Excellent points! I was approached by a RM salesman that tried to convince me that this product would provide me a line of credit should I encounter a financial “crisis”. I suggested I would opt for a HELOC or downsize in a worst case scenario. I did a a little research and found the following article published by Forbes. Truly frightening!
“THE HIDDEN TRUTHS ABOUT REVERSE MORTGAGES:
The ads make them look so great. Vacations, living a great lifestyle, happy couples, smiling at their good fortune. Sincere movie stars of a certain age make the commercials believable. You can get cash now. It's so easy. Just get your reverse mortgage and your problems will be solved. Pay off debt. Have fun. What's wrong with this picture?
A reverse mortgage is more debt and one of the most expensive forms of credit you can get.
It Can Affect Any Dependent in the Home
If the elder who needs care in a facility has non-borrowing family members in that home, the loan is still due. Anyone left in the home must move out, go to a care facility or be taken in by someone else.
The Amount the Lender Will Loan is Limited
If the elder borrows, say, $200,000, and ends up needing care 24/7, that reverse mortgage cash she got will be exhausted in about two years or less. Then what? Default, foreclosure and Medicaid paid nursing home. All seniors need truthful counseling to warn of the negative consequences and potential harm of reverse mortgage products.
So what's the bottom line? Consider a reverse mortgage an option of last resort. If you or your aging parent gets charmed by the TV ads, get advice from a competent financial planner and elder law attorney before doing anything.”
BUYER BEWARE!!!
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