Reverse mortgages have in the past been looked upon as a last resort by many CPAs and financial advisors, but recent changes to the loan options available are making them more attractive, writes the Journal of Accountancy in an article published this week.
The journal is the flagship publication for the American Institute of Certified Public Accountants, a member-organization that reaches a membership of more than 350,000.
Taking an in-depth look at reverse mortgage products today, including rules, fees, private and family options as well as alternatives such as home equity lines of credit, the article explains to accountants how the loan programs can work for their clients.
In conclusion the Journal of Accountancy writes:
Reverse mortgages may be used for a variety of purposes, including saving a home from foreclosure, supplementing pensions and Social Security benefits, meeting current or future medical expenses, or just maintaining a comfortable lifestyle. Practitioners should be prepared to discuss the advantages, disadvantages, and alternatives to ensure that their clients make a well-informed decision.
The best time to take out a reverse mortgage may be now, as interest rates are at all-time lows. Currently, adjustable-rate HECMs are available for around 3%, while fixed-rate HECMs are around 5%. A CPA’s or financial adviser’s input into the investment decision may be crucial.
Written by Elizabeth Ecker