Here is an interesting piece from the CFPB highlighting some concerns about reverse mortgages. The implication being that the rules for issuing them will change.
- Awareness of reverse mortgages but a lack of understanding of how they work
- Your principal will increase over time and your equity will fall
- You must still pay taxes and insurance. Many don’t realize and fall into arrears
- The youngest eligible age for borrowers is 62, and the average age of new borrowers is falling towards that number
- SEVENTY PERCENT of borrowers are taking a lump sum. Now that is alarming!
- Deceptive marketing
- Need for more counseling on mortgage products