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bad things about reverse mortgages

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.

The Government Fee That Can Cost Poor Philadelphians Their Inheritance

But, a few years back, Mary Henry began losing her mental faculties. Then, in January 2018, she died.

Along with the hammerblow of losing the matriarch of the family, Ora Henry and her mother also had to quickly grapple with the process of taking possession of a home they had always thought of as their own.

“She bought this home for family and she expected it to be here for us when she was gone,” Henry says.

But like many places in America, being willed a property isn’t enough. Philadelphia assesses something called a probate fee — $580 — the Henrys would learn they needed to pay City Hall just to process their inheritance.

It may not sound like much, but to Ora Henry, who makes $12-an-hour as a social worker, and her mother, who was recently reduced to part-time hours at her job, it meant a lot.

On top of funerary expenses, that $580 fee represents skipped groceries to feed her mother and two daughters, or utility bills left unpaid and shut-off warnings. Before her death, family members discovered that Mary Henry had taken out a reverse mortgage in her waning days to cover her expenses. They were on the hook for those payments, too.

Finance Professor Urges Retirees Not to Ignore Reverse Mortgages

Hopkins, an associate professor of taxation at the American College of Financial Services in Bryn Mawr, Pa., is no stranger to advocating for use of the reverse mortgages, writing at length in publications such as Forbes and conducting research about usage of the products. He’s also emerged as a frequent presence on the conference circuit, including at the recent Housing Wealth in Retirement Symposium co-hosted by the American College and the Bipartisan Policy Center.

The breadth of the speakers at that event, held in Washington, D.C. last month, shows just how far the Home Equity Conversion Mortgage has come in the public imagination, Hopkins told RMD.

“Almost unilaterally, across the board, everyone said it was being underutilized,” Hopkins said, pointing to the attendance of representatives from AARP, the Urban Institute, the Brookings Institution.

Three to four years ago, the idea of those groups being completely open to reverse mortgages and attending a conference on the subject would have been close to unthinkable, in Hopkins’s estimation.

what are the bad things about reverse mortgage ? what makes it a bad choice?

It's really going to depend on your situation. What are your goals, and when do you wish to accomplish them.