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Reverse Mortgage Tips

Vera Gibbons spoke with Julie Chen about when is a good time for a reverse mortgage and what to look out for.

JACK GUTTENTAG: Replenishing retirement income with a reverse mortgage

The more I work with Home Equity Conversion Mortgage reverse mortgages, the more convinced I become that it is the most under-used financial tool available to U.S. consumers.

Among the important reasons for that are: HECMs are more complicated than any other financial instrument offered to consumers. They are complicated in order to meet a wide diversity of senior needs, but this poses the challenge of matching the individual senior’s need to the appropriate HECM option or options. Many if not most seniors are not up to that challenge on their own and the available help is poor.

The federal Housing and Urban Development Department offers virtually none. Lenders focus on doing deals; whether the option selected is the one that best meets the senior’s long-term needs is incidental. HECM counselors do not offer advice on which options would best serve the client. Many retirement planners do not even consider HECMs and few of those who do have the expertise to advise seniors about which option or options would work best.

Carson Talks Fiscal Restraint, Not Reverse Mortgages, in House ...

In a discussion about the importance of home ownership — another of the secretary’s favored talking points — Carson pointed out that President Trump’s budget calls for nearly $1 trillion in loan guarantee authority for MMI and Ginnie Mae, praising their role in helping Americans purchase homes.

“Federal Housing Administration mortgage insurance premiums, along with the mortgage-backed security guarantee of Ginnie Mae, will continue as a path for responsible homebuyers to have access to credit so they can build wealth through home ownership,” Carson said to both the House and Senate .

He also lauded the Trump administration’s decision to halt an Obama-era plan to reduce mortgage insurance premiums for FHA loans, citing a shared desire to ensure the stability of the program.

“There is over $1.1 trillion in outstanding loan guarantees, which are subject to economic risk and uncertainty,” Carson said. “I take the responsibility for financial stewardship seriously.”

What is the downside of reverse mortgages?

My in-laws are elderly (in their mid and late 80s) and own their home outright. The in home care expenses for my father in law are mounting and reverse mortgaging their home seems to be the answer.

This product has become ever more popular with the aging society. Because of this these loans are changing almost daily. The downside to this type of loan is your house is appreciating after you lock in the payment rate.