Phil Cannella – Phillip Cannella Blog: Phil Cannella, as it is well-known, is a true retirement expert when it comes to working with a senior’s finances. Phil Cannella is the consummate financial professional and has studied much in order to properly advise and counsel seniors on what to do to protect their hard earned nest eggs as they go into retirement.
One of the topics Phil Cannella is very familiar with is a reverse mortgage. This is really just another tool in the mix of tools financial professionals need to understand when working with a retiree. Phil Cannella explains that the reverse mortgage can be a win-win for both the person taking it and the mortgage company. For you, you get to continue living in your home, make no payments and enjoy the cash equity you’ve built. Reverse mortgages are subject to an interest rate and closing costs, so you will likely end up paying back more than the original amount borrowed. However, if your home increases in value and you end up selling it, you could easily come out ahead. The mortgage company wins because they eventually receive your loan amount plus interest.
You retain the title to your home and thus retain ownership over your home as you continue living in it. Only if you sell your home, move out permanently or at your death do you have to pay the bank back.
Phil Cannella makes it very clear that this is just one more ingredient in the mix that financial professionals should consult their clients on. The reverse mortgage shouldn’t be recommended to all.