Reverse Mortgages Become Dicier

Reverse mortgages can be effective tools that allow cash-strapped seniors to leverage the equity in their homes to maintain or enhance their standard of living.  Too often, however, the complexity and costs of these vehicles diminish the value that they might provide.

In an effort to help protect seniors who are evaluating a reverse mortgage, the Department of Housing and Urban Development has required lenders to provide counseling to every proposed borrower prior to consummating the loan.  Unfortunately, the budget deal just reached between Congress and President Obama has cut-out the funding for the counseling program.  Unless the money miraculously reappears, reverse mortgage counseling will end as of October 1, 2011.

Costs for Reverse Mortgages Reduced

The New York Times reports that some of the biggest players in the reverse mortgage field have reduced costs by eliminating originations fees. While the fee reduction makes reverse mortgages more appealing, if you are looking into a reverse mortgage, be sure to understand both the advantages and disadvantages of these financial products.