CBS Boston: Reverse Mortgages Are Getting Better

Reverse mortgages are getting more popular and they are “getting better,” writes Certified Financial Planner Dee Lee in a CBS News Boston column this week. 

Covering reverse mortgage basics, the column includes an sample calculation of how much a 62+ home owner may be able to borrow. The loans are not for everyone, Lee says, and she does not recommend considering a reverse mortgage for people who are close to age 62. 

The column writes: 


These mortgages are not for everyone. Who should consider one? A cash strapped elder who wants to stay in their home! An individual who is on a fixed income and living in their own home and wants to stay in their home may find a reverse mortgage gives them the cash they may need to maintain their lifestyle, but more importantly may give them the cash they need to make repairs or modifications on the house so they can continue to live there.

There are no restrictions on how the money is used. Which worries me for many retirees are getting a reverse mortgage and going on a shopping spree, traveling with the money, or helping their kids get out of debt.

To be eligible for a reverse mortgage you must be at least 62-years-old and own your home although you can still have a mortgage. But should you be considering a reverse mortgage when you are 62? I don’t think so, unless there some extenuating circumstances….

Read the original column

Written by Elizabeth Ecker

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  • What calculator was this radio personality using?  What type of HECM was she looking at?  What was the age of the borrower, and what was expected interest rate?  The only time the principal limit itself was at $218,000 at the floor expected interest rate for a 62 year old with a house appraised at $350,000 was prior to October 1, 2009.  How the tenure payout works out to be as large as indicated is another matter.  (The only specific age the woman references is 62.) 

    While the piece is not particularly enlightening, it is encouraging in that the press is beginning to accept HECMs as a viable financial product but they still seemed mired by the old wives’ tales of yesteryear.  BUT this would be a big step forward if the vast majority of the financial and media communities at least accepted HECMs as loans of last resort with Savers being a smaller and cheaper version of the Standard.
    As one friend puts it, the article shows we still have a lot of “evangelizing” to do.  Instead of finding better ways to explain the product, we need to emphasize what the product is and its common features with products that the public is already familiar with.  We then need to learn what is exciting well respected members of the financial community to re-exam their long held positions on the products and provide well written summaries of those findings in such a way that influential media leaders can understand and absorb.

    In respect of the potential for expanding HECMs into the mainstream, things have never looked brighter but potential must be turned into endorsements or we are all wasting our time.  For now, the demand from our traditional market is shrinking.  It is time to     

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