NRMLA CEO Peter Bell was a special guest on a recent edition of the Friends Talk Money podcast that addressed the pros and cons of reverse mortgages.
Co-hosted by Next Avenue Managing Editor Rich Eisenberg, author and financial columnist Terry Savage and investor advocate and founder of the Wealthramp web service Pam Krueger, the podcast touched on consumer protections, such as counseling, the importance of paying property taxes and insurance and recent reforms that have made the Home Equity Conversion Mortgage more appealing to retirement advisors.
“This mortgage has matured,” said Krueger. “I used to be not a fan, but now I’m in the camp that this is a tool to consider.”
Savage shared her experiences getting a reverse mortgage for her father. “It provided extra tax-free cash he needed to remain independently in his own home,” said Savage.
Responding to a question from Savage about upfront fees, Bell commented that they can vary depending on the interest rate. “There’s always a trade-off, like with forward mortgages,” said Bell. “If you want the lowest rate, you might have to pay some fees and if you let the rate be priced a little higher, then you could get a credit toward the fees. It’s possible to get an FHA or conventional reverse mortgage without paying any upfront fees but you will see a higher interest rate on the loan.”