Reverse Mortgage

[windjammer]

I heard some about a reverse mortgage. I don't know enough to know if it's a good thing for a couple reaching retirement age.

The home is now free and clear, and has been for some time. Anyone have thoughts, pro or con.

 

[windjammer]

I heard some about a reverse mortgage. I don't know enough to know if it's a good thing for a couple reaching retirement age.

The home is now free and clear, and has been for some time. Anyone have thoughts, pro or con.

 

[smith17]

wj:
I seen to remember that it is something like negotiating and receiving a stipulated amount of money, based on the home's value, with the agreement that you may live in it until you can't (based on health or death) and then the home belongs to the lender. I may be all wet with my recall.

Ed

 

[truckemup97]

In most situations, a reverse mortgage is a bad idea. Depending on your age, they'll likely give you less than half the value of your house. Yes, you get to live in it, but you also have to pay to keep it up and pay taxes on it. Then, when you die, they get the house, not your heirs. Like I said, usually a bad idea. If you think it might be a good idea in your situation, I'd urge you to talk it over with an accountant. They can run the numbers for you.

 

[ladder13]

^^^^^^^^^^^^^
Everything he said.

 

[HUGHP]

and the upfront closing cost is prohibitive.

 

[OKFC05]

They are going to get your house when you die, even if you still have a lot of equity in it.
Why? They are going to demand an exhorbitant amount from your heirs to buy back the company equity in the house, so the heirs will have to just let it go. Their charges and interest rates are absurdly high.

It's not much removed from fraud and stealing.
Don't be a sucker just because you're old.

 

[Jacksmyname]

If you own the house free and clear, and you have no heirs, it *MIGHT* be ok.
If I recall correctly, there's a requirement that you meet with a gov. rep beforehand to go over everything, pro and con.
We have no kids/heirs, and the house is paid for, so it might be ok for us.

 

[No30]

Reverse mortgage - the work of the Devil. Just my opinion.

Todd

 

[CAJUNLAWYER]

Please don't do it.

 

[feralmerril]

There must be different kinds of reverse mortgages. Listen to this one. My best friend in californias mother had one. She only lived about two months on it and recently died. The house is in palm springs. It already had dropped huge in value when she got on the plan last november or december. Probley half to start with. Somehow my buddy paid back a lump to get the house and resell it. The final paperwork I think is today. (He called me yesterday.) Buddy seems okay with the deal under the cirumstances, but it sounds like a huge loss to me! Now had this happened three years ago when the house was worth almost three times as much it would have been a lot more different and sensable.

 

[NFrameFred]

Originally posted by CAJUNLAWYER:
Please don't do it.

Listen to him. He plays a lawyer on TV.

 

[truckemup97]

Originally posted by NFrameFred:

Originally posted by CAJUNLAWYER:
Please don't do it.

Listen to him. He plays a lawyer on TV.

Yeah, but he also stayed at a Holiday Inn last night.

 

[nogoodnamesleft]

Under no circumstance should you do this.

 

[Hondo44]

I investigated this at length when the market was normal.

There's only one upside. If you have no other option but to lose the house and be out in the street, then do it. Because no matter how long you live, they'll never take the house until you pass away. You continue to get a payment each month even after the equity in the house is used up. How? The rest of us taxpayers make the payments to you like any other government program.

Otherwise don't do it, there is no other advantage for anyone else. An exorbitant interest rate is charged against the equity each month. Although heirs get the 1st refusal when you die they won't want to pay the price. Now having said that, in today's upside down market, the heirs may get a bargain.

 

[johngalt]

I don't know anything about them, but lenders wouldn't offer the deal unless they win big and you lose.

 

[Beemer-mark]

It's a far better deal to get a new mortgage on the house, put it in the bank and live off that. Esp. with today mortgage rates. If you get quotes for a reverse mortgage and a straight out mortgage and compare costs it will be very clear.

 

[frbeall]

In my opinion it's a scam aimed toward the elderly.

 

[HAWKEYE10]

I think after reading all these post you know what to do. Just say no. Don

 

[jframe]

I think that if I'm ever fortunate enough to own a home, free and clear of a mortgage, then that home will be the LAST thing that I put up just to get cash.