's it's really important. So get into the reverse mortgage space. So, kind of how did that develop for you? And we can go from there.

Cheryl Scheidell

So, just to hitchhike on all that, I actually spoke about reverse mortgages at an event called Wine Women and Wealth. I only had 15 minutes, but I had a lady come up to me afterwards and she's like, You need to talk to my mom. And I'm like, Okay, let's go talk to your mom. So um, I but first I should say before I even got into reverse mortgages, I had someone come up to me and she had three referrals for me. And she's like, Do you do reverse mortgages? I'm like, absolutely. And I walked into my manager's office and I'm like, hey, do we do reverse mortgages? Because I didn't even know what a reverse mortgage was, and I was in the industry. And so my first presentation was with an 80-year-old mom, a son, a daughter-in-law, and a daughter. And I talked to him about the reverse mortgage. I had my director of reverse mortgages on a speaker phone. The next day, the son called me and he's like, okay, just a couple of questions. And I'm like, okay. And so I answered that and he said, we want to get started with mom, and we want to do it as well. So they got educated and now they have a reverse mortgage as well as their mom. But what happened was I was speaking in front of a group. The daughter came up to me and said, Hey, uh, you need to talk to my mom. So get this. Her mom, at 73 years old, was a hairdresser at an assisted living community, working three days a week to um to make her mortgage payment. She wanted to retire. She didn't want to have to work, you know, doing hair. So basically, we talked to her, we got her program started. I did normally don't have to get tax returns, but with her, I did. And so the next thing I know, I'm talking to the CPA, and the CPA is like, I didn't know we had we could do this. So then the CPA did the loan. Then she's like, You need to talk to my sister. So I talked to her sister. She did the loan because people are getting educated. And when they find a good thing, they tell their friends and family. And then that she told her sister. When I got to Cora's house, she was laid out on her lazy boy. I gave her a hug, hello. I said, Do you know why I'm here? She says, You're here to sell me something. I go, No, I'm here to educate you. By the time we were done, she was giving me a hug goodbye. And since then, the daughter's like, I've never seen a transformation. Cora has since passed away. The daughter ended up moving in the house, and now she has a reverse mortgage.

Cheryl Scheidell

But basically, a reverse mortgage. Do you want me to tell you what a reverse mortgage is on a nutshell? So think about this. When you have a 30-year fixed loan, if somebody you can have a free and clear house, so I just got off the phone with somebody with a free and clear house. I'm running the numbers for him, but your house could be free and clear, or you could have a mortgage on it. But we're gonna run the numbers based off of the lowest or the youngest person in the household. We're gonna look at the value of the house, the youngest person and the interest rate, and we're gonna come up with the loan amount. So think about this. When you're making a payment on your 30-year fixed mortgage, every time you make that payment, your balance is going down ever so slightly, but it's going down. When we do the reverse mortgage, if you decide to do it, we're gonna pay off that existing 30-year fix. So that's gonna go away. You're not gonna have to make a monthly mortgage payment. It extinguishes that monthly mortgage payment. But now instead of that balance coming down every month, it's gonna go up in reverse. And so hence the name reverse mortgage. They're they're changing the name over to Heckham, Home Equity Conversion Mortgage. But now you don't have to make a mortgage payment. That's the biggest thing. Now we're giving people cash flow. And to that point, I was on the phone at my mom's house visiting one day back in 2019, and I got off the phone. She's like, I think I need to do this. So my mom actually has a reverse mortgage and it's already been eight years. She's like, This is the best kept secret. I'm like, I know. And so basically, that's a reverse in a nutshell, no monthly mortgage payment. You do have to pay your property taxes and your homeowner's insurance and an HOA if you have it. But the thing is, is that um we're not gonna lend you 80% loan to value. It's gonna be a lower loan to value because we got to keep equity in the house because you're not making a payment. So your balance is gonna go up every month because there's gonna be interest added to it. So your your loan to value, you can't be 80% and not have mortgage payment. You can't have it both ways. So it's gonna be a lower loan amount, but you don't have to make a mortgage payment. Does that make sense?

Mike Swenson

Yeah. So primarily, right? It's it's folks who you know have equity in the home, older.

Cheryl Scheidell

One person has to be 62 in the household, but you're gonna be younger. That first quase, 64 and 58. So we did the numbers off the 58-year-old, and it has to be your primary residence.

Mike Swenson

And so the goal here is like you said, with your example with the hairdresser, right? It gives them an opportunity to not have to make the mortgage payment to be able to kind of do what you want to do later in life and take some of that financial responsibility off your place.

