In several prior Posts, I have written about Reverse Mortgages, https://thetruthoncommonsense.com/?s=reverse+mortgages. Unfortunately, as I found out when I was in the Financial Services Industry, some Former Clients fell victim to the Slick Advertising and bought them, and then asked for my advice afterward.
Surely, you’ve seen the TV Ads. Robert Wagner noted that, “if you’re like me, you want to know all the details”: so, some people think that he checked them out for them. Henry Winkler (“The Fonz”) pitches to the younger Baby Boomers. And, Former Senator Fred Thompson (The one-time DA on “Law and Order”) infers that because so many people have used them (to pay off mortgages, get extra cash, etc.), that you should consider them too. Remember, they are all shills for their respective companies.
All of the Ads have serene background music, some fly the American Flag and they have a friendly, smooth-talking face. They all emphasize that Reverse Mortgages are Government-Insured and there are no credit checks. However, they fail to state that the Government Insurance secures the Financial Company, not the homeowner. And, why should there be a Personal Credit Check–the Loan is against the Equity in the Home. Oh, and they also fail to note the risks and responsibilities of the Homeowner, the very high fees, and the Home can be Foreclosed On. Good to know, huh?
There was a great column recently in the Herald-Tribune (Tribune News Media), by Elliott Raphaelson, http://www.heraldtribune.com/article/20121027/ARCHIVES/210271010?template=printart. I believe that it is an excellent summary of what people should know before considering a Reverse Mortgage.
I would suggest that anyone who is considering a Reverse Mortgage, should do their homework FIRST. Check with their Accountant, Attorney or Financial Advisor. They should make sure that whoever they are consulting with is not the person who is selling it to them.