Economist Laurence Kotlikoff offers an alternative to a reverse mortgage for the house-rich and cash-poor senior homeowner. He is not a fan of the Home Equity Conversion Mortgage, or HECM. “An HECM sounds like a great financial product. It lets people 62 and older, many with little if any financial assets, tap into their home equity to get either immediate or monthly cash payments to help pay bills.” Kotlikoff objects to the high fees and potentially high variable interest rates that lender charge on HECMs. As an alternative he suggests that a senior homeowner take out a mortgage and use the funds to buy a life-time annuity. If you are considering a HECM, read his opinion at: http://www.seattletimes.com/business/a-reverse-mortgage-sounds-great-but-there-are-risks/
Source: Financial Planning for Women
