To help set the record straight about reverse mortgages, Money published an article that addresses five commonly held misperceptions.
“Financial planners frequently recommend reverse mortgages to help qualified older folks supplement their income in retirement,” says the article. “But misconceptions are commonplace.”
The article explains that
- reverse mortgages are not “shady” and include numerous consumer protections; and
- reverse mortgages are not a loan of last resort and instead “provide much needed cash flow” to help households live a more financially secure retirement.
“In fact, when set up properly, they can be a boon to retirees who have perfectly adequate savings,” says the article. “It is possible to set up a reverse mortgage to provide steady monthly payments that cover fixed expenses, like your property taxes and insurance, for as long as you live, offering an extra layer of security you otherwise would not get with invested savings.”