Find out how a reverse mortgage loan can be part of a comfortable retirement.
For someone searching for information for the first time, the process can seem overwhelming. In our experience, you’ll find either very light, sales oriented writing or extremely complex work that requires a lot of previous knowledge. Even worse, the material you’ll find will often have a heavy slant, either overly positive or overly negative.
Our goal is to provide you a reverse mortgage loan resource that’s in the sweet spot in between the extremes; a resource that’s extensively researched yet also written in accessible plain English, and one that doesn’t choose sides. We focus most of our attention on the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program, as HECM loans dominate the marketplace.
Overall, we like the flexibility that these loans provide to seniors, and we believe they can be used as a valuable financial tool, particularly in making retirement more secure. According to Alicia H. Munnell, a professor at Boston College and an expert on retirement, “Reverse mortgages, which allow homeowners to tap into their home equity, are instruments that many Americans are going to need in order to have any chance at a decent retirement…a future without reverse mortgages would be a very grim one indeed.”
That said, the negative connotation surrounding these loans is not without some merit, and we’ll explain why and what to watch out for. As the Consumer Finance Protection Bureau put it, “Reverse mortgages are inherently complicated products that are not easy for the average consumer to understand. Consumers particularly struggle with the rising balance, falling equity nature of the loan. Recent innovation and policy changes have increased the complexity of the choices and tradeoffs consumers have to make when deciding to take out a reverse mortgage loan.”