AARP Reverse Mortgage Warning

5/14/2008

posted by N. Sioris

Stumble It!

AARP is warning seniors to be very careful when attending "free lunch" seminars where they are urged to take out a reverse mortgage and use the funds to invest in risky investments. In many cases the investment being touted is an annuity. Many annuities will have lock-out periods where you cannot access your money without paying steep penalties, even in an emergency. This type of investment is not suitable for older people.

AARP director, Steve Gools, from Michigan, said "If someone urges you to obtain a reverse mortgage to make an investment or purchase insurance, be very skeptical. I cannot think of one instance where a person should take out a loan to buy an investment."

AARP suggests that anyone that is eligible for a reverse mortgage, carefully consider whether they are good candidates for this type of loan. You are urged to seek qualified financial advice and or a second opinion. And NEVER do business with someone who is pressuring you to purchase another investment or giving you a hard sell.

Additionally, thoroughly check the licensing and credentials of anyone offering you any type of financial product, including a reverse mortgage. An excellent resource for this is FINRA (Financial Industry Regulatory Authority.)

You may also request a free comprehensive reverse mortgage benefit summary. The summary will show you a comparison between several reverse mortgages, the costs involved, and which one will provide you with the most money.