This New York Times article points out some of the drawbacks to reverse mortgages. These include high fees and pressure from salesmen to invest in high risk investments. Not all reverse mortgage salesmen are charlatans, but it is important to fully understand what you are getting yourself into with a reverse mortgage. The things to consider are what are the fees the mortgage company will charge, what is the interest rate and how much money are you going to be able to take out of your home. Also important to consider is whether you want to leave the home to your heirs or beneficiaries. If you do, a reverse mortgage can create a situation where the payoff is greater than the value of the property upon your death. If you are considering a reverse mortgage transaction, talk with your estate planning attorney and your financial advisor first to see if the mortgage you are considering is a good deal and what your other options might be.
Here’s the link:
Tapping Into Homes Can Be Pitfall for the Elderly – New York Times