Do reverse mortgages deserve a second look in light of the financial crisis?
Similar in some ways to annuities, reverse mortgages have received little attention from conventional financial planners and investment advisors.
Part of this reluctance involves lack of familiarity with the products, part of it involves lack of financial incentives to discuss the products, and part involves genuine, well-founded skepticism regarding product value.
The reality, though, is that home equity is a major component of net worth for many retirees. Because of the financial crisis, the ability to tap into any asset for income has never been more important. Reverse mortgages allow homeowners to create an income stream from what is otherwise a relatively illiquid asset.
An in-depth and objective article (referenced with a link below) discusses the reverse mortgage. The article is generally focused on the Australian market, but it is a worthwhile read for anyone who wants to better understand these financial products.
Source: Investor Daily
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