topic Re: Reverse Mortgages in Home

Reverse Mortgages

travelin grandma — Sun, 14 Sep 2014 16:38:06 GMT

Has anyone had any experience, good and/or bad, with this? I am considering one but not sure how to go about it, or even if I want to. Thanks

Re: Reverse Mortgages

patbz — Sun, 14 Sep 2014 16:55:32 GMT

Be very careful, if you have a financial advisor or banker ask him or her. The interest is very high and house must be sold when last owner of record leaves for a particular period of time. If you have enough equity to consider this maybe you could sell and move into a more cost effective rental, (for instance).

Re: Reverse Mortgages

Sunshine Kate — Sun, 14 Sep 2014 16:58:44 GMT

On 9/14/2014 patbz said: Be very careful, if you have a financial advisor or banker ask him or her. The interest is very high and house must be sold when last owner of record leaves for a particular period of time. If you have enough equity to consider this maybe you could sell and move into a more cost effective rental, (for instance).

Yes, I agree.

Re: Reverse Mortgages

travelin grandma — Sun, 14 Sep 2014 16:59:03 GMT

Thank you.

Re: Reverse Mortgages

LilacTree — Sun, 14 Sep 2014 17:00:58 GMT

Mine was a big mistake, but it was my own fault. And it happened right before the crash. So I lost $80,000 in actual hard cash (not on paper). Worst financial mistake of my life.

Re: Reverse Mortgages

151949 — Sun, 14 Sep 2014 17:14:03 GMT

There are many aspects of this to be considered. My DH and I feel this will be an alternative for us if we need to one day - we never know how inflation may affect what we consider to be an adequate amount of savings. If I were considering doing this I would not do it without getting an attorney to look it over first - and I would definitely look at many different financial institutions to see how they differ in their terms.

We bought our home for cash at a very reasonable price in 2010 - it is a home that we can stay in until we need to go into some kind of supervised living situation, so I would not want to have to sell, esp. since we have long term care insurance that will cover the cost of in home care should we need it.

From what I have heard - and seniors discuss this stuff a lot - there are many reverse mortgage institutions that are really excellent and there are just as many that are scammers. That is why you need an attorney to go over it for you.

Re: Reverse Mortgages

CalminHeart — Sun, 14 Sep 2014 17:38:59 GMT

A reputable and honest financial advisor will tell you not to get a reverse mortgage. There are a lot of potential down sides. It's even an issue when a person wants to buy securities products (i.e.: mutual funds, variable annuities, and such).

Re: Reverse Mortgages

151949 — Sun, 14 Sep 2014 18:07:11 GMT

On 9/14/2014 CalmInTheHeart said:

A reputable and honest financial advisor will tell you not to get a reverse mortgage. There are a lot of potential down sides. It's even an issue when a person wants to buy securities products (i.e.: mutual funds, variable annuities, and such).

WHAT? What does a reverse mortgage have to do with buying mutual funds?

Re: Reverse Mortgages

Nightowlz — Sun, 14 Sep 2014 18:15:23 GMT

Suze Orman has some info. about the risks & rewards on her site that may help. We don't have a reverse mortgage & don't know anyone that does so don't know much about them. http://www.csmonitor.com/Business/2011/0309/Suze-Orman-Know-the-risks-rewards-of-reverse-mortgages

Her info. sends you to Hud.gov site but the link did not work. Here is the link to it. There is a link here to find lenders by state & counselors for reverse mortgages.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmhome

She also has a calculator at the 1st link at the bottom of the article to see how much you would receive, interest etc.

Re: Reverse Mortgages

bonnielu — Sun, 14 Sep 2014 18:18:27 GMT

I have watched the commercials with interest. I feel there are too many loopholes for me to even ever consider when it comes down to the fine print and signing on the dotted line.

Re: Reverse Mortgages

LilacTree — Sun, 14 Sep 2014 18:19:50 GMT

On 9/14/2014 happy housewife said:
There are many aspects of this to be considered. My DH and I feel this will be an alternative for us if we need to one day - we never know how inflation may affect what we consider to be an adequate amount of savings. If I were considering doing this I would not do it without getting an attorney to look it over first - and I would definitely look at many different financial institutions to see how they differ in their terms.

