Reconsidering reverse mortgages: New thinking on an old product [Video]
Posted on Tuesday, February 14, 2017 at 5:34:22 PM
Reverse mortgages have been the subject of some debate within the financial world: Some see them as a way for retirees to leverage the equity in their home and generate much needed income in the golden years. Others criticize some lenders as using the mortgage product to prey on desperate seniors.
Yet, in the face of historically low interest rates and increased lender flexibility, many seniors have found that reverse mortgages can be a great tool to help bolster a nest egg and pay for medical bills. The Wall Street Journal reports that savvy younger seniors who qualify for reverse mortgages have been carefully deploying the tool to great effect.
"Now is an exceptionally good time to be considering adding a [reverse-mortgage] credit line to the retirement blueprint," Shelley Giordano, chair of the Funding Longevity Task Force at the American College of Financial Services, told the Journal.
The key, as Giordano states, is to establish the line of credit as young as possible - traditionally 62 at the earliest - and only tap into it when absolutely necessary. As away, consulting with a trusted lender is advised before any homeowner embark on a reverse mortgage.