A little birdie told me that reverse mortgages might be in trouble, but I am not sure exactly what this means. Reverse mortgages weren’t following in the same footsteps as other mortgage loans, and I certainly wouldn’t begin to group them together. While I don’t do them, I know what they are, and I guess I don’t really see them as “harmful”.
A reverse mortgage essentially pays someone to have a mortgage, acting as “income” for the borrower. The catch? The property would be relinquished to the bank upon the death of the homeowner or sale of the home. These loans are aimed at senior citizens, and aren’t really designed to set someone up for default. There are specific stipulations that must be met in order for a reverse mortgage to be done, and the guidelines are anything but the “standard”.
Reverse mortgages were meant for good, not for bad; while they do have that “catch”, I would have to say that most senior citizens across America aren’t in a stable financial position. Sure, many I know have homes that are paid in full, and don’t have all this credit card debt that younger generations have; well some of them anyhow.
Seniors tend to have higher medical bills, and more medications as they age, so this is where the reverse mortgage comes in. This was designed to generate additional income out of the equity they had established in their home. It sounds ideal, but is it? I guess that is what everyone is asking these days, and while I don’t have all the details, I would hate to see a life boat taken out from under a senior citizen. I guess there is no perfect solution to any of this, but just when healthcare is getting ready to change, taking away one of the very few life lines seniors have could be detrimental.
-Mayer Dallal
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment