NBC’s the Today show ran a short segment this week featuring a viewer question about a reverse mortgage loan and whether it was the right option for an Oregon couple.
The viewer asks: “My my husband and I have been told by friends we should do the reverse mortgage on our home. We could use some money for repairs on the house, but I’ve heard some bad things about reverse mortgages. We have a VA loan, owe just over 46,000, house is probably worth 115,000.”
Today Show guest and financial expert David Bach responded to the question, saying that a reverse mortgage is not the solution for home repairs.
“First of all, nobody does a reverse mortgage to fix up their homes, that’s a terrible idea,” Bach said. “A reverse mortgage is for somebody who’s over the age of 62 and you desperately need the income. Basically, you’re getting money back from the bank, but you’re losing all the equity in your home over time. So it’s the absolute wrong thing for you. Even if you want to do a reverse mortgage you [should] go to reversemortgage.org or go to hud.gov for more information. You’re going to actually have to pass and take a course before you’re approved for a reverse mortgage.”.
Written by Elizabeth Ecker