Reverse mortgages may have suffered from negative perceptions over the years, but program updates have since changed these financial products for the better, according to ABC Action News Tampa.
“The reverse mortgage’s reputation suffered hits over the years for high interest rates and sad stories of people who ended up worse off,” said ABC Action News correspondent Jackie Callaway in a recent television segment.
ABC interviews Mac Tennant of St. Petersburg, Fla.-based Access Reverse Mortgage, who described some situations that may have contributed to the blemishes on the reverse mortgage’s reputation.
“People who were used to living more or less paycheck-to-paycheck all of a sudden had $100,000 or $200,000 in the bank, and there were some tragedies obviously when that happened,” Tennant said.
But program changes that curb the upfront draw to 60% of the principal limit in the first year of borrowing, among other updates in the past few years, have helped reverse mortgages improve its reputation, suggests ABC Action News. The article, however, did not explicitly mention the recent rules under the Financial Assessment, such as credit and income underwriting requirements.
“I would highly recommend it,” said Joan Helmich, who was interviewed in the segment and who, along with her husband, settled on a reverse mortgage to help them with their monthly $2,000 house payment. “Just the equity that was in the house when it went into the reverse mortgage—it’s like a load off your shoulders, and it’s good.”
View the ABC Action News segment.
Written by Jason Oliva