A syndicated financial advice columnist who once only recommended reverse mortgages as a last resort has changed his tune.
In response to a question from a reader about why people are afraid of reverse mortgages, Benny L. Kass — whose work appears in the Chicago Tribune, Washington Post, and other national papers — said that in the past, he was turned off by high upfront costs, lax regulation of the industry, and television commercials featuring well-known pitchmen.
“For years, celebrities like Fred Thompson, Henry Winkler, and Pat Boone were touting the benefits of reverse mortgages, but they were not disclosing all of the facts, all the pros and cons,” Kass wrote.
But Kass allows that the Financial Assessment changes, as well as the counseling requirement, have convinced him that borrowers can’t enter into a Home Equity Conversion Mortgage without learning about the product.
That’s why he writes that it “probably makes sense” for the letter writer’s friend, a man who owns a home outright and has no spouse or heirs, to take out a reverse mortgage in order to help with cash flow. Still, Kass advises potential borrowers to explore alternatives before signing on the dotted line.
“I will continue to strongly suggest that anyone considering a reverse mortgage should look at all the options first, such as refinancing, selling your present home and downsizing, or getting loans or gifts from relatives,” he concludes. “Once you have carefully reviewed all options, then make your decision.”
Written by Alex Spanko