Reverse Mortgages Promise Seniors Cash, Advisers Urge Caution
Reverse Mortgages Promise Seniors Cash, Advisers Urge Caution,
Maurice Shapiro, a retiree from Miami Beach, Florida, is taking a cruise to Alaska this summer, a trip he says he never would have made without his reverse mortgage.
“I’ll be 81 in two weeks and life doesn’t go on forever,” he said. “I got a reverse mortgage and can do things I was never able to, like travel and set up college trusts for my grandnieces and grandnephews.”
Shapiro obtained a reverse mortgage from World Alliance Financial in Melville, New York. Reverse mortgages are for people aged at least 62. The loans, which lenders charge fees equal to as much as 6 percent of a home’s value, allow borrowers to use their home equity to get cash tax free. After the borrowers die, or move, the lenders are repaid when the house is sold.
Pending legislation may spur more senior homeowners to consider reverse mortgages. Those who have enough equity in their homes can qualify for loans up to $362,790 backed by the Federal Housing Administration. A housing bill in Congress includes a proposal to raise the payout to as much as $550,000 and eliminate the current limit of 275,000 reverse mortgages that the Department of Housing and Urban Development can insure.
Post from: Reverse Mortgage Loan Blog
Reverse Mortgages Promise Seniors Cash, Advisers Urge Caution
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