What do you think of Reverse Mortgages? I’m going to give you my unvarnished opinion, warts and all.
First, the homeowner has to be at least 62 years old. The purpose of a Reverse Mortgage is that there will be no more mortgage payments for as long as the homeowner stays in the home.
The only real negative of a Reverse Mortgage is the fees. A large chunk of equity is spent in fees. This alone gives this type of mortgage a bad name, and with good reason.
On the other side of the coin, I recently met a woman whose aunt had owned her home forever and didn’t want to move. The problem was that other than her social security income, the equity in her home was all she had. She was only 72 and very healthy and vibrant but the rest of her life looked grim with years of penny-pinching ahead of her.
She did a reverse mortgage and her niece told me it changed her life. She was able to travel, go out for meals with friends, and live her life without all that money stress.
The niece was going to inherit the home someday but, in the meantime, it changed her aunt’s life for the better.
So, I learned not to judge too quickly.
I still don’t like them but it seems there is definitely a place and a need.
Do you know anyone who has a reverse mortgage? There are loads of entertainment people who have asked about them – it would be great to share real-life stories of how they’ve helped or hurt.