Some reverse mortgage advertisements may make the financial tool seem as though it is a “risk-free” way to fill financial gaps in retirement, but seniors should not be “suckered” into buying a reverse mortgage, advises Consumer Reports in a recent article.
“The ads don’t always tell the whole story,” says nonprofit Consumer Reports, adding that reverse mortgages can put retirement at risk.
The article cites the Consumer Financial Protection Bureau (CFPB) study that said many reverse mortgage ads today are either incomplete in their messaging or contained inaccurate information.
Consumer Reports acknowledges that the reverse mortgage market will likely grow as Baby Boomers retire and seek additional revenue streams.
“Nearly half of retired Baby Boomers will lack sufficient income to cover basic expenses and uninsured health care costs,” the article says. “This makes them all the more vulnerable to sales pitches for reverse mortgages from trusted celebrities such as Robert Wagner, Pat Boone, Alex Trebek, former Senator Fred Thompson and Henry Winkler, who played the lovable cut-up “Fonzie” on Happy Days.”
In the article, Consumer Reports also offers facts about reverse mortgages to avoid being misled by advertisements, including that borrowers still must “pay property taxes, insurance, utilities, fuel, maintenance, and other expenses.”
Read the article here.
Written by Cassandra Dowell