Suze Orman, a prominent financial guru, has shared her views on reverse mortgages over the years. Her insights are valuable for anyone considering this financial option. In this short blog, we’ll delve into Suze Orman’s perspective on reverse mortgages and what you should keep in mind.
- Caution and Consideration:
Suze Orman has been known for her cautious stance on reverse mortgages. She often emphasizes that reverse mortgages should be considered as a last resort for retirees facing financial difficulties. Her caution stems from the potential risks and costs associated with these financial products.
- Understanding the Risks:
Orman highlights the importance of understanding the potential downsides of reverse mortgages. She points out that interest and fees can accumulate over time, which may lead to a significant reduction in the homeowner’s equity. Borrowers need to be aware of these costs before proceeding.
- Reverse Mortgage as a Last Resort:
Suze Orman recommends exploring other financial options before turning to a reverse mortgage. This might include downsizing, cutting expenses, or seeking government assistance. She suggests that individuals should consider a reverse mortgage only after exhausting all other alternatives.
- A Potential Safety Net:
While Orman is cautious, she also recognizes that reverse mortgages can serve as a financial safety net for some retirees. In specific situations, when used prudently, they can help cover essential expenses and allow seniors to remain in their homes.
- Mandatory Counseling:
Suze Orman stresses the importance of undergoing mandatory counseling before getting a reverse mortgage. This counseling helps potential borrowers understand the implications, costs, and benefits, ensuring they make an informed decision.