aging in place
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  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.