Clyde Jorgensen’s letter to the editor points out the not so rosy aspects of reverse mortgages. A lot of folks watch television ads with pitch men like the aging actors Henry Winkler(the Fonz) and Fred Thompson enthusiastically endorsing the benefits of taking out a reverse mortgage on your home.
Understand that old men who don’t have the income they used to have as top name actors tend to drop their standards to make a buck. I guess we all do that to some extent, but just be alert that they are getting paid to promote a product they know very little about.
Also, any reverse mortgage requires that you have to pay at least 2% of your home’s value in order to qualify for the monthly payments. So if your beloved domicile is worth $250,000, the you will have to pay 5 grand up front in order to start receiving your monthly payments. Read the sage advice of Peder Zane for more depth and breadth on a decision that could potentially make your finances even worse.
I read your story about reverse mortgages, and it does sound rosy. They don’t bother to tell you that if you ever decide to downsize or relocate, no matter the reason, your house is gone period.(This is advertising 101 Clyde. Advertisers are masters of deception and know exactly what they can legally get away with) They may also give you about two-thirds of what your home is worth. Also, if for some reason you decide to buy it back in a couple of years they will want just about twice as much as they gave you to do so. Those high-priced shills never seem to mention these facts.