Retirees are living longer than they may have anticipated, and for those who own their homes but are cash-poor, a reverse mortgage might seem tempting. But don’t be taken advantage of. These are often expensive and unnecessary. Though reverse mortgages have their place, it’s a rare one. Be cautious.
“A reverse mortgage is an expensive way to enable one to tap an asset of last resort–their home," says Ron Roge, chief executive officer of R.W. Roge & Co. He adds that it should be for people who have exhausted all of their other options and want to remain in their homes for the duration of their lives despite expenses such as property taxes, insurance and home maintenance.
The “experts” quoted in the article suggest different alternatives like selling the home to their kids and asking for loans from friends and family before using a reverse mortgage.
I haven’t been a big fan of Forbes magazine in a while, so I can’t say I’m surprised they ran something like this.