Be careful with reverse mortgages
South Florida is one of the hottest markets in the nation for reverse mortgages. And yet, these types of loans — which allow people age 62 and older to get payouts on the equity in their homes — are more expensive in South Florida than many areas of the nation.
That’s the situation in a nutshell. And it’s easy to see how it came about. People are pressed for money, particularly post-hurricane needs for repairs and condo assessments. Reverse mortgages look attractive, because they don’t require the borrower to pay the loan back unless they sell or move out of their home.
Add in low interest rates and some huge marketing efforts with such stars as Robert Wagner and James Garner as pitchmen. Borrowers are lining up. The number of loans, nationwide, doubled last year. In South Florida, the number of reverse mortgages grew faster than even that.