A reverse mortgage isn’t a ‘last resort’

We were surprised to see the statement from Consumer Reports on Feb. 17 that a federally insured ”Home Equity Conversion Mortgage” or ”HECM” reverse mortgage should be a ”last resort.” Readers need to understand that reverse mortgages are just mortgage loans with no monthly payments required until you sell or move out. As such, they have many uses, and are seldom the ”last resort.”

For example, last July Congress amended the law to permit HECM loans to fund the purchase of a home, hardly a last resort. And the National Council on Aging in 2005 initiated a ”Use Your Home to Stay at Home” program which suggests use of reverse mortgage proceeds as a means to pay for home modifications and related expenses that extend the time seniors can stay in their homes.

There are those for whom a reverse mortgage may be a life-saving last resort, but for many others it is a new financial tool that is frequently the smart choice.

John L. Krajsa

Found here.

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One Response to “A reverse mortgage isn’t a ‘last resort’”

  1. James E. Veale, CPA, MBT Says:
    March 13th, 2009 at 6:51 pm

    Mr. Krajsa,

    I beg to differ with you. A reverse mortgage is ALSO a loan of last resort; it’s not, however, just a loan of resort.

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