“You don’t have to be OLD, POOR & STUPID to get a Reverse Mortgage”

“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.”
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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