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No. of Recommendations: 1
what's the catch?
The short version of the catch is many (maybe most) people who take these out and do not have a sudden death, run the risk of significant financial and/or residence issues.

It is a loan. It must be repaid when you sell your house. For most retired people their house is over half their financial wealth. The reverse mortgage is great while they can live in the house. But what happens when they become infirm or debilitated to the point they cannot take care of themselves? Under those conditions they may think of Assisted Living, Nursing Homes, moving to a single floor/smaller residence. But that move, unless they have sufficient liquid wealth beyond there house has consequences. Sell the house and pay off the mortgage - you are left only with the difference between the mortgage and the sale amount. That might well mean Medicaid which is welfare when all is said and done. Medicaid is a grim existence for those who are aware of their situation.

Gordon
Atlanta
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