Nothing is ever all bad or all good, says CBS MoneyWatch in a recent segment, and the same is true for reverse mortgages, the news outlet finds in an interview with a real estate attorney. But the loans may be increasing in popularity in the coming months and years.
Neither fully positive nor fully negative on reverse mortgage loans, real estate attorney Benjamin Weinstock tells CBS news in a video segment and written article about reverse mortgage benefits and shortcomings from his standpoint.
Pros noted by Weinstock are the ease by which borrowers can qualify; namely those who do not have substantial income or stellar credit to qualify. On the flip side, he says, the loans can be more expensive than conventional loans and “can result in disinheritance” of the home’s heirs.
The segment fails to discuss the process by which reverse mortgage heirs can inherit the repayment of the reverse mortgage and can complete that repayment however they so choose.
“But reverse mortgages may be ready for their own reversal of fortune,” CBS writes. “Recent government regulations have strengthened them and baby boomers are looking for additional sources of income to fund their retirements, financial experts say.”
CBS speaks with Bankrate Chief Financial Analyst Greg McBride who tells the publication he sees reverse mortgages as a major lifeline for many Americans.
“The reverse mortgage is going to be a lifeline for millions of retirees in the years to come,” Greg McBride told CBS MoneyWatch. “In large part that’s because people may not have enough saved in their 401(k) plans or IRAs, and the bulk of their wealth may be tied up in the equity in their home. The reverse mortgage becomes the avenue to access those funds.”
CBS also speaks with Alicia Munnell of the Boston College Center for Retirement Research who advises that if borrowers don’t plan to remain in their homes for at least 10 years, the reverse mortgage may not be the best option. Otherwise, she tells CBS, she is a fan.
Written by Elizabeth Ecker