There has been a change in thinking about the reverse mortgage market, says a Nightly Business Report this week. “Once rife with fraud, [reverse mortgages are] now becoming a tool many retirees are using to make ends meet,” the report states.
PBS’s Money File segment details the “Do’s and Don’ts & Ins and Outs” of reverse mortgages.
Nightly News’ Karen Gibbs covers the non-recourse aspect of the loans, but cautions that there are closing costs as well as adjustable interest rates and mortgage insurance that can be downsides.
“If you’re thinking of a reverse mortgage as a way to get cash to pay bills or looking for ways to transfer assets in your estate, consult an attorney familiar with estate planning to find out what’s best for you,”
You’ll never owe more than the house is worth, no matter how high interest rates go or how many payments you`ve received. The mortgage is due in full plus interest and fees only when you move, die or sell the home. Any remaining equity belongs to you or your estate.
But there are downside to reverse mortgages: high closing costs, adjustable interest rates and mortgage insurance that can all add up and mortgage counseling is required by law. If you`re thinking of a reverse mortgage as a way to get cash to pay bills or looking for ways to transfer assets in your estate, consult an attorney familiar with estate planning to find out what`s best for you,” Gibbs advises.
View the video on NBR.com.
Written by Elizabeth Ecker
