Reverse Mortgage Good or Bad?
I’m asked that all the time and I believe the answer is different for every circumstance.
As in many things, it’s not the tool – it’s the user. Here are some things to consider as you mull over the suitability of a reverse mortgage for yourself, a client or loved one.
Do you understand the way the reverse mortgage works? (The concept of negative amortization)
Do you have a plan on how you will use the reverse?
Can you articulate the benefit to you of your choice of reverse mortgage product, Fixed vs. Adjustable or Standard vs. Saver? Open-ended vs. Closed-end.
Time goes by in the blink of an eye, how will your reverse mortgage be working for you in 10, 20 or 30 years?
What are your plans for your home, do you want to live there till you die? What if you get sick?
If your heirs want to keep the home in the family after you pass – do they have a strategy for paying off the reverse mortgage?
For some interesting and useful strategies for using a reverse mortgage to accomplish your retirement goals please check out the following posts.
Reverse Mortgages Good or Bad? Neither. It's up to you..... but using a reverse mortgage is...
- BAD = When they are pushed by unscrupulous lenders or greedy children as a way to make/acquire money at the expense of a seniors future lifestyle.
- GOOD =When they are used as a financial tool to ease and structure retirement lifestyle and understood by the senior and their families with a plan.