Money Magazine Columnist Looks at Reverse Mortgages
May 23rd, 2008
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Walter Updegrave, Money Magazine senior editor, has now written about reverse mortgages.
In his article, Reverse mortgages: Beware the come-ons, Updegrave says “reverse mortgages can help cash-strapped retirees generate extra money for living expenses, pay for home improvements, lower other debts or fund the occasional splurge.
“There’s also a downside to reverse mortgages’ growing popularity, however. Loan-origination fees that can top $7,000 on a $500,000 home are attracting aggressive salespeople intent on getting you to take out a reverse mortgage whether you need one or not. Some may try to persuade you to invest the proceeds in high-priced financial products, such as annuities, boosting their commissions even more.”
Updegrave, who I met long ago when appearing on Oprah, offers several areas for borrowers to consider:
___Making sure you really need it
___Looking out for the product pitch
___Getting help from a financial planner
Updegrave also mentions what he calls “sure losers.” What does he mean? “A salesperson might prod you to get a reverse mortgage so you can buy an annuity. But the annuity’s value will never catch up to the mortgage debt.”
For the full story, see: Reverse mortgages: Beware the come-ons
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