Cheryl Scheidell

So, like, take the grandkids on memorable vacations. Don't give them money later on, which you can, but get a new roof, get the in-home health care. I have some people in Carpenteria, California. He's gonna need memory care. Let's leave the money under management with the financial advisor. Use the house money, the asset you're living in your piggy bank. Your house is your wealth-building tool, you're redistributing assets. Use the money in your house to pay for that memory care facility because that second spouse needs to have money too. 38% of the caretakers out there pass before the person that they're taking care of. So you we need to save that money for them and we need to, you know, let them be taking care of themselves, let the house, you're living in your piggy bank of a house, let's crack open the piggy bank and take some of that money out. And granted, it's $14 plus trillion dollars in equity. We want to pass it down, but we need to use it. We need to use it because we are now in what's called the silver tsunami. There's more people over the age of 65 than under the age of 18. How crazy is that? It's insane. And we're gonna be in a healthcare crisis here soon. I mean, there's I'm I'm I'm gonna get on my soapbox. Please get your powers of attorney, please get your trusts in place. When your parents say to you, what do you want for Christmas besides quality time? I would suggest spend the thousand or ten thousand dollars, whatever you have to do, get your POAs and your wills and trusts in place. Because would you rather spend the money now or be in probate for 12 months after someone passes? So just be proactive. That's what this is all about.

Mike Swenson

No, I love it. So, you know, you had talked about just of people that are looking for the financial relief. Walk through that process of how you run the numbers or kind of what that looks like. And then obviously kind of talking about what happens, you know, later on as they're continuing to as that balance continues to rise. So kind of talk forward from

there.

Cheryl Scheidell

So, like I said, when somebody calls me up, I can't just do numbers off the top of my head. In the past, before market volatility, I could say maybe 50%, be under a little 50% loan to value, but it really is we need to know the numbers. I can't just rattle numbers off my head. So the loan to value truly truly is gonna be between 37% and 43% loan to value. So someone who's 82 is gonna get more money out of the house than someone who's 62 because we base it off of actuary charts. So, you know, think about insurance. So it's gonna be based off actuary charts. So if we're we're giving you access to the equity in your home, we're gonna allow you to have, you know, more money when you're older. So it actually pays to be older this time, right? So it actually pays to be older. So what happens is we know, I'll put into the computer how much your house is worth, what your birth date is. It calculates the number for the loan amount with the interest rate um, you know, in play right now. And that's how we come up with the number. Now, when it comes time that somebody either moves out of the home, it's no longer their primary residence, they would have to sell it because it has to be your primary residence. If you're gonna go live with family or go into a community, you need it needs to be your primary residence. But let's say somebody passes away and they pass away. Um, now the beneficiaries have two options. They can either refinance the house into their own name or they have up to 12 months to grieve, to purge, and get the house ready for sale. Now, within those 12 months, they're not required to make a mortgage payment. But think about this. Every month that goes by, that's eating into your inheritance, basically, right? Because, you know, the balance is still going up. So it behooves you to get it done sooner than later. So you have up to 12 months. Now, if we're in a market, depends on where you are in the in the country, right? But if the value of the house is higher than the loan balance, you pay off the bank just like you would a 30-year fix. You pay off the loan with the accrued interest, you pay the realtor fees and closing costs, and then whatever's left over, the beneficiaries get. If, God forbid, we had another 2008 and the house is upside down, so the loan balance is higher than the home value, it's a non-recourse loan. So that means that we will not come after you for the difference to owe the bank the difference, whether it's a dollar, $500,000, whatever the case may be. That's why there's mortgage insurance in place. That's why we're an expensive loan, and it's 2% of the value of the house. Now, every family has to put into that mortgage insurance bucket, whether they like it or not, whether they use it or not. And that's just part of the guidelines because we have to have that in place because there is gonna be a family that's gonna need that out there, and so everyone has to do it. It used to be two and a half percent, so it's actually come down. So there you go. But um, but the bank is gonna give you 12 months, they're gonna check on you, and they're gonna require you to be checking in at least every three months, but they might check in with you every month because they wanna make sure something's happening. They want to make sure there's no squatters, they want to make sure there's no vandalism, they want to know that something's happening to the house. As an example, I have a a client, she did she passed away in April. Her son was living with her, the daughter does not. The daughter wants to sell the house, the son wants to stay in the house. The son doesn't qualify to refinance the house to put it in his own name, but he's still living there. And she passed in April. It's not fair to the sister that she's not getting part of her inheritance and he's living for free. But they got to do something. I'm trying to help them. I also have my real estate license, so I'm trying to help them with getting his head wrapped around that he has to go find another place because that doesn't qualify to refinance. So that was a lot of information, but I hope it was answering your question on how everything works after the fact, too.

