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Orlando Florida | Reverse Mortgages ~ Are they all hype??

July 14th, 2007 by asands

Terms blared at consumers include Peace of Mind, Security, and Quality of Life. What they do not discuss is the downsides to such a program in the short and long terms.

Terms blared at consumers include Peace of Mind, Security, and Quality of Life. What they do not discuss is the downsides to such a program in the short and long terms.

 

Daytime Television is inundated with many new commercials with trusted actors/spokespeople who are adamant that the Senior Citizen public needs access to the equity in their homes via a Reverse Mortgage
The terms blared at consumers include Peace of Mind, Security, and Quality of Life.  What they do not discuss is the downsides to such a program in the short and long terms.

There are very pronounced limits to the Reverse Mortgage that are not always outlined in advertisements or even by the Loan Originators that pitch these loans. 

Now, while AARP and HUD both endorse this program for Seniors, AARP recommends and HUD requires at least two counseling sessions to make sure the borrowers know the positives AND the negatives of this program.  Both groups understand the potential damage that this loan program could cause and want to be sure that Seniors receive full disclosure.

My personal and professional opinion is that there are situations where the reverse mortgages do fit.  I think that some homeowners have certain goals which can be achieved through a reverse mortgage.  I think that it definitely fits a niche market.

That being said, I do not believe it is meant to work for the masses.  I believe it truthfully DOES NOT FIT most potential borrowers.

If a borrower has:

  • good credit,
  • some income by which they can repay a mortgage,
  • adequate equity,
  • minimal debt,
  • controlled expenses,
  • affordable lifestyle,
  • the need to continue growing wealth during retirement,
  • the desire to leave an inheritance to their family/friends,

…then I believe that a Conventional Mortgage – a "Forward" mortgage – and proper use of secure, liquid investments can offer the borrower more security and definitely better investment potential over a longer term than a Reverse Mortgage.

With a cash out refinance and funding an annuity, a Conventional Mortgage can create a better financial plan for future needs and emergency funds.

Click on the following link to read about the Pros and Cons of Reverse Mortgages.

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Teri Isner, CIPS, CRS, GRI
Keller Williams At-The-Lakes
66 Riley Road
Celebration, Fl 34747

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