"Best time is when you don't need to"

Wrote Wealthy Boomer columnist Jonathan Chevreau in his Financial Post column on Saturday, August 9.

Chevreau's article summarized the reverse mortgage market and provided cautions for readers:  www.financialpost. com/wealthy-boomer

The caution expressed in this column was timely and clearly expressed. Jonathan quoted me saying: "A reverse mortgage should not be an act of desperation. Wade says the best time to research them is before you need one."

With recession-based financial stress still commonplace, property owners can be pressured by their children and/or grandchildren to tap into home equity to bail them out.

Since once a reverse mortgage is in place, it begins eroding the accumulated value, or home equity, faster than that it was originally created. This makes these financial, lifestyle and wealth management tools useful when there are no other alternatives, but not a best friend when there are other solutions. In the case of family pressuring for a reverse mortgage, there is at least one other significant solution--let them solve their financial problems with their own resources or take the heat--so a reverse mortgage would be a worst enemy for the property owner.

A reverse mortgage will be a best friend when there is no other way to achieve the property owner's goals, the principal of which is to afford to stay in the home they love. When any other solution will achieve the goals involved in considering a reverse mortgage, a reverse mortgage will be an expensive, irreversible worst enemy.

Tell your family that PJ Wade said: Tell your family to keep their hands off your home equity, and to get busy building some of their own.