July 2014

More On Reverse Loans

In the remainder of the article that I shared in the previous post, it briefly discusses a negative article that ran in the U.S. News & World Report recently.

Unfortunately, these articles are well meaning but rife with inaccuracies.    Recent studies are supporting the beneficial use of the federal loan program as an alternative to and extend the  leverage investments and savings.

Here is the remainder of the article:

Column: Reverse Mortgage a Good Option if Borrower Isn’t ‘Dead Broke’

Posted By Emily Study On July 22, 2014 @ 2:23 pm In News,Reverse Mortgage

But the loan hasn’t always been favored by critics.

“Historically, reverse mortgages have had two major drawbacks,” says Burns, who has covered personal finance and investments for more than 30 years. “First, they were relatively expensive in closing costs, insurance cost and interest rate. Second, most of the people who took them out shouldn’t have.”

U.S. News & World Report recently advised [3] against the use of reverse mortgages, saying, “It’s a colossally bad idea for a number of reasons.”

Problems with reverse mortgages often came about as a result of the type of person borrowing them, Burns says. These people had no other assets, were in debt and needed to rethink their shelter needs rather than borrow.

“The result was that borrowers would take out the maximum amount and then fail to make tax and insurance payments,” Burns writes.

However, as program changes take effect, Burns says reverse mortgages are a viable option for some seniors.

“If you are retired, healthy and not dead broke, new research indicates that a reverse mortgage can be what they were hoped to be — another tool for managing retirement income and spending,” he writes.

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Reverse Loans Are Better than Ever

The public and estate planning professionals, along with CPA’s and other who specialize in retirement planning are coming to a very common agreement about how beneficial Reverse loans can be when planning for retirement.

Or they can be used to extend existing retirement plans longer than they would otherwise last.   The number one concern for those who are older, is not their health but running out of money and funds from a Reverse mortgage can potentially eliminate this concern

Here is a copy of a recent article that declares that Reverse mortgages are an option that should always be considered as another avenue to financial stability.

The article does discuss the typical misunderstandings of the loan that has created confusion, as to whether or not they are a good option to consider when managing money and aging in place.

These negative articles are frequently incorrect or partially correct and  continue to perpetuate the myth that the loan is too expensive and the property goes to the bank at the end of it.

Both of course, are untrue.

Here is the first part of the article with the rest to follow in an additional post.

Column: Reverse Mortgage a Good Option if Borrower Isn’t ‘Dead Broke’

Posted By Emily Study On July 22, 2014 @ 2:23 pm In News,Reverse Mortgage | No Comments

“For healthy and financially stable adults, reverse mortgages can be an effective retirement planning tool, writes [1] syndicated columnist Scott Burns.

Reverse mortgages have undergone a variety of program changes, reducing costs and limiting the amount of the loan a borrower could take out in the first year. Because of some of these changes, financial services companies are seeing the value [2] in using reverse mortgages as a financial planning tool. “

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