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Does anyone have some experience or knowledge on Reverse Mortgages? (Original Post) Auntie Bush Apr 2013 OP
aka Equity Release. dipsydoodle Apr 2013 #1
The UK's equity release is explained in this article... pacalo Apr 2013 #12
Start here..... lamp_shade Apr 2013 #2
and here dipsydoodle Apr 2013 #3
Fees are high. Rates are high. Hassin Bin Sober Apr 2013 #4
If you have a paid-off house and NO heirs, it's not a bad deal SoCalDem Apr 2013 #5
This message was self-deleted by its author Ruby the Liberal Apr 2013 #6
I fear that is the best advice so far. Auntie Bush Apr 2013 #15
AB - what do you need the money for? Ruby the Liberal Apr 2013 #18
I need some expensive repairs done on my house and I'm trying to Auntie Bush Apr 2013 #19
Then definitely talk with your bank about a home equity Ruby the Liberal Apr 2013 #20
Thank you. True Blue American Jul 2019 #28
Your signing away any future appreciation in your property tularetom Apr 2013 #7
That is untrue Yo_Mama Apr 2013 #14
Depends on how long you live... wercal Apr 2013 #8
Selling a 200K house (netting 200K) SoCalDem Apr 2013 #9
Do not forget the interest True Blue American Jul 2019 #30
fred thompson advertises them.. do i need to say more? dionysus Apr 2013 #10
And Pat Boone! Can't stand either one of them...two of the reasons I feared Auntie Bush Apr 2013 #16
Notice that both of those far right, anti-government assholes make Raven Apr 2013 #17
Now Tom Sellick is doing them! True Blue American Jul 2019 #27
Another rich republican Tech Jul 2019 #29
I get sick True Blue American Jul 2019 #31
It depends on your circumstances Yo_Mama Apr 2013 #11
So is taking one True Blue American Jul 2019 #32
I have a friend who just did it. She is a widow... Walk away Apr 2013 #13
I was under the impression they were pushed on older people to take advantage of them. Warren DeMontague Apr 2013 #21
That's what I thought too. A rip off! Auntie Bush Apr 2013 #22
Message auto-removed Name removed May 2013 #23
Welcome to DU my friend! hrmjustin May 2013 #24
Message auto-removed Name removed Jul 2019 #25
No, no, no! True Blue American Jul 2019 #26

Hassin Bin Sober

(26,273 posts)
4. Fees are high. Rates are high.
Mon Apr 29, 2013, 07:56 PM
Apr 2013

As a last ditch effort they are Ok if your kids aren't expecting to bank the proceeds from the house when you die.

At the very least, hold off taking a reverse mortgage as long as possible.

SoCalDem

(103,856 posts)
5. If you have a paid-off house and NO heirs, it's not a bad deal
Mon Apr 29, 2013, 07:57 PM
Apr 2013

IF you are quite elderly and are broke.

Otherwise, it's a way to extract YOUR equity, and pay a middle man "fees".. as your equity vanishes and you live on, I think they are forbidden from evicting you, BUT any family who might expect to "get thew house"..well, they are S-O-L

Response to Auntie Bush (Original post)

Ruby the Liberal

(26,217 posts)
18. AB - what do you need the money for?
Mon Apr 29, 2013, 08:38 PM
Apr 2013

An HELOC (home equity line of credit) may be a better option - and those are out there for 1.99-3.24 interest for 12 months (then float, currently 3.99-ish). They are also tax deductible on the interest as opposed to regular consumer/auto-type loans. If you have the equity for a reverse mortgage, you have the equity for a HELOC.

What are you looking to accomplish?

Honestly, people asking your goals aren't fishing - they are looking to get you into the most appropriate financing vehicle.

I likely can't help you personally due to location, but happy to walk you through your options. I am a PM away if you want second eyes.

Auntie Bush

(17,528 posts)
19. I need some expensive repairs done on my house and I'm trying to
Mon Apr 29, 2013, 09:05 PM
Apr 2013

figure out if I should take out another mortgage (which would be very difficult to afford) or take out a Reverse Mortgage and not have to have so many worries. However, I have 4 children I'd always hoped to leave some inheritance to. Bummer! I would look into it thoroughly before I did anything. I was hoping someone here had some personal experience with RM. Thanks for your offer for advice. AB

Ruby the Liberal

(26,217 posts)
20. Then definitely talk with your bank about a home equity
Tue Apr 30, 2013, 03:43 AM
Apr 2013

You do a reverse mortgage and your kids could get hit with a bill as opposed to an inheritance. A home equity isn't a mortgage - Most (honest banks) don't even charge closing costs.

tularetom

(23,664 posts)
7. Your signing away any future appreciation in your property
Mon Apr 29, 2013, 08:00 PM
Apr 2013

So if you are contemplating doing this, best to sit down with your heirs and make sure they understand that your home won't be part of your estate.

Yo_Mama

(8,303 posts)
14. That is untrue
Mon Apr 29, 2013, 08:11 PM
Apr 2013

The way a reverse mortgage works (and they are regulated), the amount you get it each month incurs interest. So instead of paying down your mortgage you are accumulating one.

When you sell or move out of the house (even to a nursing home), you are required to pay back the loan, which almost always requires selling the home. However only the amount accumulated from principal payments made to you plus interest on the accumulated interest payments is owed. The balance will be paid to the homeowner or the survivor or the estate, if the closure was due to death.

