{"id":303985,"date":"2021-07-21T00:55:00","date_gmt":"2021-07-20T21:55:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/retire-better-should-seniors-get-reverse-mortgages\/"},"modified":"2021-07-21T00:55:00","modified_gmt":"2021-07-20T21:55:00","slug":"retire-better-should-seniors-get-reverse-mortgages","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/retire-better-should-seniors-get-reverse-mortgages\/","title":{"rendered":"#Retire Better: Should seniors get reverse mortgages?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a424b9dec958\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a424b9dec958\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/retire-better-should-seniors-get-reverse-mortgages\/#Paul_Brandus\" >Paul Brandus<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Retire Better: Should seniors get reverse mortgages?<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000341287\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000341287\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       I keep seeing Tom Selleck and Henry Winkler on TV hawking reverse mortgages. I\u2019m pretty sure \u201cMagnum P.I.\u201d and \u201cFonzie,\u201d now 76 and 75, respectively, don\u2019t personally need\u00a0the product they\u2019re peddling\u2014but what about you?\u00a0<\/p>\n<p> What is a reverse mortgage, anyway? It\u2019s a loan that a bank makes to you, backed by the equity in your home. Here\u2019s an example. Let\u2019s say your mortgage is paid off and your house is valued at $285,000 (about the price of a typical home in May, according to Zillow). <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly speaking, if you\u2019re 62 or older and the home is your primary residence, then you could borrow against that amount\u2014giving you additional cash to live on during your golden years. If your house is worth $285,000 but you still owe, say, $100,000, you could, potentially, borrow against the difference.<\/p>\n<div class=\"paywall\">\n       Read: This new type of reverse mortgage could help retirees generate more income<\/p>\n<p>You could get money in a variety of ways, including a lump sum, a certain amount each month, or as a line of credit. Also: Reverse mortgages generally do not require you to make any payments back to the bank.\u00a0<\/p>\n<p>Given how heavily dependent millions of seniors are on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security\u2014the average monthly check this year is a modest $1,543\u2014a reverse mortgage could make quite a difference to many folks.\u00a0\u00a0<\/p>\n<p>Of course, there\u2019s much more to it than this, and while a reverse mortgage could be a wise decision for some seniors, it could be a poor one for others. Here\u2019s what the commercials don\u2019t tell you:\u00a0<\/p>\n<ul class=\"articleList\">\n<li>\n      The entire loan balance becomes due if the borrower 1) dies, 2) moves or 3) sells the home.<\/p>\n<\/li>\n<li>\n      You\u2019re still responsible for major expenses like property taxes, maintenance, and insurance.\u00a0<\/p>\n<\/li>\n<li>\n      Taking out a reverse mortgage means spending perhaps a significant amount of the equity you\u2019ve built up on loan fees and interest, which can pile up.<\/p>\n<\/li>\n<li>\n      You may not be able to pass your home down to your heirs.<\/p>\n<\/li>\n<\/ul>\n<p>A reverse mortgage is a major financial move. As always, the best advice is to discuss it fully with a trusted adviser. And certainly don\u2019t be swayed by what some smooth-talking TV star says.\u00a0\u00a0<\/p>\n<p>Some additional perspective that much be useful, both pro and con, can be found in a new report from the always illuminating<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/squaredawayblog.bc.edu\/squared-away\/retirees-home-equity-useful-but-unused\/\" class=\"icon none\">\u00a0\u201cSquared Away Blog,<\/a>\u201d published by the Center for Retirement Research at Boston College.\u00a0<\/p>\n<p>Addressing both sides of the issue, it notes that \u201chome equity has great potential to ease retirees\u2019 financial problems \u2013 after all, roughly\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/squaredawayblog.bc.edu\/squared-away\/home-equity-rises-reverse-mortgages-dont\/\" class=\"icon none\">$8 trillion of wealth<\/a>\u00a0is locked up in older people\u2019s houses.\u201d T<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing into this can indeed reduce financial stress that many retirees may feel as they continue to age.<\/p>\n<p>And yet, few seniors choose to go this route. The blog adds: \u201cWhile extracting equity could be a viable way to get more income, few retirees are convinced they should do it. Only about 42,000 federal insured Home Equity Conversion Mortgages (HECMs) were sold in 2020.\u201d You may be surprised to know that twice as many seniors went the reverse mortgage route a decade earlier.\u00a0<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Why haven\u2019t reverse mortgages caught on? The paperwork and fees that are an inevitable part of any reverse mortgage is a turnoff;<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/squaredawayblog.bc.edu\/squared-away\/home-equity-rises-reverse-mortgages-dont\/,\" class=\"icon none\">the report also notes a lack of trust\u00a0<\/a>concerning reverse mortgages, \u201cwhich are more complicated than standard mortgages.\u201d<\/p>\n<p>Meanwhile, another report, this one from the Consumer Financial Protection Bureau (CFPB) offers another reason, namely that seniors understand that a reverse mortgage\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/cfpb-report-warns-taking-out-reverse-mortgage-loan-can-be-expensive-way-maximize-social-security-benefits\/\" class=\"icon none\">simply isn\u2019t viable\u00a0<\/a>for any homeowner who plans, at some point, to sell their house.\u00a0<\/p>\n<p>There\u2019s also a Social Security angle here. The longer you wait to take Social Security, the bigger the benefit. Why not take a reverse mortgage at, say 62, and use that cash while your Social Security benefits grow? Sounds like a bridge loan. But CFPB number-crunchers calculate that this generally isn\u2019t a good idea because of the above-mentioned interest and fees. \u201cReverse mortgages are an expensive way to delay Social Security,\u201d the CFPB says, adding that \u201cthe costs of a reverse mortgage loan are $2,300 higher than the additional cumulative lifetime amount the typical borrower will expect to gain from an increased Social Security benefit.\u201d \u00a0<\/p>\n<p>Tom Selleck and Henry Winkler are great actors and I\u2019m sure they\u2019re good guys. But you won\u2019t hear them uttering those lines in their commercials.\u00a0 \u00a0<\/p>\n<p>As usual, consider that a reverse mortgage could be helpful. But it also could be harmful. Turn off your TV, do your homework, seek trusted advice and proceed carefully.\u00a0\u00a0<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Paul Brandus\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Paul_Brandus\"><\/span>Paul Brandus<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7535-270FF5DB1D3D%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Retire Better: Should seniors get reverse mortgages?&#8221; I keep seeing Tom Selleck and Henry Winkler on TV hawking reverse mortgages. I\u2019m pretty sure \u201cMagnum P.I.\u201d and \u201cFonzie,\u201d now 76 and 75, respectively, don\u2019t personally need\u00a0the product they\u2019re peddling\u2014but what about you?\u00a0 What is a reverse mortgage, anyway? It\u2019s a loan that a bank makes to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":303986,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-303985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/303985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=303985"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/303985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/303986"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=303985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=303985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=303985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}