We bought our home for cash at a very reasonable price in 2010 - it is a home that we can stay in until we need to go into some kind of supervised living situation, so I would not want to have to sell, esp. since we have long term care insurance that will cover the cost of in home care should we need it.

From what I have heard - and seniors discuss this stuff a lot - there are many reverse mortgage institutions that are really excellent and there are just as many that are scammers. That is why you need an attorney to go over it for you.

If you do not have a mortgage, I don't understand how or why you would be interested in a reverse mortgage. It seems to me that the monthly money you would be getting has to come from somewhere so, therefore, would you be putting a mortgage on your home?

Re: Reverse Mortgages

boby — Sun, 14 Sep 2014 18:21:17 GMT

My best friend is a financial advisor, and he doesn't recommend these at all. When I retired my employer held retirement seminars, and two more professional advisors basically said "Don't do it."

The actors and politicians pitching these things like to emphasize you don't have to make regular payments. All that means is that more and more interest accrues on the unpaid principal.

A lot of uninformed folks assume that you stop paying your taxes too - good way to lose your home.

As other posters have already pointed out, if the market depresses and you end up short of cash to repay when you sell, you're in the deep weeds.

The only time I would even consider a reverse mortgage is if you have a serious short-term cash flow problem. And then you better have the self-control to repay old debt before you run out and buy a new Mercedes.

Re: Reverse Mortgages

Ibby114 — Sun, 14 Sep 2014 18:31:12 GMT

On 9/14/2014 boby said:
My best friend is a financial advisor, and he doesn't recommend these at all. When I retired my employer held retirement seminars, and two more professional advisors basically said "Don't do it."

The actors and politicians pitching these things like to emphasize you don't have to make regular payments. All that means is that more and more interest accrues on the unpaid principal.

A lot of uninformed folks assume that you stop paying your taxes too - good way to lose your home.

As other posters have already pointed out, if the market depresses and you end up short of cash to repay when you sell, you're in the deep weeds.

The only time I would even consider a reverse mortgage is if you have a serious short-term cash flow problem. And then you better have the self-control to repay old debt before you run out and buy a new Mercedes.

I can't stand those misleading commercials! They make it seem like the banks give you a monthly lump sum of money based on the equity of your house- soooo not the truth! I'd read up on what Suze Ormon has to say.

Re: Reverse Mortgages

DiAnne — Sun, 14 Sep 2014 18:33:16 GMT

On 9/14/2014 Ford1224 said:
On 9/14/2014 happy housewife said:
There are many aspects of this to be considered. My DH and I feel this will be an alternative for us if we need to one day - we never know how inflation may affect what we consider to be an adequate amount of savings. If I were considering doing this I would not do it without getting an attorney to look it over first - and I would definitely look at many different financial institutions to see how they differ in their terms.

We bought our home for cash at a very reasonable price in 2010 - it is a home that we can stay in until we need to go into some kind of supervised living situation, so I would not want to have to sell, esp. since we have long term care insurance that will cover the cost of in home care should we need it.

From what I have heard - and seniors discuss this stuff a lot - there are many reverse mortgage institutions that are really excellent and there are just as many that are scammers. That is why you need an attorney to go over it for you.

If you do not have a mortgage, I don't understand how or why you would be interested in a reverse mortgage. It seems to me that the monthly money you would be getting has to come from somewhere so, therefore, would you be putting a mortgage on your home?

You are putting a mortgage on your home. You still have to pay the taxes and do repairs but you have access to a portion of the equity in your home without having to pay it back until house is sold. There are very high monthly fees (interest) on these loans. You can chose a monthly check or a line of credit to access when you need to. I think for some people this can be a wise decision and for others a bad idea. Everyone is different.

