This story from the New York Times talks about seniors who have taken on reverse mortgages believing they could never lose their homes, but who have nevertheless lost their homes. The article gives some examples of how this has happened to people who didn't do anything wrong. It paints a pretty dim picture of some of the less reputable people selling reverse mortgages.
As with any financial arrangement, you have to have a thorough understanding of what you're getting into but it appears that many senior are signing up without that knowledge.
I recommend that anyone considering taking out a reverse mortgage, or who already has done so, should read this article. Although the article is American, the principles apply here in Canada as well. Click here to read the article.
Although a reverse mortgage has many potential benefits for senior homeowners, it also has its drawbacks. Reverse mortgages can have higher up front fees compared to other types of financing. As the homeowners get to retain the title of the home, they have the added burden of paying for insurance, taxes, maintenance and all other expenses related to the property. It is best to seek advice from a financial professional to see if a reverse mortgage is right for your situation.
ReplyDeleteI completely agree about getting advice from a financial professional. This is the only way that anyone can make a good decision based on fact and disclosure, not on promises.
ReplyDeleteLynne
Consulting for some advice from financial professionals about getting a reverse mortgage is indeed a wise decision. The drawbacks on reverse mortgage are indeed serious.
ReplyDeleteReverse mortgage is a nice financial instrument for the senior citizens in the country who do not have adequate retirement fund at their disposal and whose age is 62 or more.
ReplyDeleteReverse mortgage requirements
I agree. I don't worry about the seniors who go into a reverse mortgage fully understanding how it applies to them now and in the future. I only worry about the ones who don't really listen or don't understand, and end up getting into trouble. I guess it's the same with any form of financing really.
DeleteLynne
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ReplyDeleteUm... sure.
DeleteLynne
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