BOOK REVIEW : Reverse Mortgage Guide Is Technical But Rates a 10

“Retirement Income on the House” by Ken Scholen (National Center for Home Equity Conversion, 1210 E. College Ave., Marshall, Minn. 56258; phone (507) 532-3230), 1992, 326 pages, $24.95.

The simple concept of a reverse mortgage is the exact opposite of a conventional mortgage where the borrower receives a lump sum and pays it back, including interest, over 15 to 30 years. With a reverse mortgage, the elderly homeowner receives monthly payments from the lender, who is repaid, including interest, when the homeowner dies or sells the home.

In other words, elderly homeowners can use reverse mortgages to provide additional retirement income rather than letting their home equity sit idle. But the nationwide implementation of reverse mortgages has been very slow, mostly due to lack of information that seniors can understand. This excellent new book should help eliminate that problem.

The acknowledged national expert of the reverse mortgage movement is Ken Scholen, the author of this new book. His nonprofit organization trains counselors for the elderly to spread the word about reverse mortgages and Scholen has helped formulate the new FHA reverse mortgage program.

Scholen’s new book explains the reverse mortgage concept and when it is appropriate for use by a homeowner age 65 or older. He discusses both the private and public sector reverse mortgages, as well as the infinite variables that will affect the borrower’s cost. Scholen emphasizes that reverse mortgages are for homeowners who plan to keep their home a long time, but then he explains what happens if something happens to create an early move.

Chapter topics include understanding the basics, reverse mortgage types, what do you get, what does it cost, what do you pay, what’s left over, deferred payment loans, uninsured private programs, FHA program benefits and costs, lender-insured programs, and shopping for reverse mortgages.

This book is an ideal study book for senior citizens who are property rich homeowners who could be living better by enjoying their home equity. However, Scholen cautions that not all reverse mortgage plans are the same, so senior homeowners should fully understand the concept before beginning the reverse mortgage search.

At points the book becomes a little technical and rereading is necessary to grasp the concept being explained. But overall, there is no better reverse mortgage information source than this one. On my scale of one to 10, this outstanding new book rates a 10.