HuffPost: Top Reasons to Get a Reverse Mortgage

In the latest in a series of reverse mortgage coverage, the Huffington Post this week published an article originally sourced by NowItCounts.com. The area of focus: 10 reasons to use a reverse mortgage. 

Among them are several of the reasons loan officers today focus on in their work with prospective borrowers: eliminating an existing mortgage payment, repairing a home, or simply providing a plan B in the event of an unforeseen expense. 

But also on the list are some less-often noted uses such as helping to manage disability costs, starting a small business or helping family members who need it. 

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Whether you agree with the uses or not, visit the Huffington Post to check out the full list. 

Read the full article.

Written by Elizabeth Ecker

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  • Reasons 3, 9, and 10 are very questionable especially if the borrower has concerns about adequate cash flow later in retirement.

    Few seniors use reverse mortgage proceeds for the “finer things in life” and for good reason. This is the plague of the lottery winners which also plagues a number of reverse mortgage borrowers as well.

    Paying for other’s college through increased personal debt is very noble; however, what happens when one family member feels cheated because another grandchild is getting help with college while that grandchild is not. Again overspending on family is the plague of lottery winners.

    As to starting a new business, there is a very huge chance that business will fail before the first five years of the business ends. There can be less risk in betting in Vegas than starting a new business. Personally, I do not recommend either one.

    Should seniors be denied using HECM proceeds in the manner they see fit? That is not our call but reminding borrowers that the proceeds from a HECM are finite and not infinite is certainly appropriate. Also advising them to seek the counsel of a fee based CFP or CPA is probably not a bad idea either.

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