Letter: A lesson in reverse mortgages

Dear neighbors: Financial planning for seniors is a critical preparation as we reach retirement age. For homeowners with equity built up over the years, that home is their own real estate trust fund. Over the long term, homes increase incrementally in value, and they certainly outperform current returns on savings accounts and certificates of deposit.

Homes with good equity are eligible for reverse mortgages, which can be tapped into as we get older and savings diminish. Many people outlive their life savings. “I didn’t expect to live this long!” is too often heard.

Condominiums are eligible for reverse mortgages. Co-ops are not. Ask your banker.   For those of us who do need to manage our life savings for the long term knowing that we might run out of money, a condominium purchase is the better choice than a co-op, especially if we can transfer equity from the sale of our free-standing home to this new property. It is a safer investment in our future.

 

Douglas Koons, St. Anthony Park

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