Choosing Costs for a Reverse Mortgage

by Wade Pfau, Ph.D., CFA

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Originally published at Forbes

The discussion of reverse mortgage costs has several moving parts. Which type of cost combination to choose depends on how you plan to use the line of credit during retirement. Let me reveal the punchline for the following discussion: Those seeking to spend the credit quickly will benefit more from a cost package with higher upfront costs and a lower lender’s margin rate. Meanwhile, those seeking to open a line of credit that may go unused for many years could find better opportunities with a package of costs that trades lower upfront costs for a higher lender’s margin rate.

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