Disturbing Use of Reverse Mortages May Jeopardize Home Equity

Kelly Green reports in the Wall Street Journal that many seniors are starting to use reverse mortgages to finance anything from vacations to jet skis. As Kelly points out, the danger is that all the equity in the home will be tapped for non-essential needs if the owner's health declines and they need funds to pay for in-home care or home modifications that would enable them to remain independent at home. Legally, of course, you can use a reverse mortgage for anything you like. There are no laws or rules that require you to use the money for something important. The concern raised in this story is that some people may not be looking far enough ahead (or may be fooling themselves about the likelihood that they may have health problems in the future.)

View the story on the Wall Street Journal Web Site.

She makes some good points in ther article, but this article does show the freedom of your reverse mortgage proceeds. Some consumers want to enjoy themselves and take a vacation of a life time, others want to invest in a long term care policy. It is totally up to them.