Influenced by the new consumer protections that have been added to reverse mortgages in recent years, a number of financial publications lately have been reporting why now is the time for retirees to reconsider these loan products in retirement. And now, The Fiscal Times is the latest pub to chime-in on this growing perception shift.
In a recent article, The Fiscal Times explores why retirees may want to take another look at reverse mortgages, citing new changes to the Home Equity Conversion Mortgage program, along with a newfound interest among financial advisers in its reasoning.
“While the rules for reverse mortgages have changed, so has the stigma surrounding them,” The Fiscal Times writes, pointing to a growing interest among financial planners who are now looking at reverse mortgages as a “sensible part of a holistic approach to retirement planning.”
Recent academic research has also added to the shifting perception of reverse mortgages. This year, two separate research papers from the University of Georgia and Ohio State University found that consumers taking out reverse mortgages were more likely to have higher net worth than those who didn’t use them, and that three-quarters of reverse mortgage borrowers said obtaining these loans improved their overall quality of life.
Despite their increased appeal, reverse mortgages still have some drawbacks, notes The Fiscal Times.
“They carry high fees, so they’re an expensive way to tap into your home equity,” the article states. “If you’re ever planning on moving out of your house, or if you hope to leave it to your heirs, using a reverse mortgage would likely leave you little equity by the time you do move out.”
Read The Fiscal Times article.
Written by Jason Oliva