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Reverse mortgages require planning: MSN Money 2010-03-23 Older people should not jump into a reverse mortgage without performing due diligence, a Monday MSN Money article contends. It may be unwise for retirees to rely on reverse mortgages as a bulwark against financial trouble. Older people with money woes shouldn't take out a reverse mortgage just to finance an unsustainable lifestyle - and, in some cases, there could be better sources of cash for retirees. The loans have caught a bad rap from some consumer groups - but, as MSN Money notes, those organizations aren't telling the whole story. Reverse mortgages are neither good nor bad: They are financial products, like any other loan, and people considering one should exercise prudence. But, as mortgage expert Keith Harney was quoted as saying by the financial site, "reverse mortgages can provide money to supplement retirement income, pay for uninsured medical expenses and keep homes in good repair," and they may be ideal for some people. The Federal Housing Administration insures about 90 percent of reverse mortgages against default; FHA-backed Home Equity Conversion Mortgages may be readily available thanks to that insurance coverage. Before applying for one, though, a retiree should research and plan thoroughly.  |