Mike Swenson

I was gonna say, in addition to your real estate license, you know, it might need a therapy license as well to be able to.

Cheryl Scheidell

Trust me, so I use my psychology degree that I don't possess.

Mike Swenson

Yep. My my wife's a therapist, so I get it too. So it's it's helpful in terms of kind of talking through the relational situations. And I think as just a realtor as well, you have to have some some good people skills to handle with problem solving and providing good solutions. So you mentioned about 2%. So that's something that's paid initially when they take out the reverse mortgage.

Cheryl Scheidell

Yeah, it's a one-time line item on the closing cost, and it's wrapped into everything. So when you wrap in your closing cost on a 30-year fix, when people do that, you can wrap it into this. So normally I don't talk about this. So you got some secret sauce there or in for extra information. Normally I don't talk about that, but yeah.

Mike Swenson

So as their mortgage balance, so you approve them up to that percentage. If they keep living a long time and they keep living longer, kind of what happens once they get up to that?

Cheryl Scheidell

This loan is good till you're 150 years old. So even nobody's outlived that one yet.

Mike Swenson

So you're you guys are good.

Cheryl Scheidell

Yeah, but if you continue to live in your home, because I've got people in their 90s, and I the lot the um oldest person I did was 94. And if you continue to live, and he's still alive, and if you continue to live in your home and the the home goes upside down, you're still safe. You don't have to do anything. So you don't have to move out, you don't have to do anything. And also to that point, when you have a husband and wife, and one passes, pre-deceases, the other person does not have to do anything. They are safe in the home, they don't have to do anything. So when when people hear that, they're happy to hear that. And when I talk to the adult kids and they're like, this sounds too good to be true. What's the catch? No mortgage payment, la la la la, whatever, whatever. Well, the catch is that maybe your inheritance is an A or X, it's Y, because mom and dad have been enjoying the fruits of their labor, taking the equity out of their home to do what they want to do. I have some clients that are closing this week, and they've been talking about vacation, talking about vacation. So I was talking to him, and I'm like, so what do you think? And he goes, Well, probably just go see my brother in Austin. I'm like, I think you need to take your wife to Hawaii. She's been talking about Hawaii, and he just started laughing. So you just never know. But the other thing is, we helped somebody. Here's a story, just a quick one. $100,000 in credit card debt. She was pawning her jewelry to make the credit card payment. We got her $100,000 paid off. So there's so many different examples. People, when they retire, they have Social Security and pension if they have it, 401ks and IRAs if they have it, and then they have their house. Let's leave the money under management. Use the house to supplement your fixed income if you have one. So just different thoughts, different ways of thinking things about things.

Mike Swenson

Yeah. I I love it because it's it's uh something that doesn't get talked about enough. Now I'm sure you know you you guys live in in Phoenix. Probably gets talked about a lot more than it does here in Minnesota. However, um, it does take a while to get your brain wrapped around it and open up your mind to think, oh, this can be a good thing, and and kind of how would that work? And so it's it's definitely something new that a lot of people don't know. Are you looking to get started or scale in real estate investing but don't know your next step? Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it? Go ahead and push the easy button and invest with us. Real estate investing is what we do full time. We've done dozens of deals with hundreds of doors. We have the knowledge and experience to handpick the best deals that most investors can't find. We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own. The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own. Don't let this year go by where you don't make the leap, add to your portfolio, or you just sit in analysis by paralysis. To find out more, visit freedomthroughrealestate.com and click on invest. You can book a call and learn more there. So get to scaling your portfolio now with us by your side. That's freedomthrurealestate.com and click on invest

