Although a reverse mortgage can be helpful to homeowners having trouble paying their bills, it also can jeopardize the homeowners’ financial future, warns the Financial Industry Regulatory Authority.
FINRA, Washington, says the loans often are aggressively marketed as an easy, cost-free way for retirees to pay for lifestyles, or even for risky investments that can endanger their financial security.
The organization issued an alert urging homeowners to weigh their options carefully before proceeding with a reverse mortgage. If consumers do decide a reverse mortgage is right for them, they still need to be sure to make prudent use of the proceeds, advises FINRA in a new investor alert, “Reverse Mortgages: Avoiding a Reversal of Fortune.”
The agency notes that reverse mortgages are expensive.