In the recent past, many people began advising that a reverse mortgage loan could be used by savvy seniors who were in a position to invest the money and make a profit. Recently, AARP has been warning seniors that seminars committed to instructing you on how to do this type of reverse mortgage investing are risky scams that should be avoided. So what's the truth - can the reverse mortgage loan be used for investment or should you stop thinking about it as a method of getting rich quick?
The general rule of thumb to follow here is not to use the reverse mortgage loan as a method for investment unless you're already knowledgeable about the investment industry. There have been some people who are familiar with investments that are able to turn a profit using their reverse mortgage money. These are people who know how to make low-risk, high-reward investments with the cash that they are able to access. And they are people who are able to then use that cash to pay off their loan and put the rest in the bank.
Unfortunately, most people don't have that kind of savvy investment skill. The average person is taking a big risk when investing money and it makes sense not to take that risk with money that is on loan. You certainly shouldn't be doing it because someone at a seminar told you to do so. As with all financial matters, think carefully about making your choices and work with an unbiased financial planner to settle the details.
Question of the Day: Should seniors ever use the reverse mortgage loan as a method of gaining money for making investments?
