HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
CommentaryNewsRetirementReverse Mortgage

Column: Reverse Mortgages Have Their Place In Retirement Planning

Is a reverse mortgage a good retirement strategy? Yes — well, for some people. 

“Reverse mortgages have their place, but the problem is that they’re sold to people who shouldn’t have them because it doesn’t work for them,” Craig Smalley, a financial adviser and certified estate planner, tells MarketWatch in a recent column. “They are for those that have little or no retirement funds, and have no heirs really to speak of.”

The home equity loan has become a popular way for baby boomers to fund their retirement, as $15.3 billion in reverse mortgages were taken out in 2013, an increase of 20% over 2012, writes Cliff Goldstein, a member of the personal finance team at NerdWallet, a personal finance website. 

Being able to convert home equity into cash without selling the home, no monthly payments, and no steep income or credit requirements are among the benefits of a reverse mortgage. 

However, Goldstein notes that there are also drawbacks, including high fees and property taxes, insurance and maintenance expenses. 

“Be sure to consider all of your options before making a decision,” he writes. 

To read the full article, click here

Written by Emily Study