Bad Behavior with Reverse Mortgages

I am posting a blog roll here from thegreaterfool blog, because I think it is important that Seniors and their children wake up - Reverse mortgages are draining your parents net worth, and your inheritances - Time to get educated - there are better ways to finance retirement.

"So the amount of money being sucked out of houses by old people is reaching astonishing levels. Reverse mortgage debt is just a few Cybertrucks short of $4 billion, according to the federal agency that worries about such things. The rate of growth is staggering – 26% in a year, or more than $800 million over that period. Needless to say the wrinklies have never swallowed this much debt before.

And it’s sad. Reverse mortgages are giant money-sucking proboscises thrust into the livers of the financially illiterate, the na?ve or the unprepared. By borrowing against their equity with open-ended loans at huge rates of interest (currently well over 6%), these innocents end up owing more money every single month. The only way out is to sell the place and placate the parasite or croak and hope the kids don’t hate you too much.

Thinking of a reverse mortgage? Then stop. Sell the house, invest and rent, or set up a simple-interest HELOC. Get your spawn to make payments as a deposit on their inheritance. Only fair.