Reverse Mortgage...Good or Bad

Just as in any loan program, it depends upon the client.  Reverse mortgages have their purpose.  Personally, I think they will become more popular with the baby boomer generation sooner than later.  The key to this program is the same for any program - does the client fully understand what the program is and how it works?  It is prudent that we use full disclosure with these programs and set people up for success.  And, I have found that in certain situations, family is involved so they understand what mom and/or dad is doing.  Yes, they can be beneficial for the right client.

Reverse mortgages are definitely becoming more popular.  Our office has closed a few in recent months.  One of the key benefits to help a senior homeowner is its flexibility.  They can have a monthly draw of an amount they choose or take a lump sum. In my opinion, the "HECM" reverse offered by HUD-approved lenders through FHA is the superior option to the Homekeeper program.  A key thing to remember is that no one under age 62 may remain on title to the property and the homeowner does need to have equity in the home.  The funds available will be relative to the amount of equity and the age of the homeowner.

It is a good product as long as it is used properly and explained thoroughly.  All seniors who apply for a reverse mortgage will be provided counseling either in person or by phone reagrding their available options.

Hey Jos.. I see this can go both ways.. Can be both negative and positive...