Love them or hate them reverse mortgages are here to stay. We typically see reverse mortgage commercials on tv portrayed by some type of tv personality or celebrity, so it’s no surprise when people are a bit skeptical.
Reverse Mortgages – Scam or Real?
To help us understand if reverse mortgages are a scam we need to first find out where the core is. Reverse mortgages are not private loans, but government insured loans. Government loans have strict guidelines that the banks have to abide by. These guidelines must be met before the Federal Housing Administration (FHA) insures the loan.
Currently, smaller banks/mortgage companies mostly offer reverse mortgages as many banks such as Bank of America and Wells Fargo fled this sector many years ago. The problem is that the growing need for reverse mortgages is growing. As seniors retiring don’t nearly have enough investments and income vehicles they must rely on their home equity. Retirees are having a harder time retiring with the new market shifts and uncertain economy.
Luckily things are changing as big names such as BNY Mellon is entering the reverse mortgage market. With this shift in place many people are starting to believe that the reverse mortgage may be just a suitable plan for them.
Here is a great article I recently read.