A Word about Reverse Mortgages

A recent article in The New York Times has caused me to comment about tapping into your home’s equity, which for many people is their only real asset. This article addresses some very key points regarding these loans, which require much consideration and understanding on the part of any homeowner who is thinking about this option.

A reverse mortgage allows the homeowner to access wealth that is otherwise out of reach while still living in the home. While some claim that reverse mortgages have improved their lives and provided money they needed for retirement, there are many pitfalls associated with these loans.

Here are some questions to ask before taking a reverse mortgage.

Is a reverse mortgage the best option?
How long do you expect to stay in your home?
Do you want to leave your children an inheritance?
What are you going to do with the proceeds of your reverse mortgage?
What kind of payout is best? (If you do not need the money right away, you might not want to take all the money upfront, since it starts accumulating interest charges immediately.)

It is extremely important to understand the impact of these loans on your personal finances so please speak first with an independent financial advisor to consider carefully all the options before taking a reverse mortgage