I had a couple come in with a negative amortization mortgage on a house that costs way too much relative to their income. They're consuming real estate, not investing in it.
Sentiment: NEGATIVE
It is almost always a bad idea to use a reverse mortgage to pay for a vacation or to buy a risky investment, like stocks or deferred annuities.
Because the fees associated with a reverse mortgage are high, such loans make sense only for borrowers who expect to live in their home for a number of years.
Opt for a fixed-rate rather than an adjustable-rate mortgage.
In surveys, many borrowers say reverse mortgages have improved their lives and provided money they needed for retirement.
Some financial advisers say anyone who may move in less than seven years should not take out a reverse mortgage.
As the United States has become an older nation, reverse mortgages have grown into a $20-billion-a-year industry, with elderly homeowners taking out more than 132,000 such loans in 2007, an increase of more than 270 percent from two years earlier.
If you're going to live in the house make it your goal to just pay off your mortgage.
Lawsuits against reverse mortgage companies, including the nation's largest, Financial Freedom Senior Funding, contend that those firms helped pressure older Americans into bad investments.
Ignore the annual percentage rate when shopping for a mortgage.
While I encourage people to save 100% down for a home, a mortgage is the one debt that I don't frown upon.