Reverse Mortgage Loan Blog

Would a reverse mortgage make sense for you someday?

Anyone who’s at least 62, has significant equity in a home, and has a mortgage that’s paid up (or nearly so) probably knows by now that they’re eligible for a reverse mortgage. The loans are widely promoted in mail solicitations and TV ads featuring such celebrities as James Garner, Robert Wagner, and Pat Boone. The promos tout the potential advantages of reverse mortgages to older homeowners and invite them to call for more information.

Once they do, they’ll learn that reverse mortgages are complex and expensive. For some eligible homeowners, the loans are a costly means of tapping cash that could be accessed more prudently some other way. For others-especially financially distressed homeowners in their 60s-a reverse mortgage will ease their money troubles in the short run but could leave them in even worse shape when the cash runs out. And perhaps worst of all, critics charge, some reverse-mortgage providers are using hard-sell or deceptive techniques to pressure seniors into taking out loans they don’t need.

But for people in their 70s whose other assets are dwindling or who face long-term care or medical costs beyond their means, a reverse mortgage could be a solution. “Reverse mortgages provide a promising way to convert home-equity savings into cash,” says John Rother, AARP’s director of policy and strategy. But “high costs and abusive marketing practices” by some lenders must be addressed, he adds.

Reverse mortgages are quite complicated, with different types offering an array of rates and terms. This guide should leave you a bit less overwhelmed by the decision, though no less bombarded by the ads.

Found here.

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