Re: Reverse Mortgages

151949 — Sun, 14 Sep 2014 18:34:09 GMT

Obviously, there are many different kinds of reverse mortgages. Some pay off liens against the home. Others simply give the person a monthly income for a certain period of time , while allowing them to continue to live in the home. In those cases you sign over your home to them and they send you a monthly check - there is no interest and no payments from you - the payments are TO you. When you have to leave the home to a nursing home or you die they get the home to sell. I think there is a lot of misunderstanding about what a reverse mortgage is. And I think there apparently are many different configurations of reverse mortgages. I don't see anything wrong with using the equity in your home to increase your monthly income so you can have a better life as long as you don't have your heart set on leaving the home to someone. especially for widowed spouses who lose half their monthly income when their spouse dies, it could make them able to stay in the home they love.

Re: Reverse Mortgages

depglass — Sun, 14 Sep 2014 18:47:27 GMT

I think invoking President RR to sell this product is meant to put people at ease. Well, it tells me to turn around and run.

Re: Reverse Mortgages

151949 — Sun, 14 Sep 2014 18:48:29 GMT

I was just reading online Susie orman's site about reverse mortgages. her complaint about them is that after you die your heirs may not get any money from the sale of the home. To me that makes no difference . There is no one that I am planning to leave my home to that needs that money - and if I need it why shouldn't I get it to make my lifestyle better? especially if one of us dies and the other is left with half the income?

I do understand that some reverse mortgages are scams - but they all aren't. Some provide much needed income.

Re: Reverse Mortgages

Wild Rose — Sun, 14 Sep 2014 19:31:33 GMT

Depending on the circumstances on why you are considering a reverse mortgage in the first place...you may want to research an Interest Only Home Equity Line of Credit as an alternative. I am a retired banker and have recently been helping my MIL with her finances. She is house rich/cash poor and we found out recently that she has been paying her property taxes with credit card cash advances!! Yikes! I did a little hunting and found a product that worked very well for her (she's 85).. a home equity line that has interest only for 15 years before a P&I payment is required...don't think she'll live that long to worry about that... The interest rate is Prime +0...which is a variable rate, so that can have some risk...but in this instance because of her advanced age I'm comfortable with the risk over the next 5+ years at least... The only closing costs in this case was for an appraisal, which was $200. As I said, depending on your circumstances, this can be a far better choice than a reverse mortgage...

Re: Reverse Mortgages

qvcaddition — Sun, 14 Sep 2014 19:34:54 GMT

Get a reputable person that you have dealt with for a long time and keeps in touch with you on changes.

They are the last resort when you only have 900 a month income and no retirement. Your home is paid for and the equity is high. You have no one you care to leave it too and why scrimp in poverty level or go on state aid, when you have worked to pay your home all your adult life for 30 years.

It is not for some and a life saver for others. Each different. You do have to keep up the home and pay taxes. What they mean by no taxes as another poster said is, you do not have to pay taxes on the money you receive. You still have to pay ins. and taxes on your home.

You also have to go to counseling before you sign on the dotted line. People need to get all the facts and do what is right for them, not others. If you can afford to borrow and pay back money to a financial institution, fine, but if you don't have enough income to live with todays prices, how can you borrow and pay back. This money is yours. You might lose some in the transaction, but you would in any transaction. Besides, you can't take with you what is yours, so leave it behind for someone else or enjoy comfortable life yourself.

I am not saying get one, I am saying, it is different for everyone and you make the choice not someone else. If you can afford an attorney, you don't need a RM. It's for those that really have nothing much to live on.

Re: Reverse Mortgages

pazama — Sun, 14 Sep 2014 19:47:37 GMT

My mom got a reverse mortgage, her house had no mortgage and she didn't have enough money coming in monthly. Her medicines were very pricey. Thank goodness it was before the real estate tanked. Well she passed away from lung cancer on May 24 and being the executor of her estate. I received notice that we had to pay the loan. She borrowed 90,000 but with the fees I was looking at 138,000. She had no money and I didn't want to buy her place. They foreclosed and sold it for $122,000. Wells Fargo was horrible.