Shelley Giordano’s book, “What’s the Deal with Reverse Mortgages?” received a stellar review from a writer from the Chicago Tribune who has historically been skeptical of reverse mortgages. Here’s a snippet from the full review which is here.
“I highly recommend “What’s the Deal with Reverse Mortgages?” (People Tested Media), a new book by Shelley Giordano, principal of Longevity View Associates, a reverse mortgage consulting firm, and chair of the nonprofit Funding Longevity Task Force. It will help you understand options such as fixed vs. variable loans, the nuances of using credit lines and all of the mortgage fees.
Giordano discusses the merits of home equity lines of credit (HELOCs) vs. those of home equity conversion mortgages (HECMs, FHA-insured open-ended reverse mortgages). HELOCs, she argues, have significant disadvantages. Borrowers have to repay principal and interest, whereas reverse mortgage borrowers are under no such obligation. Financial institutions can cancel HELOCs if they believe that borrowers have insufficient income or assets. Borrowers with a HECM line of credit don’t have this vulnerability.
In prior columns, I argued that one of the significant disadvantages of HECM’s was the high initial closing costs. Giordano says that some financial institutions are offering reverse mortgages with closing costs as low as $250. However, the tradeoff is higher interest rates. In my opinion, if you intend to maintain a line of credit for a long period of time, then the HECM has significant advantages over the HELOC, if you can obtain a HECM with very low (or no) closing costs. She recommends Retirement Funding Solutions (rfslends.com) as an example of a lender with flexible terms.”
Please read the full article by Elliott Raphaelson, The Savings Game of the Chicago Tribune here.