Reverse Mortgage Guide

You have to like a blog entitled “The Mess That Greenspan Made.” Even if you don’t agree with the premise, it’s easy to understand that writer Tim Iacono is raising a point of view that is destined to gain more interest and support as the economy continues to deteriorate.

Iacono has an interesting take on the matter of retirement and reverse mortgages. In a posting entitled “Myth: Your house can finance your retirement” he quotes Money magazine as saying that “the best way to look at your house is as a place to live, not a retirement account. So in the years leading up to retirement, don’t overinvest in it with the idea that you can get that money out later. Keep your mortgage and other housing expenses to no more than 28% of your income, and don’t prepay your mortgage instead of saving for retirement.”

Why is it that folks must make a choice between pre-paying a mortgage and saving for investment? Why is it so wrong to add $50 or $100 to a monthly mortgage payment and pay down a home loan? Such simple prepayment plans can save borrowers tens of thousands of dollars in potential interest costs and cut mortgage terms by many years, thus making retirement a whole lot easier.

Does the term “saving for retirement” mean only investing in stocks and bonds? While such a formula might be great for stockbrokers it sure doesn’t seem like such a great idea for homeowners looking to have lower monthly costs.

For the full posting, see: Myth: Your house can finance your retirement

This entry was posted on Thursday, November 15th, 2007 at 6:51 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.