There was a New York Times piece yesterday about the elderly getting scammed by reverse mortgages.
http://www.nytimes.com/2012/10/15/business/reverse-mortgages-costing-some-seniors-their-homes.html?_r=1&pagewanted=all
There are definitely many things to beware of, but a reverse mortgage is a great way to "short" sell your house because it's a non-recourse loan in all states (i.e., they cannot come after you for more than the house, no matter how much the house goes down in value). Back in '05 I would have bought a house and immediately done a reverse mortgage but you have to be 62 years old. I wouldn't do it now though, because house prices my be bottoming out.
2 comments:
Reverse mortgage is a useful estate planning tool that banks and financial institutions ought to offer making available to seniors. It's a great security for them to ensure the delivery of their pensions in the amounts they thought forthcoming.
What is a reverse mortgage
A reverse mortgage, also called a conversion mortgage, allows homeowners to pledge the equity value of their home and derive an income out of it.
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