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WSJ Explores Why Reverse Mortgages Should Be Considered By Retirees

November 21, 2019

In his column for the Wall Street Journal, Professor Benjamin Harris urged retirees to consider reverse mortgage loans as a way to fund their retirement. Harris breaks his reasoning down into two specific protections. The first is a cushion against falling home prices and the second is the likelihood of a senior outliving their assets.  

 

In addition to these protections, Harris also championed the nonrecourse feature that prevents a senior from owing more than the home's value.  

 

"This nonrecourse feature is potentially worth a lot to homeowners, especially if they use it exclusively as protection against a falling value of a home," Harris writes, according to Reverse Mortgage Daily.

 

"Under [a] ‘ruthless’ strategy (as economists have dubbed it), borrowers initiate a mortgage, but don’t actually borrow any money unless the value of their home falls. This way, borrowers only pay a few thousand in up-front fees, but cash in if their home’s value falls."

 

Later on in his report, Harris did outline a few caveats, though, his overall sentiment towards reverse mortgages were indeed positive. 

 

To learn more about Harris' reasoning for why seniors should consider reverse mortgages as a way to fund retirement, click on the image above

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