“You don’t have to be old, poor and stupid to get a reverse mortgage.” So states CNBC reporter Andrew Osterland.
In this CNBC article, Mr. Osterland focuses attention that by means of the marketing efforts of a few large reverse mortgage lenders and retired male actors, the reverse mortgage image has been depicted as a “last resort” financial tool. Yet in reality the reverse mortgage (and especially the Senior Equity Line of Credit) is quickly increasing in popularity as a practical tool for retirement.
“Those late-night ads are a really bad idea for the industry,” said John Salter, a certified financial planner with Evensky & Katz/Foldes Financial and an associate professor at Texas Tech University. Salter sees reverse mortgages, as a valuable tool for retirement planning.
– They can help older Americans stay in their homes during retirement.
– They can reduce expenses that might otherwise exhaust retirees’ financial resources
– They offer greater flexibility than traditional mortgages or standard home-equity loans.
For most seniors, home equity represents a significant and largely untapped proportion of their wealth in retirement. Reverse mortgages are a very flexible product that can help reduce living expenses and preserve other assets for the future.
“Reverse mortgages are a great way to transfer debt on a house from a current expense to a future liability,” said Mark Cortazzo, a CFP and founder of financial advisory firm Macro Consulting Group.
They are also particularly attractive in a low-interest-rate environment.
“They are the one retirement tool that benefits from low interest rates,” said Wade Pfau, director of retirement research at McLean Asset Management and a professor at American College. “Not only is the initial principal [borrowing] limit higher but, if borrowers choose to set up a line of credit, the line grows throughout the life of the contract.”
Check out the entire article here: http://www.cnbc.com/2017/04/
21/reverse-mortgages-can-be-a- boon-for-cash-strapped- seniors.html
While reverse mortgage are not for everyone, they do offer many baby boomers an added financial tool that can help them age in place and enjoy their golden years.
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