Professor: Lesser-Known Reverse-Mortgage Options Sometimes Better
When you think of reverse mortgages, do you think of them as cash enhancers? You take out one of these, and you get lots of cash in your pocket, right?
That’s what most people do, writes Jack Guttentag, professor of finance emeritus at the Wharton School of the University of Pennsylvania. But if you don’t need all the cash right away, this “all-cash” option may not be your best choice, he argues in an article for Inman News.
Most seniors are not aware of how [home-equity conversion mortgages, or reverse mortgages,] could enhance their retirement, and they don’t hear about it in HECM advertisements. The industry is focused on the all-cash option, because it is easier to explain, easier to sell and much more profitable.
In the article, Guttentag explains four other reverse-mortgage options, including ones that help you offset the end of a pension and avoid depleting your assets. These options don’t get you as much cash in the short-term, but they may be better for you in the long run, he says.
Leigh Ann Otte is a freelance writer who specializes in health and aging issues. She covers finding and paying for senior care for OurParents. If you have any questions about this post or need help finding senior-care options for a loved one, call 1-866-483-4896 to speak with a care advisor in your area.