Letter: Reverse mortgage delays interest
Stricter rules on mortgage fees that have been in place since 2008 require that if part of the estimate is off by too much from the actual cost at closing, the bank may have to pony up the difference. Credit: iStock
The letter "Reverse mortgage can be a bad choice" [April 15] claims that a borrower would have a substantial net loss, in part because of the interest he had to pay. The whole point of a reverse mortgage is that the cash-strapped borrower makes no payment on the interest. Instead, it accrues silently on the balance of the loan. This enables the senior citizen to enjoy the wealth that was locked up in his home equity.
Will his net worth shrink? Quite possibly, but the net result of that is his heirs inherit less of a fortune tomorrow, while dad lives more comfortably today.
Martin Dekom, Manhasset
Editor's note: The writer is a reverse mortgage expert with a Long Island bank.
