Thanks to Terry MacAvery for his input on this article.
The recent sluggish economy has had a devastating effect on people of all backgrounds, but Senior Citizens have had a particularly hard time. Their already limited incomes have been severely reduced by declines in the interest rates they can earn and by devaluation of their stock portfolios. This is especially problematic when considered in conjunction with the rising medical and insurance expenses that seniors must endure.
The value of SPHC property has skyrocketed in recent years, and many of our senior neighbors are "equity-rich", but hard-pressed when it comes to disposable income. This difficult state of affairs can be eased through what is known as a "reverse mortgage".
Some aspects of reverse mortgages are ominous. Fees are higher than with traditional mortgages, and heirs risk losing very valuable property if they can't pay off what might represent only a fraction of its value in a very short time. In fact, some people firmly believe that reverse mortgages are simply devious ways that big banks prey on the elderly and scoop up their property at rock-bottom prices!
Of course this basic discussion of pros and cons won't address anyone's particular situation. As with any large transaction, it is important to discuss and fully investigate the terms and implications before signing any contract.
Our Board of Directors recently voted not to allow reverse mortgages on our properties. A reverse mortgage can have a profound impact on the quality of life for our senior neighbors, and this impact is worthy of deep consideration, and, in my opinion, at least some public discussion.