TIME: Personal Finance Expert Champions Reverse Mortgages

TIME recently featured a segment with renowned author and personal finance columnist, Jane Bryant Quinn, where she discusses how her perspective has changed on reverse mortgages and why it can be a good option, even if you aren’t running out of retirement income.

As many in the industry are aware, recent changes have put new rules in place for reverse mortgages—changes that Quinn admits really pushed her to give reverse mortgages another look.

Formerly, people would take their reverse mortgage in a lump sum, then would run out of money and wouldn’t be able to pay their insurance or taxes, she explains.


“Now congress changed the rules, basically they take the money out for you and they only give you a certain amount per month that they are sure will last for life,” Quinn says. “This change has very much reduced the risk for older people with very little money.”

For people on the younger side, she explains that it can be very helpful if you take a credit line instead of a lump sum if you qualify for a reverse mortgage. This way, people could make interest on it for each year they don’t use it.

“Then if you’re taking money out of your savings or investments and the market is down and you want to sell investments, you can take money to pay your expenses out of your home equity credit line,” she says.

Quinn talks more in-depth about how her views on reverse mortgages have changed in her latest book, How to Make Your Money Last: The Indispensable Retirement Guide.

See the full video on TIME.com here.

Written by Alana Stramowski

Join the Conversation (1)

see all

This is a professional community. Please use discretion when posting a comment.

  • I like the publicity given to our product but there are a lot of flaws in what Jayne Bryant Quinn says.

    First off, congress has not changed the rules by taking money out of the proceeds for a senior to give them a certain amount of money per month that they are sure will last for life! Quinn goes on to say,this change has very much reduced the risk for older people with very little money.

    Well the way Quinn puts it is very misleading, yes, it is true if a senior has enough proceeds from the gross principle limit after paying off any debt if any, they can take the option and receive a certain amount of money on a monthly basis as a life time income based on actuary tables.

    What I said may wind up being the same when it is all said and done but the way Quinn describes it can be very confusing and misleading!

    Secondly, Quinn says, for people on the younger side it can be very helpful if the senior takes a credit line instead of a lump sum if they qualify for a reverse mortgage. She goes on to say, this way, people could make interest on it for each year they don’t use it.

    Well that is not true, if the senior decides to leave funds in a line of credit instead of utilizing other options, those funds will receive a growth rate each month equivalent to the interest rate assed plus the MIP. In short the amount of money the senior can borrow grows each month by the growth rate. The way she states it in her article, it is very misleading and can be misconstrued as an investment with a return on principle, which is not the case.

    Last on the list, I think Quinn is trying to say if market conditions are flat or below market, it may be better to borrow from your HECM line of credit, rather than cashing in your investments, paying penalties on them and losing principle value, which could be a very good hedging tool!

    The point I am trying to make is that is many ways, Jayne Bryant Quinn is saying what I just spelled out but her terminology is wrong and misleading to the public, which could do more harm than good!

    I know Quinn means well and she is supporting the HECM/reverse mortgage product but all of us need to make sure we explain all facets of the product the right way so our seniors fully understand all there options and know exactly what their options are and what they will wind up with!

    John A. Smaldone

string(101) "https://reversemortgagedaily.com/2016/05/12/time-personal-finance-expert-champions-reverse-mortgages/"

Share your opinion