NASDAQ: Reverse Mortgages Work for Some, Not All

While reverse mortgages offer a number of benefits to borrowers, they might not be a perfect fit for everyone, according to an article from NASDAQ.

Though there are numerous benefits of a reverse mortgage, the article also offers several “cons” such as potential Medicaid impact, fees associated with origination and closing costs, as well as the uncertainty of interest rates and the overall depletion of home equity. 

When considering the pros and cons associated with reverse mortgages, NASDAQ suggests that the loans can have different impacts for different people, especially since not all borrowers are alike financially.

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“This kind of mortgage is frequently promoted on television as the next best thing for seniors, with promises that the process is safe and practically risk free,” the article writes. “It is easy to be skeptical about such claims, but the truth is that reverse mortgages are a good option for certain seniors in certain economic situations.”

Read the NASDAQ article.

Written by Jason Oliva

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  • It is clear that Joe Young is a novice when it comes to reverse mortgages. Unlike Salter or Evensky, Young concludes: “Your home equity will be consumed by taking the mortgage. You will have fewer assets to leave to your family as a result.”

    It seems Joe like so many other authorities on financial matters do not seem to understand that a HECM is simply a nonrecourse mortgage and that there is no reason why the HECM has to be unpaid when it matures, i.e., goes into the due and payable status. Just because no payments are required that does not mean that payments cannot be made as reflected in the Standby Reverse Mortgage strategy of Salter and Evensky.

    All of this talk about equity being consumed, etc. represents a very sophomoric understanding of a very simple mortgage with some very favorable terms for seniors. The writer needs to attend the “HECM 102 course.”

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