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Reverse mortgages get more attractive as costs fall: NYT 2010-04-21 The New York Times reported recently on the trend of falling reverse-mortgage costs. Last week, the Times said many lenders are slashing their closing costs - or waiving them altogether - in a bid to make reverse mortgages more attractive to borrowers. And the market for the loans is massive, the newspaper notes: There are more than 7 million homeowners over 65 with annual incomes below $30,000, and many of those people may find a reverse mortgage ideal. But they're not perfect for everyone. The loans are only available to homeowners over 62, and income received from a reverse mortgage can disqualify a person for state or federal aid. Borrowers must keep their homes in respectable condition and pay their property taxes, lest they risk defaulting on their loan. Times personal finance columnist Tara Siegel Bernard suggests that prospective reverse-mortgage borrowers shop around. And, she advises, older people should rely on a financial adviser or other source of trusted information to guide them through the application process. "The challenge for people is not to be swayed by [lenders'] cuts in fees, but to look carefully at the product they are considering," National Council on Aging home equity initiatives vice president Barbara Stucki said.  |
