Tom Selleck Says Reverse Mortgages Aren’t Giving Away the Farm – Do You Agree?
Are reverse mortgages simply a way for greedy lenders to take the homes of unsuspecting seniors? Or are they a legitimate tool that can help people our age to stay in their homes, while having a better quality of life in retirement? These are the questions that ran through my head as I watched the new American Advisors Group (AAG) commercial, featuring Tom Selleck.
I’ll return to the commercial in a second. But, first, I want to go through some of the basics of reverse mortgages, so that we can have an informed discussion as a group.
Why Have Reverse Mortgages Become So Popular… and Controversial?
As we reach retirement age, many baby boomers are finding that our financial resources are not sufficient to maintain the quality of life that we were used to during our peak career hears. Heck, some of us are even struggling to survive!
Of course, whenever there is a large population with a specific need, companies will rush to fill it. Perhaps this is why we have seen so many reverse mortgage services appear as of late.
On the surface, reverse mortgages aren’t difficult to understand. Basically, a reverse mortgage allows older adults to take a loan out against their home’s equity. It doesn’t require the homeowner to move and the money from the loan can be paid monthly or as a lump sum.
With reverse mortgages, like so many other things in life, the devil is in the details. One significant downside to this type of loan is that it can come with high fees. According this this article, homeowners can expect to pay $30,000 to $40,000 to take out a reverse mortgage. A separate CNBC article mentioned that the costs are probably closer to $8000 to $10,000. Either way… Ouch!
In addition, while AAG may be a reputable company, there are also many scammers out there who are ready to take advantage of homeowners in need.
While I am not a financial professional, two pieces of basic wisdom apply here. First, reverse mortgages should almost always be a last resort. In addition, working with a financial professional and having them review all of the paperwork will help to protect you from the bad guys. Take the time to have your accountant or financial planner explain all of the pros and cons to you. This is a major decision.
Why is Tom Selleck Promoting Reverse Mortgages?
All this brings me back to my original question – why is Tom Selleck promoting reverse mortgages? Is he simply doing it for the money? Or, is it possible that some of the perceptions that we have about reverse mortgages may be out of date?
Please take a minute to watch the commercial. Then let’s start a conversation.
In the commercial, Selleck refers to the many preconceptions that we have about reverse mortgages. For example, many people think that the lender takes the title to your home. Others believe that a reverse mortgage can cause you to get evicted.
I’m not going to get into the specifics of each of these issues. That said, several articles that I have read, including this one, pointed out that, while expensive, reverse mortgages are not as evil as people assume.
Looking at the “likes” on the YouTube video version of the Tom Selleck AAG commercial, it’s clear that people are pretty split on whether reverse mortgages are a good idea. Specifically, 13 people have “liked” the video and 11 have “disliked” it.
Since financial security is such an important issue for the women in our community, I’d like to start a conversation about this. Please jump in and let us know what you think!
What have you heard – good and bad – about reverse mortgages? Have you done your own research on AAG or any other reverse mortgage provider? What did you find? What did you think of the Tom Selleck commercial for AAG? Please join the conversation.