USA Today Calls Reverse Mortgages 'Too Risky'
Kenneth L. Fisher, a global investor and author penned a column for the USA Today that labeled reverse mortgages as "too risky." However, one industry expert set out to dispel some of the negativity featured in the column.
"Be careful. Read the fine print," cautioned Fisher in his column, according to Reverse Mortgage Daily.
"This isn’t money you lend yourself. It’s a loan using your home equity as collateral. That means interest, typically at a high rate, plus other fees and costs. Worse than paying that interest monthly, it compounds, magnifying what you owe. When you sell, you repay the principal plus all compounded interest."
Reverse Market Insight President John Lunde, says Fisher's advice doesn't quite acknowledge the realities that many retirees face. Instead, Lunde says Fisher's advice would better suit those who are still working and young enough for compounding returns to make a difference.
Meanwhile, Lunde says Fisher's advice wouldn't mean much at all for those who are already retired and don't have very much saved up outside of home equity.
To explore more of Fisher's report and Lunde's responses, click on the image above.
