But the real concern is ignorance and that is painfully evidenced by the stories in the above WSJ article. The vast majority of folks over 62 simply do not know they have an option to STOP making mortgage payments. Most of them have more than 50% equity, which is the approximate required level to get a reverse mortgage. At that point they can refinance to a reverse and have optional mortgage payments for the rest of their lives and only be liable for real estate taxes and insurance. For millions of people that simple fact is life changing—it is the difference between an enjoyable retirement and a challenging one, between fear and security. It is life changing. This ignorance has gone on too long. It should not have to take a financial disaster or external pandemic to realize what is effective retirement planning. Wayne Dyer said: “The highest form of ignorance is when you reject something you don't know anything about.” These reverse mortgage facts need to see the light of day with both advisors and seniors. Millions of financial lives hang in the balance.
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