Reverse mortgages “aren’t a silver bullet,” says a U.S. News and World Report article published this week, but they have become more affordable through the introduction of the HECM Saver product, it says.
“One way to boost your income in retirement is to let the bank send you a monthly check,” the article reads. “A new breed of reverse mortgage might be especially appealing for certain seniors.”
U.S. News and World notes critics of the reverse mortgages who cite the expense and complication associated with the products, and details the fees borrowers face under the standard HECM product as well as the new Saver option.
“The newest model cuts the initial costs pretty dramatically,” the article states. The loans are best for customers who don’t need as much cash and won’t have the loan out for a long time, it says, citing input from National Reverse Mortgage Lenders Association President and CEO Peter Bell.
Unless a borrower needs all funds at once, a line of credit or monthly payment option at an adjustable rate will be the most economical choices, the article says. Finally, it’s not a silver bullet, U.S. and World quotes National Council on Aging’s Vice President, Home Equity Initiatives Barb Stucki as saying, and should be part of a carefully designed retirement plan.
“You can’t fool yourself into thinking that your mortgage has vanished,” Stucki said.
View the U.S. News and World Report article.
Written by Elizabeth Ecker