WASHINGTON — Reverse mortgages are beneficial for certain older homeowners if all aspects are taken into consideration, CUNA Chief Economist Bill Hampel told CNNMoney.com in a recent article.
|"In theory it's really cool: You can stay in your house and withdraw your equity," Hampel was quoted as saying in the June 21 article. "However, what people probably don't appreciate is the theory of opportunity cost." In some cases, people may be better off selling their home and investing the money elsewhere, he warned.
|"Just because [your home] is paid off doesn't mean it's not costing you to stay there. What it's costing you to stay there is the income you could have gotten by investing the value of the house someplace else," he said. Hampel said for some the reverse mortgage might make sense while others should probably just sell, rent a smaller place and invest.
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