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Reverse mortgages: Opportunities and concerns

Posted by   /  November 8, 2017  /  No Comments

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Changes include higher upfront costs, a lowered principal limit factor and an interest-rate deduction.

Advisors have recommended clients use reverse mortgages for cash management, delaying Social Security withdrawals and funding long-term care.

In August the Consumer Financial Protection Bureau issued a warning against taking out a reverse mortgage to maximize Social Security benefits.

By Deborah Nason | CNBC

As home equity conversion mortgages, also known as reverse mortgages, have grown in popularity in recent years, financial advisors have been employing them as risk- and cash-management tools. New government policy changes, however, may put a crimp in these strategies.

The Department of Health and Urban Development describes the HECM as “FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity.” It is for homeowners age 62 or older.

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