U.S. News Spells Out 8 Reverse Mortgage Considerations for Retirees

A reverse mortgage can be a viable tool for retirees who are facing daunting retirement expenses, writes U.S. News and World Report contributor Rachel Hartman in an article published Tuesday. However, there are considerations for taking out a reverse mortgage as a retirement strategy, she writes.

Titled “8 Factors Retirees Should Consider Before Getting a Reverse Mortgage,” the article spells out eight reverse mortgage considerations for prospective borrowers ranging from the fees that borrowers can expect to the types of payment options that are available.

“Understand what it entails,” is one factor outlined, while payment options, home equity amount, fees, long-term thinking, family considerations, loan purpose, and other options account for the rest.

Advertisement

The article presents the reverse mortgage neither as a good nor bad strategy, but outlines the things retirees should think about.

“To decide what is the best choice for them, homeowners should consider their personal situation and how they will use the proceeds from a reverse mortgage,” Bruce Bufe, senior vice president of residential lending for Draper and Kramer Mortgage Corp., tells U.S. News. “For example, some homeowners are looking for a supplement to monthly income, while others might need to cover a large one-time expense or simply want to have access to funds they can tap into in an emergency.”

Read the full article at U.S. News and World Report.

Written by Elizabeth Ecker

Join the Conversation (5)

see all

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

  • Maybe you could ask either Rachel Hartman or Todd Huettner, president of Huettner Capital in Denver, what he/they mean, and have them provide examples.
    “In many cases, the home will need to be sold to pay off the loan. That means family members would need to provide funds or financing to cover the loan amount at that time”

  • I read that article, there were a lot of errors made and misuse of terminology used.

    Yes, there are considerations for taking out a reverse mortgage as a retirement strategy. However, there are many other reasons for taking out a reverse mortgage other than as a retirement strategy.

    The article refers to 8 Factors Retirees Should Consider Before Getting a Reverse Mortgage. The article also spells out 8 reverse mortgage considerations for prospective borrowers ranging from the fees that borrowers can expect to the types of payment options that are available.

    Do they not think we are knowledgeable enough or that we have no passion for our seniors? Do they not know we go over all of these things and a lot more with our prospective senior borrowers?

    The article has a lot to be desired and I did not feel it gave us, the industry professionals the credit we deserve! Read it, judge for yourselves!

    John A. Smaldone
    http://www.hanover-financial.com

    • Hey John,

      Maybe you are looking at this the wrong way. After all are we that unbiased?

      The one party you do not speak about counselors is the more likely party. No one expects that we are sufficiently unbiased (other than ourselves who probably lack the perspective to make a fair evaluation of having anything close to that quality when it comes to HECMs) but everyone expects HECM counselors to be as unbiased as anyone who is that knowledgeable about HECMs.

      So I see this as questioning whether the combination of originators and counseling will provide the information in the way needed so that the senior can make an informed decision. Of the two groups, it is counseling who is expected and should be expected to fill in the gaps on HECMs that we may not address due to our perceived bias.

  • Very much a routine article with the usual basic info presented in the vast majority of HECM articles.

    However, there always seems to be a statement or two, randomly found in every article that would make the uninitiated reader scratch their head, In other words, they will be following the narrative pretty well until they come across a statement like this:

    Quote from the article-
    “In many cases, the home will need to be sold to pay off the loan. That means family members would need to provide funds or financing to cover the loan amount at that time” -End Quote.

    This is misleading in that it suggests that the heirs are probably
    going to be stuck with big costs, when the reality is that they won’t: the HECM is a non-recourse loan, and the sale of the house is guaranteed to cover whatever is owed on the loan.

    The quote above reads: “”In many cases, the home will need to be sold to pay off the loan.”

    Well, that part’s true, standalone, but the next sentence, quote: “That means family members would need to provide funds or financing to cover the loan amount at that time.”

    Well, no, the family members (heirs) would only need to provide funds or financing to cover the loan if they want to take-ownership of the home. Alternately, they can do nothing at all, and the lender can sell the home, and the proceeds of which will cover the amount owed on the loan in full; regardless of the fair-market value of the home at that particular point in time.

    The article, in effect, misses the opportunity to point out one of the best features of the HECM (non-recourse), and turns-around the description of the situation into one in which, “it-sounds-like,” the heirs would have something to be seriously worried about.

  • The discussions here mirror the discussions on other topics involving the Trump administration, complete chaos. What is the status of spot approval of RM for condo owners?

    Thanks for any input here.

    Bob Krowas

string(107) "https://reversemortgagedaily.com/2018/04/03/u-s-news-spells-8-reverse-mortgage-considerations-for-retirees/"

Share your opinion