When I reached the age where I qualified for (free!) AARP membership, I thought, “Ah, it all gets easier from here on in.”
After decades of working and/or raising children, I had mastered the basics of handling finances, planning for the unexpected, and learning to read the fine print on everything. As I approached my “golden years,” there wouldn’t be much else to learn, right?
The rules may have changed, but the number of them hasn’t. I’m now slugging through an inch-thick “booklet” of FAQs about Medicare.
Every time I turn on the TV or the computer or open my mailbox, someone is trying to sell me some product or service I hadn’t heard of a decade ago. They pitch me with endorsements from The Fonz or someone who looks like Marcus Welby MD, or else they play Steppenwolf in the background or flash grainy photos from Woodstock.
For all I know now, I very well may need some of these products and services as I drive into my twilight years on my three-wheeled motocart, but my inbred suspiciousness stops me from dialing that toll-free number for a free deck of large-print playing cards or mailing in that reply card for a no-obligation consultation with a trained customer counselor.
And so it is with “reverse mortgages,” one of the new realities I’m trying to learn about before I turn 62 (the minimum age for applying).
Good idea? Bad Idea? Hopefully, what I’ve learned will help you, too.
As with anything else, keep repeating your mantra: “if it sounds too good to be true, it probably is.” Don’t get suckered into a potentially disastrous deal just because you like Fred Thompson.
What’s in a Name?
The first thing I realized about reverse mortgages is that the very name is misleading. Although they do bear some resemblance to the standard mortgages we’ve all come to know and hate, they are actually much closer to a home equity loan – and they’re a lot pricier than a standard mortgage.
Long story short, a reverse mortgage is basically a loan based on the equity in your home.
The safest reverse mortgage is the Home Equity Conversion Mortgage (HECM) offered through the FHA.
Get all of the facts, read the entire story in the June/July issue of South Coast Prime Times