CNN: Ask the Expert on Reverse Mortgages

NewImageMoney Magazine’s senior editor Walter Updegrave takes a readers question about reverse mortgages earlier this week.

The reader asks:

My wife and I are 62 and just starting to take Social Security. We’re thinking about taking out a reverse mortgage and using it as a line of credit. The extra money could come in handy. What do you think? — S.W., Red Oak, Texas

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Usually the answer is pretty short, but Updegrave writes an essay as a response.  I’ve spoken to him a couple times and he always asks great questions, see his response at the link below.

Should I take out a reverse mortgage?

 

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  • Overall it was a great article but the referenced article on the alleged Mortgage Professor’s Web Site was less than inspiring. The referenced article was dated January 2010. Some of the gauges it gave for measuring the best HECM for the buck were odd and in conflict with some of advice the original author gave.

    For example, the CNN article covers Savers but the referenced article could not because it predates Savers. Then the referenced article advices using excess funds on a fixed rate HECM to buy annuities which the CNN author advises against.

    Then the CNN article goes off the deep end about technical defaults. It concludes that seniors must sell their homes but that is not the only course of action even though it definitely is one.

    Overall the article was very good except for the referenced article to the alleged Mortgage Professor’s Web Site. The emphasis on the financial issues which indicate when a Saver is preferred to a Standard was very good. It was a sincere, fair, rational, and reasonable look at the HECM by someone with a strong financial background.

    While senior advocates will screech that the author failed to ask about potential illness or disease (things people cannot control and do not know when they will occur) and failed to grill the readers on FIT issues, the author gave sufficient information to look at the loan and compare it to other alternatives. Senior advocates may hate it but it was a well written and reasoned presentation.

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