“I wish I had known about this before I had taken out the home equity line of credit.”

When developing a new television spot, Reverse Mortgage Funding decided to take page out of the Cola Wars handbook, inviting real consumers to take “the HELOC Challenge.”

(A HELOC promotion is included at end of this study for your comparison. Watch for what it doesn’t say about the cost of the HELOC).

Decades after Pepsi famously dared soda drinkers to see whether they preferred its flagship product over Coca-Cola in a series of iconic commercials, RMF undertook a similar experiment with Home Equity Conversion Mortgage-eligible borrowers. But instead of two cups of cola, the borrowers received information about a traditional home equity line of credit (“Product A”) and a HECM line of credit (“Product B”).

All the participants know upfront are the facts presented, and that they’re being asked to compare two types of home equity loans. And just like the participants in a recent RMF-supported study conducted by the National Council on Aging, they ended up liking the reverse mortgage far better than the HELOC.

In the two-minute commercial, an announcer explains that participants were told some of the basic differences between the two products, including the “flexible payment options” available for HECM lines of credit — echoing another recent RMF ad — and the government insurance feature.

“Product B almost sounds too good to be true,” one participant says in a voice-over.

“That was a no-brainer,” says another.

The commercial then transitions into the big reveal, showing the stunned faces of participants who overwhelmingly selected the reverse mortgage product over the traditional HELOC.

“I wish I had known about this before I had taken out the home equity line of credit,” says one participant.

“I haven’t heard yet any reason why I shouldn’t pick this product,” says another.

The ad also shows the homeowners admitting that they had negative or incomplete impressions of the reverse mortgage prior to attending the focus group, but that the side-by-side comparison — minus the name — helped them become better informed.

“I don’t think I ever, for some reason, fully understood that a reverse mortgage was, in fact, line of credit,” says one man, shortly before a graphic reveals that 85 of 88 focus group participants selected the HECM line of credit over the HELOC.

The results certainly weren’t surprising to RMF, according to chief marketing officer Jean Noble. The Bloomfield, N.J.-based lender had been conducting similar focus groups around the country since 2016, and after hearing an enthusiastic response from participants, Noble and RMF decided to bring the groups into viewers’ living rooms.

“You’re sitting behind the glass, and they’re like: ‘This product sounds phenomenal!” Noble said. “What better way to debunk the myth of the product by having real people take this HELOC challenge and airing it on TV?”

The filmed spot came from a series of focus groups in Rochester, N.Y., and the participants knew that they could potentially end up in marketing materials or corporate training videos. But they weren’t paid for their time, Noble said, and the reactions were completely genuine.

RMF first began airing the commercials Monday as part of a “soft launch” on cable networks such as CNBC, CNN, and the Smithsonian Channel. And while it’s still too early to determine firm results, Noble said consumers have responded positively on RMF’s website and social media pages.

“This is a great awareness campaign with something completely different than we’ve ever executed before,” Noble said.wq

Consider now, talk to a 12 year HECM veteran loan officer. Access through “Information” tab on home page here. Thanks for taking the HELOC challenge.

The following is taken from HELOC promotional materials and misses the cost of it. You’ll notice above that not only does one not have cost (in one’s lifetime because it is a HECM product) but the LOC actually earns significant growth if left to amortize.

“HELOC brochure…

Homeowners who have equity built up in their homes can tap into that equity using a home equity line of credit, or HELOC. This financial tool can be a great way to accomplish a number of financial goals.

Here are four excellent uses of a HELOC for homeowners to consider.

Consolidating Costly Debts

Credit card debt and other types of consumer loans are costly, unless a debtor is lucky enough to have a no-interest card. Borrowers can consolidate that debt into a HELOC, which is much more affordable because it is a secured debt.

This advantage only works if the borrower stops adding to the debt problem. A HELOC becomes a valuable tool to get rid of debt quickly when used properly.

Create An Emergency Fund

Most people do not intend to end up in credit trouble, but emergencies happen. Emergency home repairs, job loss, or car repairs can quickly add up to unwanted debt.

A HELOC provides homeowners the option to have an emergency fund. Should one of these emergencies pop up, the homeowner can use the HELOC for an affordable source of funds.

Home Repairs That Add Value

Some home repairs add value to the property, but are also expensive. A HELOC can provide a source to fund these repairs. Because they put value back into the property, homeowners may be making wise use of their equity when using the HELOC in this way.

To make this work well, homeowners should choose repairs that do add to the home’s value. Since the cost of the repairs comes from the equity, the home’s owner should recoup the costs later when selling the home.

Funds For Investing

Finally, homeowners can use funds from a HELOC to get started in investment. This is risky, because the loan is paid regardless of how successful the investment is, but it can give a homeowner the chance to start investing for the first time.

Similarly, retirees can sometimes use HELOC funds to supplement retirement income if investments are struggling. This is a temporary solution to give investments a chance to recover, but for those living on a fixed income it is very helpful to have this option.

The HELOC is a valuable tool for homeowners that allows them to tap equity when it is needed. Since they have spent years building up this equity, homeowners should not fear using it when it can help with their financial goals.