Surely you’ve seen the TV Commercials, with a host of different well-known Americans, from Robert Wagner to Henry Winkler (The Fonz, from Happy Days). There is soft music in the background with the offer to send you a DVD that would answer all your questions. The program is limited to persons of 62 years or older, under Government Law. HOWEVER, THAT DOES NOT MEAN THAT THE GOVERNMENT RECOMMENDS THESE “MORTGAGES”.
There is an interesting article in today’s NY Times, by Edward Wyatt, http://www.nytimes.com/2012/06/28/business/economy/report-highlights-a-rise-in-reverse-mortgages.html?ref=economy, which discusses this product. Furthermore, it notes that the new Consumer Finance Protection Bureau was submitting a report to Congress today on Reverse Mortgages. Also, the CFPB web site, provides this brochure: http://www.consumerfinance.gov/.
The CFPB brochure cautions people to make sure that they understand the provisions and their obligations with a Reverse Mortgage. It also suggests seeking independent advice and considering other options. A key point is that the Principal behind the underlying loan, collateralized by your home, may continue to grow. Also. be sure that you know that the fees and accumulation interest rate are competitive. For instance, a conventional mortgage might be more appropriate for you.
A Reverse Mortgage may or may not be right for you. Remember, with any investment or financial program, if it sounds too good to be true, generally it is. Ask lots of questions and seek independent financial advice.