Fears about reverse mortgages have proven unfounded so far according to Robin Mile, a borrower who initially resisted taking out the loan.
“It was salvation for me,” the 70-year-old Pikesville, Md., resident said to the NY Daily News. “I just wish that more seniors weren’t so afraid of it.”
Reporting that reverse mortgages are now cheaper, the Daily News writes that the release of the HECM Saver could mean it makes sense to address shorter-term considerations — either for adding retirement income or for getting cash out of a home if it’s hard to find a buyer.
“This is a loan where you really need to be careful to understand what your options might be,” says Barbara Stucki, vice president for home equity initiatives at the National Council on Aging, a nonprofit advocacy group. But in the right circumstances, she says, “it can provide more flexibility.”
The changes are beneficial for seniors overall, according to Ted Sarenski, a personal financial specialist who chairs the ElderCare/PrimePlus committee for the American Institute of Certified Public Accountants. But they don’t change his advice, and that of numerous other experts, that reverse mortgages should be pursued mostly as a last resort.
“It’s a way to stay in your home without having to liquidate it and move,” he says. “But the home is usually the last asset that you own. If you still have IRA money, or pension money coming in, you probably shouldn’t look to a reverse mortgage.”