The Cost of Waiting & Hedging Against Falling Home Values
Perhaps it is laughable to some to even consider hedging against falling home values. After all homes across the nation have appreciated nearly to their pre-housing crash levels. How quickly many homeowners forget the harsh lesson learned in 2009 that what comes up may come down. The truth is beyond being a source of cash flow or a retirement planning option, reverse mortgages can help older homeowners hedge against the risk of falling home values. Even worse, those who wait for their homes to appreciate could end up losing a substantial portion of their borrowing power when interest rates increase.
Jack Guttentag, better known as The Mortgage Professor, addressed the considerations of waiting to get a reverse mortgage in his recent column in the Huffington Post entitled “Should You Take a Reverse Mortgage Now, or Would It Be Better to Wait?”
Guttentag begins by describing the notable difference in the sense of urgency that a homebuyer has versus a potential reverse mortgage borrower. “ A prospective home buyer…
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