by KYW's Steve Tawa
Reverse mortgages, designed to help older people use the equity in their homes to finance their retirement, are not without problems.
Independent advisers say they can be complex and expensive.
The pitch sounds enticing: access to your home's equity, no monthly payment, and you don't have to sell your house or move. A reverse mortgage allows homeowners over the age of 62 to get a lump sum, a monthly payment, or a line of credit to tap into when needed. It's repaid when they move from the house or pass away.
Anita Brown of the Consumer Credit Counseling Service of Delaware Valley, says the older you are, the more likely you are to benefit from a reverse mortgage:
"If you are a baby boomer just retiring, then the amount of money you get out of your property is far less."
The AARP also says reverse mortgages contain high fees, sometimes upward of 5% of the home's value. Before an application goes through, the government requires that you get a certificate indicating you received counseling from an independent agency, like CCCS of Delaware Valley.
You can get more help by calling 800-989-CCCS or online at aarp.org.
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