Posts Tagged Home Equity Conversion Mortgage

Reverse Mortgages Seem To Be Winning New Respect

Reverse Mortgages Seem To Be Winning New Respect

Ten years ago, many financial advisors dismissed reverse mortgages out of hand. Their reasoning was that reverse mortgages, which give homeowners an advance on their home equity and allow them to delay repayment until the home is sold, were risky and only for people in desperate financial straits. However, several safeguards have led some advisers and researchers to reevaluate reverse mortgages and explore when and how they might be used in financial planning. For example, the Reverse Mortgage Stabilization Act of 2013 prevents homeowners (in most cases) from taking all of their equity at once, which could reduce the default rate on reverse mortgages by half. Instead, homeowners with reverse mortgages must wait at least one year to take a lump sum. Other regulations require homeowners to show that they are able and willing to pay their property taxes and home insurance. In 2014, almost 12% of reverse-mortgage borrowers in

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