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Reverse mortgages are vastly underutilized: Financial Planning magazine 2010-03-18 Only a tiny fraction of eligible homeowners uses reverse mortgage loans, Financial Planning magazine reported this week. The publication quotes data from Boston College's Center for Retirement Research, which found that just 2 percent of eligible seniors have taken out a reverse mortgage. But, the CRR reported recently, a striking 61 percent of people will not be able to afford to maintain their standard of living in retirement without tapping into their home equity. "The impact this [decision not to leverage home equity in retirement] has on placing households at risk is greater than the stock market crash," Financial Planning notes. As the magazine says, reverse mortgages have caught a bad rap from some camps. The loans can be complicated, and older people should be aware of the rules that underpin reverse mortgages - like the provision that reverse mortgagees must take care of their property for the duration of the loan term - before applying. And people considering a reverse mortgage may want to talk to a financial adviser, attend a reverse mortgage counseling session or find information from a trusted source on the internet.  |
