CBS Video: For the House Rich and Cash Poor, a Reverse Mortgage Might Be Right

A reverse mortgage may be right for someone who is cash poor and house rich, says a CBS News Money Matters online segment this week. The segment focuses on whether a reverse mortgage is right for someone with little income and a small mortgage payment. In a situation where someone is cash poor and house rich, the CBS advisor says, a reverse mortgage may be suitable.

The reverse mortgage could be one option, says Q&A with Ray advisor Ray Martin. However, Martin cautions against “hefty fees” as well as insurance and real estate taxes that must be paid.

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View the CBS News segment.

Written by Elizabeth Ecker

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  • Mr. Martin covered a lot in a little time.  It was interesting he felt to cover taxes and insurance on a reverse but not a forward mortgage.  He also failed to point out that what can be done a forward mortgage in buying investment can be done with a reverse without the financial headache of two monthly mortgage payments.  Of course the forward cash out loan might produce more cash for the down on the other property.

    What Mr. Martin did not warn about was using borrowed monies in obtaining the other property. 

    When will TV advisors stop with the cliches and start talking about HECMs in mortgage terms?  They are no longer just for the house rich and cash poor. 

  • I’ve never been warned about “hefty fees” when discussing a mortgage with someone (forward mortgages have them too).  I’ve never been warned that my house could be foreclosed on if I don’t pay taxes and insurance when discussing a mortgage (it happens with ALL mortgages).  I only hear these arguements when a non-reverse mortgage financial “professional” discusses reverse mortgages. 

    My first question to this person inquiring would be, “How do you plan to invest in investment property if your only income is social security and it barely covers your mortgage?”  I don’t know any good financial planner who advises peple to borrow money to invest money. 

    Also, if only income is social security, then odds of getting approved for a refinance are very low (obviously, we don’t have enough information to know for sure).  A reverse mortgage is probably perfect for this person.  He should have just left it at that.

  • akoolkat2,

    Try the National Council on Aging, they have a great benefits check up (“BCU”) program you can go through.  Even if Congress and HUD grant you your dream, the last barrier remains.  Will the lenders want to provide HECMs under the conditions HUD creates?

    You still do not seem to understand that a grass roots campaign would be very effective for all kinds of reasons.  Call me a cynic or anything else you choose but a sea of gray and white hair speaks volumes.

    One of my acquaintances was the individual who started the sit-in at Cal State SF back in the 60s.  That was far less expensive and more effective than a few lobbyists ever would have been.

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