Reverse Mortgages Will Become More Attractive, NECN Segment Says

“Read the fine print,” advises Jennifer Lane, certified financial planner, in an interview with New England Cable News this week on the topic of reverse mortgages. “That’s why a lot of financial planners tell people to stay away from reverse mortgages.”

Lane cites high closing costs as something borrowers should look out for, but says the loans have the potential to become more commonplace.

Advertisement

“We’re all expecting things to happen over time that will make [reverse mortgages] more attractive for people,” she said.

The segment notes the “new” Saver product and its lower fees and also discusses reverse mortgage alternatives such as a home equity line of credit or selling the home.

Lane also touches on the issue of non-borrowing spouses of reverse mortgage holders, but doesn’t seem to present the whole picture.

“Be very careful, because some older reverse mortgages are written so surviving spouses could have a problem,” she says. The topic of non-borrowing spouses has been brought up in two recent lawsuits filed by AARP. The timing of those mortgages being written, however, is not the contested issue in the one outstanding lawsuit.

Written by Elizabeth Ecker

Join the Conversation (5)

see all

This is a professional community. Please use discretion when posting a comment.

  • So tired of hearing that all reverse mortgages have high costs – costs are very similar to those of FNMA FREDDIE loans. Yes, as with all loans, there are lenders who may charge origination. All fees and costs must be disclosed properly – if your lender “skates” over the fees, or does not want to provide a list of fees – avoid them.

  • i agree     high cost as compared to what ? selling your home.. realtors charge 6% commission to sell , home equity loan? will the senior qualify ?…can they afford the monthly payments ?… principal payments are due after 10 years …. will the senior be able to afford that when their 80 or 90 years old ??    What about financial planner fees and money manager’s fees? How much do they charge by the hour or as a yearly management fee?  If a senior took a 100000 and kept in a HECM LOC, there isn’t any fees charged… If the senior took the 100000 and gave to a financial planner to invest and manage they can charge 2% to 10% as a yearly management fee…..It is time we start to ask these questions to a financial planner when they mention the cost of a HECM

  • Costs too high…too high compared to what?  Many seniors are unable to qualify for a home equity line of credit due to credit and income requirements, plus there’s the big difference of making payments and not required to make payments with a reverse mortgage.  Leaving the other alternative, selling the home, which is much more costly than a reverse mortgage and doesn’t include the additional expenses of purchasing or renting a new home.  I’m tired too of hearing the same rhetoric from mainstream media and those not fully versed on the matter. 

string(108) "https://reversemortgagedaily.com/2011/12/27/reverse-mortgages-will-become-more-attractive-necn-segment-says/"

Share your opinion