Posted on 04/07/2017 11:00:44 AM PDT by Rannug
Hello FReepers. I come to you for needed information. With all that is happening is this world, life must go on. I am 70 y/o and in better health that most. My DW, 66, is limited in her mobility.
Hell with all the bs from me. I need your opinions on a reverse mortage, whether you have one or not. Comments good and bad. Actual experiences, good and bad. Warnings. Advice.
Thanks to all.
They have their place, but it will affect your kids inheritance, obviously.
Lot’s of fees.
Don’t do a reverse mortgage just sell the place and go rent somewhere. Then spend the money as you go.
Don’t be suckered into buying a reverse mortgage
Advertisements make them sound tempting but reverse mortgages can put your retirement at risk
Consumer Reports. Pretty trustworthy.
Sell it to one of your kids with life use. Just another option.
It can be like life insurance. You are betting you are going to live a long time and they are betting you won’t.
I have a good friend(76) — a mortgage banker who is considering it and using the money for investing thinking he can get more for it that way as opposed to depending on housing price increases etc. I think it would depend on what you need or want the money for. I would be reluctant to do a reverse mortgage for purposes that might eat up the money quickly...uninformed investing, chronic health circumstances, gambling, loans to relatives etc.
Sell the house for as much as you can get. Move to a small apartment or condo..........................
If you can possibly avoid it, don’t do it. You’ll be stuck with it until you die. You cannot even live in a nursing home or with your kids but must live on the premises until death or the reverse mortgage is null and void and they take it all.
Life throws curve balls and you may find yourself out on the street with nothing.
A better option may be a traditional HELOC.
Home Equity Line of Credit.
This allows you to borrow up to 50% of the equity in your home. And pay back interest only payments.
Please know the interest only payment is for 10 years. Then you have to start a principal/interest repayment on the balance. Which means your payments will go up. a lot.
But for 10 years - you can borrow and repay on this Line of Credit. The rates are good and the interest only payments are easy on the budget.
But as I say - after ten years - this becomes a traditional mortgage loan with a set repayment. If at that time you are maxed out and cannot repay - you sell the home. Or else.
First question is “is the house paid for?” If not then that is one way to get out from under a house payment. Question two “are you in big debt?” if you are having problems making ends meet each month, then it might be right just to reverse the amount you need to pay off monthly payments. You still have to make your property tax payments, falling behind on that and/or lapsing insurance would be cause for foreclosure.
Many things to consider, it can be right for some but not for others.
Bkmrk.
You do not have to reverse the full amount. Let’s say your house is worth $150,000 and paid for. you could reverse any amount up to 75%. Lets say you just want $40,000. When you die the house goes for sale, they get their $40K plus interest and the rest goes to your estate.
The issuing company makes a profit on the reverse mortgages it makes. That’s all you need to know.
Depends on your situation. My Mom got one last year. She was planning to stay in the home the rest of her life. She was getting $1100 a month and she loved it. We told her we didn’t care about any inheritance, all we wanted was for her to be happy, not worry about money, travel if she wanted, etc. She loved it.
Then my brother passed away unexpectedly and she didn’t want to stay in the house so she sold it and paid off the reverse mortgage. But if he hadn’t died, she’d still be in it, collecting $1100 a month for like 10 years. I think they still have an option to collect forever.
For some people in the right circumstances.....it’s the perfect loan. You never have to pay it back. AFter you die, then it’s someone else’s problem........that’s the perfect loan if you ask me. LOL
I can’t speak directly to reverse mortgage, but can to purchase with life use. My late aunt began having problems with her balance, vertigo, and experienced several falls. It was becoming obvious that maintaining a household was becoming unworkable, despite her longevity and vitality. She’d kept a big garden with her own lawn and garden tractor, mowed her own lawn, even worked part time decorating cakes into her nineties. This was back in 2008, when you couldn’t hardly sell a house here period, without it being severely discounted. She was very worried, her savings were close to depleted. But, she’d always had a strong faith in God, Primitive Baptist. After much prayer, on her part and extended family as well as church members, one day Brethren from the Moravian Church behind her house turned up on her doorstep, offering to buy the house for full value. There were roadway expansions and access restrictions coming and they would be needing a new entrance at some point, and planned to use the house for a women’s ministry in the meantime. Needless to say such an obvious answer to prayer was accepted, and she had life use as well as payments continuing until paid in full if she had to go into assisted living. She did go into assisted living and it was quite nice, she was uncomfortable with it for a while and felt sort of useless, having been so active all her life, but no complaints about the care or the quality of the living arrangement. She lived past her 100th birthday and was well cared for the entire time. She had no children so what heirs she had were nieces, nephews and her church. So, after all that, I’d suggest finding a friendly buyer who would agree to your living there for as long as you need it, if possible.
Financial People have told me it is a last desperate resort.
In other words don’t do it.
When you see Henry Winkler (screaming Lib) and Tom Seleck (another Lib) pushing them that should say a lot.
Magic phrase is “As long as you live in your home”.
Beware.
Spend a couple of 100 and contact a “tax oriented” Certified Financial Planner for real advise.
Thats my story sticking to it.
Good Luck
Would you do this ?
Answer honestly ?
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