he deceptive benefits of the reverse mortgage
On its surface, “the reverse mortgage sounds like a pretty sweet deal,” says Fortune’s Eugenia Levenson in CNNMoney.com. With these once-marginal, now-popular products for homeowners 62 and older, you don’t make any loan payments until you move, or die, and you won’t lose any money if your house is worth less than what you owe. But reverse mortgages can actually be a very expensive way to borrow. First there’s the “avalanche of up-front charges,” and while basic rates are lower than for home equity loans, reverse mortgages are compounding “rising debt” loans. If you qualify, you’re probably better off with a regular home-equity loan, or you can sell your house and “trade down or rent.”
Credit to credit unions
Credit unions have “a kind of sleepy, backwater image,” says Brett Arends in The Wall Street Journal. But they actually offer “some surprisingly good deals.” Since they don’t have to make profits for outside shareholders or spend heavily on marketing, and probably don’t “pay their chief executive $10 million while writing off billions in subprime loans,” credit unions often offer lower loan rates and higher deposit rates than commercial banks. If you’re interested , look around for credit unions you can join—most have membership restrictions—look to see if they’re insured by the FDIC-equivalent NCUA, and look at what they offer. You can always “cherry pick” services, like “leaving your checking account at Greedy Bank, Inc.”
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