Taking them out early is a mistake, because say you take out a $500 monthly reverse mortgage when you are 65 and live to 85. You are paying interest on the first $500 payment for 20 years!

Also, the payment does not rise with inflation. In a traditional mortgage that generally works to the borrower's favor, because a fixed mortgage payment will generally decline as a percent of one's income. But for an elderly person who does this early, the initial payment may have been adequate, but 15 years later it will be much smaller in a "real" sense, so it does not make sense to do this.

wercal

(1,370 posts)
8. Depends on how long you live...
Mon Apr 29, 2013, 08:00 PM
Apr 2013

....seriously, it does.

One thing to always remember - its not unlike a traditional mortgage, in the sense that you are obligated to pay taxes and insurance.

And, if you lapse on either of these, the mortgage company has the right to foreclose. And, there is absolutely nothing to slow the forclosure down...in fact its the reverse.

So read the fine print - figure out how quickly they can foreclose if you are late paying taxes, etc.

I would say 'have a fire sale' and get your own cash out of the house...but I assume you don't want to move, etc. Another option would be for children to buy it and rent it to you - their incentive being that your other alternative does not involve their ever owning the house.

Now one thing others on this thread aren't considering is nursing homes. If I recall correctly, if you go into a nursing home with no money, medicaid will pay for it...but require you to liquidate all your assets. So, your heirs may still not get the house, even if you don't do the reverse mortgage. So this decision depends on your own health and projected longevity...likelyhood of nursing home care...and heirs.

SoCalDem

(103,856 posts)
9. Selling a 200K house (netting 200K)
Mon Apr 29, 2013, 08:00 PM
Apr 2013

bank the 200K, and even withdrawing $1111.11 per month in principal will last 15 years..

Perhaps selling is better

You would have to actually move though.

True Blue American

(17,972 posts)
30. Do not forget the interest
Tue Jul 2, 2019, 05:28 AM
Jul 2019

2.5 times 200,000. $5000. But, of course you have to live somewhere. Many are hurting for every day living expenses and these billionaires are peddling fear.

Now, why does that sound so familiar? Fear of those who do not look like you? Greed, selfishness.

Auntie Bush

(17,528 posts)
16. And Pat Boone! Can't stand either one of them...two of the reasons I feared
Mon Apr 29, 2013, 08:28 PM
Apr 2013

it was a scam. I was hoping someone who had some personal experience with one would know the truth and get to the fine print. I'm having trouble believing those who are selling them or profiting from them...it's a scary thing to do or ever contemplate.

Raven

(13,872 posts)
17. Notice that both of those far right, anti-government assholes make
Mon Apr 29, 2013, 08:38 PM
Apr 2013

a big point of the reverse mortgages being insured by the federal government. Shameless shitheads! Oh, and Fred tells us that if we take one out we can live the retirement we have dreamed... this, after he and his ilk robbed our retirement accounts. Reverse mortgages, with very few exceptions, are a very, very bad idea.

True Blue American

(17,972 posts)
31. I get sick
Tue Jul 2, 2019, 05:30 AM
Jul 2019

Every time I see Tom look into the camera and tell the Elderly how great a Reverse mortgage is.

Yo_Mama

(8,303 posts)
11. It depends on your circumstances
Mon Apr 29, 2013, 08:04 PM
Apr 2013

If you are quite elderly and own your own home and need the money, then it may be the best way for you.

But taking one out too early is a big mistake.

Here's some HUD info on them.
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten

I'm going to repeat, doing this early is a big, big mistake.

True Blue American

(17,972 posts)
32. So is taking one
Tue Jul 2, 2019, 05:52 AM
Jul 2019

Any time in a great many cases thanks to crooked lenders, etc.

The lies that have been peddled about living in your home for the rest of your life are just not true if you miss a payment, neglect to pay your taxes or lenders selling your mortgage to someone else.

Reading how Reverse Mortgage foreclosures are soaring makes me angry.

Walk away

(9,494 posts)
13. I have a friend who just did it. She is a widow...
Mon Apr 29, 2013, 08:05 PM
Apr 2013

and desperately trying to make it to Social Security and Medicare. Without the reverse mortgage she would have had to move out of her home. She did her research and understands what she has gotten into. She even lobbied to have her condo association change it's contract in order for all 1000 units to be eligible for RMs.

She was never going to be able to pay off what is left of her mortgage and she has no one to leave her property to and could not make the monthly payments. It's not for me but talk to your family lawyer or accountant. If you don't have one get a trusted recommendation.

Warren DeMontague

(80,708 posts)
21. I was under the impression they were pushed on older people to take advantage of them.
Tue Apr 30, 2013, 04:37 AM
Apr 2013

i.e. structured to be a bit of a ripoff.

Auntie Bush

(17,528 posts)
22. That's what I thought too. A rip off!
Tue Apr 30, 2013, 11:26 AM
Apr 2013

I was hoping someone here had experience with this type of mortgage.

Response to Auntie Bush (Original post)

Response to Auntie Bush (Original post)

True Blue American

(17,972 posts)
26. No, no, no!
Mon Jul 1, 2019, 06:38 PM
Jul 2019

I just read today that reverse mortgage foreclosures are soaring. Elderly losing their homes because of crooked dealings, selling mortgages to others.

Miss one payment and they can foreclose. I have always been against them, now the truth is coming out. Makes me sick.

https://reversemortgagedaily.com/2019/06/12/usa-today-investigates-reverse-mortgage-foreclosures-evictions/

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