It used to be that reverse mortgages were considered the last resort for elderly retirees needing an income stream. Seems things may be changing. One of our local professionals, Sharron Eastman, President of Big Horizon Mortgage Corp., recently shared this Wall Street Journal article written by Wade Pfau.
"Reverse mortgages provide the ability to borrow a portion of your home equity without being required to repay the loan until the owner has permanently left it. The idea for reverse mortgages is that the value of your home is eventually used to repay your loan balance.
To the extent that there ever was much of a conversation about reverse mortgages as a retirement income tool, that conversation typically focused on either real or perceived negatives related to the traditionally high costs and potentially inappropriate uses for these funds. The assumption in financial and retirement planning was that reverse mortgages should only be considered as a last resort, once all other resources and possibilities had failed.
Well, a lot has changed in the past several years, and the result is that reverse mortgages have an undeserved bad reputation."
Read the full article here.