Elderly people are being warned to think twice before getting tied into a reverse loan.
The Auckland Law Society's Public Issues Committee says home equity loan marketing is not always up-front about the high interest rates involved.
It says reverse mortgages seem like a great way for the elderly to get hold of cash.
But Society President Andrew Gilchrist says the loans should be approached with caution.
He says lenders need to make it clear that high interest can mean zero equity in your home after your death.Gilchrist says lenders need to ensure elderly people are making an informed choice.
Even the Retirement Commissioner is endorsing calls for retired people to seek sound legal advice before committing to a reverse mortgage
Retirement Commissioner Diana Crossan says there is a lot of confusion about reverse mortgages and says the loans only suit a certain people and one should get legal advice before taking one out.
Crossan says there are free tools on the Commission's website to help people with financial decisions.
Source: Newstalk ZB
