CBS News Jill On Money: Reverse Mortgages Versus Inflation

Responding to a question posed by a caller into CBS Money Watch’s radio show Jill On Money, the show’s host and financial expert Jill Schlesinger weighs the option of a reverse mortgage for the caller. 

The caller, who qualifies based on his age and home equity, says he is interested in tenure payments that will boost his monthly cash flow for life. 

There are some considerations to make when getting a reverse mortgage at such an early qualifying age, Schlesinger notes, including inflation over time. 

Advertisement

“Your $1,800 a month isn’t going to be $1,800 in 20 years,” she says, noting that what can be purchased in today’s dollars will not be the same over time. 

“Augustine from CA is considering whether a reverse mortgage on his $450,000 house is a good idea for him,” Schlesinger wrote in a summary of the show. “As I reminded him, the fixed payment of a reverse mortgage will remain constant, while prices will increase. In other words, the reverse mortgage payment that might make sense today, will not keep pace with inflation.”

While she did not support the decision fully, Schlesinger recommended taking the loan later down the road, around age 73 instead. 

Listen to the full discussion via podcast at 37:50

Written by Elizabeth Ecker

Join the Conversation (2)

see all

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

  • Goodness, another pretender talking about things she doesn’t understand!
    Doesn’t she know that you can change the payment and/or term whenever you wish?  Maybe the “tenure” payment is not the best option to begin with.  Maybe a line of credit for half the available funds and a 10-15 year payment on the remaining 50 percent of the funds would be better.
    She never even mentions what she would consider to be a better option for her poor hapless client. Yes, he becomes her client when she gives him professional advice.
    What will rising interest rates do to loan proceeds while her client waits until he is 73?  She doesn’t understand the program at all but that doesn’t stop her from handing out advice about it.
    Makes me shake my head.

string(102) "https://reversemortgagedaily.com/2012/10/08/cbs-news-jill-on-money-reverse-mortgages-versus-inflation/"

Share your opinion