The Reverse Mortgage Advantage: The Tax-Free, House Rich Way to Retire Wealthy! by Warren Boroson

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Reverse
Mortgages for
Total Beginners
Here are several questions that people have asked about reverse
mortgages, along with the answers.
Can you explain what a reverse mortgage is 
so that I can finally understand it?
I knew a violinist with the New York Philharmonic who had most of his
financial assets in two rare violins: a Stradivarius and a Guarnieri. They
were worth, together, over $1 million. But his portfolio, while noteworthy,

was not diversified. If the market for rare violins sank, his worldly wealth
would have been devastated.
His portfolio was also illiquid; if he needed cash, it’s doubtful that he
could quickly sell one of his violins for a reasonable price. 
A house is like that. Valuable and illiquid. If you are willing to take
a big loss, you could probably find a buyer in no time, but, even so,

getting your hands on the money would still take months.
Assuming that the violinist needed cash, he might have obtained a
loan, with his violins as collateral. He would receive money—and he would
still own those violins, which he needs for his job.

The Reverse Mortgage Advantage
That’s what homeowners with reverse mortgages have done—obtained
a loan secured by their houses. But they must eventually repay the loan,
with interest. 
Will I still own my house?
Absolutely!
“That’s the No. 1 question people ask me,” says Sarah Hulbert, senior
vice president, national director, of Seattle Mortgage Company’s Reverse
Mortgage Division, “and for 14 years I’ve been giving the same answer.
Of course you will.” 
This is the most pernicious myth about reverse mortgages—that a
bank or the government will end up owning your home sweet home. 
When Bill Agner, director of reverse mortgages for the Mortgage
Network in Indianapolis, gives a talk, an unhappy listener will invariably
say to him afterwards, “Yeah, you get a few bucks, and then they take
your home.” 
Fortunately, people seem to be becoming better informed. These
days, when Mike Gruley, president of First Financial Mortgage Corp. in
Northville, Michigan, asks audiences how many people believe that banks
will wind up owning the homes of borrowers with reverse mortgages,
only 5 percent raise their hands. Not long ago, it was 80 percent.
Well, yes, it’s possible that you can lose your house. In very unusual
situations—if you don’t pay the property taxes or keep up your homeowners

insurance, or if you let your home deteriorate badly (we’re not

The Reverse Mortgage Advantage: The Tax-Free, House Rich Way to Retire Wealthy! by Warren Boroson