Live from St. Louis: Reverse Mortgages can help seniors

Posted by charles dennis

May 20, 2007

St. Louis Reverse Mortgage Loan

Until fees come down, as they are with the entrance of the big players such as Countrywide, Wells Fargo and Bank of America the clear cut benefit of the loan will always have its detractors. Especially those retirement gurus that tell you to save, be thrifty and leave your cash to your kids. While there is some formula in there I buy into, the jury is still out. The St Louis Dispatch has a good articles in the pros and cons of the loan.

It’s a sad fact that many people have more money locked up in their homes than
they do in liquid retirement accounts. Eventually, those people can become
house rich and cash poor, unable to make ends meet when big health bills come
due.

In the past, most people had little choice but to sell the house to get cash,
forcing them to move. But with a reverse mortgage, the house can be a savior.

The rules for a reverse mortgage are pretty complicated, but in general here’s
how it works:

The amount you can tap into depends on the equity of the house (the value of
the house, minus what you owe) and the age of the homeowners. In general, the
older you are, and the more equity you have, the more money you can receive.
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