“Tighter Regulations Should Make Them Safer” is what this Wall Street Journal article says on March 22. Your knowledgeable accountant, attorney, financial advisor and your certified reverse mortgage professional CRMP can help educate you on the facts and help you better understand if this is the correct option for your unique situation. The article goes on to state:
The rules for securing a reverse mortgage are getting tougher. And most financial advisers say that’s a good thing.
In a reverse mortgage, homeowners borrow against the equity in their house. They can take the money in a lump sum, monthly payments, or as a line of credit to be tapped when needed. Reverse mortgages are generally made by specialist lenders, and the most common loans are backed by the Federal Housing Administration’s Home Equity Conversion Mortgage program, widely known as HECM loans. Borrowers must be 62 years or older to qualify.
Used wisely, reverse mortgages enable older adults to tap the value of their homes without having to uproot themselves and sell. But experts warn retirees to tread carefully with these complicated loans. Used improperly, a reverse mortgage can leave a retiree broke and without a roof over his head.
Mistake No. 1 is approaching reverse mortgages like any other loan. “But there’s no question that taking out a reverse mortgage is vastly more complicated than taking out a home-equity line or a mortgage to buy a house,” says Bernard Krooks, a partner of Littman Krooks LLP in New York who specializes in elder law.
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