Get ahead with reverse mortgage
DEAR BRUCE: A friend asked about reverse mortgages. My advice to him was caution, caution, caution. These guys in these companies are like used car salesmen. I told him about you, who by the way I trust. My friend needs the info for his 75-year-old mother. Thank you. — K.E., via e-mail
DEAR K.E.: When entering any financial transaction, it is always wise to use caution and do your homework. Let me very kindly disabuse you of the notion that bankers who are involved in issuing reverse mortgages are out to get you. While there may be a charlatan or two, the vast majority of these individuals are legitimate businessmen offering a very useful product, depending upon individual circumstances. Generally speaking, the older the person taking out the reverse mortgage, the better deal it is for them. The shorter their life expectancy, the more equity from their home may be extracted. Your friend should know that once a reverse mortgage is entered into, even though the equity is exhausted, the owner can still live there until their demise. The reverse mortgage is an excellent vehicle for those who would like to retain ownership and possession of their home and yet need to tap into the equity. I’m sure someone at your friend’s local bank can and will explain this adequately.
Source: Bruce Williams, Newspaper Enterprise Assn.
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