Your Home as a Retirement Fund
Reverse mortgages are finally catching on. But are they for you?
Reverse mortgages have distant been regarded with a skeptical eye. Critics say they’re costly, complicated products, financial-planning tools of last resort. Lately, congressional hearings have raised concerns about predatory lending. And the reverse-mortgage market is attracting poor apples from the subprime market in pursuit of high commissions from sales of inappropriate investments bundled with reverse loans.
Since federally backed home equity conversion mortgages were introduced in 1989, only 1% of eligible seniors have gotten on board. (HECMs explanation for the huge majority of the market.) But despite negative publicity, reverse mortgages seem to be catching on with seniors who are house-rich but nervous about their cash flow.
Two-thirds of the nearly 350,000 reverse mortgages made to duration were taken out within the past three years, and one-third were issued in 2007 alone. Structured properly, a reverse mortgage can be a life-saver for a cash-strapped senior.
Post from: Reverse Mortgage Loan Blog
Your Home as a Retirement Fund
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