Cheryl Scheidell

Yeah, it's the best kept secret. You know, when I got started these back in 2015, I thought to myself, I'm gonna get in front of this wave because this is like, this is like gonna be huge someday. And I want to know about it because that's the important thing. You wanna use someone who knows what they're doing. I have loan officers that come to me and say, Cheryl, you can do all my reverse mortgages because everyone hated each other when we were done because they didn't know what they were doing. So you it's a different animal. There's a lot of different moving parts. I've been working with someone in Texas right now. There's a lot of things going on with her property, including um eminent domain, meaning like the the state might take some property to do some other things with. So we got a lot of things going on like right now. So you want to use someone that knows what they're doing because that's really important. Because, you know, like I said, I got into this back in 2015, got in front of the wave, and now they're calling it the silver tsunami. And, you know, it's just, you know, you it's it's gonna be huge here pretty soon because people are getting educated. I just did a lunch and learn yesterday. I had 20 people in the room from realtors, because you can actually purchase a home with a reverse mortgage. I had a lady who was looking to purchase a home, 30-year fix. She was referred to me from her financial advisor. And um, I was giving her the numbers for the 30 year fix, the five one arm at the time. And then I said, Let me talk to you about the reverse purchase. She's like, I don't want that. And I said, Oh, that's fine, but let me educate you because I don't want you to say next year, why didn't you tell me about that? So basically, you're gonna Take the net proceeds from the sale of your house or wherever you have the money coming from and fund the equity into the purchase and then not have a mortgage payment. So the next day she calls me up and she's like, I want to do that. And I said, What changed? She said, Well, with the reverse purchase, I don't have to make a mortgage payment. I said, Correct. She said, Okay, the money I would have used, that $2,000 that I would have had to make a 30-year fixed payment with, I'm going to give to my financial advisor to invest for me. And so she's using her house as a wealth-building tool. I had people $30 at the end of the month living check to check. I've qualified people on $800 for income. But then I have people right now in a $5.5 million house doing a reverse mortgage. And they're at the age of $6, because with the government program, one person has to be 62. But then we have proprietary products that go down to the age of 55 and up to $4 million. So they're in a $5.5 million house and we're going to pay off their existing loan. They're making a $5,000 monthly payment. They don't want to. And now they'll have a line of credit because you can have a line of credit, a lump sum, whatever. And we're in the process of getting their house out. And they're in a million, you know, $5.5 million house. It doesn't matter what you who you are, this is not a last resort.

Mike Swenson

And you living in Arizona, you can still help clients all over the United States.

Cheryl Scheidell

Yes. Barrett Financial is in all states except for New York. And then I'm personally licensed in Oregon, California, Nevada, Arizona, Texas, but I can work in all those states because either I'll just be licensed there, depending on the state, or I'll team up with somebody. Either way.

Mike Swenson

That's fantastic. It's it like I said, it's I love it. It's it's new to me. So ever since I'd heard about you working with reverse mortgages and learning about it, like I said, it just opens up your mind to so many things that you traditionally didn't think about and can be an amazing benefit for people. In addition to that, you know, anything else that you kind of want to share and talk about what your day looks like, what else you can do to help people?

Cheryl Scheidell

Absolutely. Well, I've had a radio show to talk about reverse mortgages for over the last year. So it's um on 960thepatriot.com. It's on Sundays at 3 30. Um, it's called Is a Reverse Mortgage Right For You? You can actually go online and go to the lineup and the podcast, and you can see my past episodes. So for the most part, every other week I'll talk about reverse mortgages and basics and buying a home. It's actually a second lien position. You can keep your 30-year fix, low interest rate intact and do a reverse mortgage in second position and not have a mortgage payment. So there's that also. But we talk about that, and then every other week I bring on different referral partners from financial advisors, elder law attorneys. Um, I actually have had roofers and painters, but this week I had the Scottsdale Fire Department coming in talking about fall prevention and just aging in place and how we can be good around our house to reduce those fire department calls because they get a lot of calls for just for falls. And so um, so I'm I'm talking to them. And then I have a fitness person about moving as we're getting older. But you can go to my radio show and listen to it on Spotify, and I also have a podcast called Reverse Mortgage and Beyond. So I'm pretty excited about those. Um, I need some subscribers though, because I'm just getting started on YouTube. So wonderful website 960thepatriot.com, and then you just go to the lineup and then podcast look for my name, Cheryl Scheidel. Sundays at 3 30 if you want to listen live.

Mike Swenson

And what time zone is that?

Cheryl Scheidell

Arizona. So right now we're Pacific, and then pretty soon we're gonna change to mountain. So awesome.

Mike Swenson

Well, Cheryl, thank you so much for coming on and sharing your wealth of wisdom, and uh excited to see uh where you continue to go because yeah, it's a great, great market. The market's hot for you because people keep getting older, and there's a lot of them, all those baby boomer boomers, and so you're you're in a good spot to be.

Cheryl Scheidell

Yes, Mike, thank you so much for having me. I appreciate it.