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Reverse Mortgage.

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Rich123

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Hi to all,
I have a question.

Do any of you have a reverse mortgage. If so, please share your experience.
Thank You,
Richard.
 
I don't have one, so my experience is relative to what I've read and seen about them.

That being said, in my opinion, they just look like a way to cheat elderly people out of their homes for pennies on the dollar.

Again, that is my unprofessional opinion, so I could be wrong. I'm quite sure that if I am, someone here will be sure to let me know. :lol:
 
Superfly said:
I don't have one, so my experience is relative to what I've read and seen about them.

That being said, in my opinion, they just look like a way to cheat elderly people out of their homes for pennies on the dollar.

Again, that is my unprofessional opinion, so I could be wrong. I'm quite sure that if I am, someone here will be sure to let me know. :lol:
Click to expand...

Love your Chomsky Quote. Thanks for your input. I'm very cautious. Love to get a lot of opinions about important decisions. Love your Caricature . The bar is soooooo low.
 
Rich123 said:
Love your Chomsky Quote. Thanks for your input. I'm very cautious. Love to get a lot of opinions about important decisions. Love your Caricature . The bar is soooooo low.
Click to expand...

Of course. Sorry I couldn't be of more help. I am extremely cautious when it comes to these things that seem to scheme older people out of their money. My mom had talked about getting one at one time, and I hope I talked her out of it. I don't want her to be 80 and having to live with one of us (not that we would mind) because a huckster talked her out of the home my father built for her. She refuses to sell the house because my father is now passed on, and she said she will never sell because he built it for her. I told her, "Then don't sign anything with the house on it. Nothing. Don't put it up on a note - don't do anything with it." I told her if she gets in trouble financially, call one of us and we will help her out. I wish I were closer to keep a better eye on her. :(

And thanks for the quote - can't take credit for it. It's all Chomsky. :) And if you can't tell, on the bar in my sig image? It says "decency." And that image could not be more true.
 
Superfly said:
I don't have one, so my experience is relative to what I've read and seen about them.

That being said, in my opinion, they just look like a way to cheat elderly people out of their homes for pennies on the dollar.

Again, that is my unprofessional opinion, so I could be wrong. I'm quite sure that if I am, someone here will be sure to let me know. :lol:
Click to expand...

I thought that too at one time.

My dad, though, widowed, and after a series of bad investments that went sour, and was also taken in by a Bernie Maddoff like scheme -- had hit some hard times in his mid 70's.

He took out a reverse mortgage. It was a godsend for him. (Just so you know, something I too didn't know was it is gov't backed & insured through FHA)

Mortgage lenders take a chance you will die or have to sell before the equity is depleted, and in that case, they make out.

In my dad's case he was able to live in the home for nearly 20 years after, w/o a mortgage payment, and long after the company had lost a ****ton of money on it.

Sometimes the odds work out, sometimes they don't. As for pops, who lived a darn good, long life, it was a blessing and it worked out for him.
 
Paperview said:
I thought that too at one time.

My dad, though, widowed, and after a series of bad investments that went sour, and was also taken in by a Bernie Maddoff like scheme -- had hit some hard times in his mid 70's.

He took out a reverse mortgage. It was a godsend for him. (Just so you know, something I too didn't know was it is gov't backed & insured through FHA)

Mortgage lenders take a chance you will die or have to sell before the equity is depleted, and in that case, they make out.

In my dad's case he was able to live in the home for nearly 20 years after, w/o a mortgage payment, and long after the company had lost a ****ton of money on it.

Sometimes the odds work out, sometimes they don't. As for pops, who lived a darn good, long life, it was a blessing and it worked out for him.
Click to expand...

Your post reminded me that I was going to mention something else to Rich -

Make sure you (or whomever) talks to your attorney before doing anything at all. Make sure if you do this that the lender is on the up-and-up.

And Paperview - excellent that it worked out for your Dad like it did. <3
 
I think if you are 70 and over, it would work out depending on the overall value of the property and the amount of equity involved.

Reverse mortgaging a 100K townhouse probably isn't going to do very much for you.
 
in a nutshell, if the elderly home owner(s) expect to outlive their savings, this is a program to be considered
especially if they own the home outright or have a small mortgage balance

the homeowner receives a percentage [somewhere close to half] of the property's market value, which percentage increases with the age of the applicant (and decreases as the expected interest rate increases)

so, if the applicant owned a $400,000 home and the principal limit factor was 50%, the gross amount of eligibility would be $200,000

thus, the elderly homeowner receives $200,000, and has to pay NO mortgage on that money while still residing in the home

for someone with limited savings/income, that is a substantial windfall. the homeowner must continue to reside in that primary residence, and maintain hazard insurance coverage as well as pay property taxes; just as they would if they did not have a reverse mortgage. additionally, they must maintain the home - but that is a very vague standard. so long as the home is not condemned, the owners will likely meet that expectation

as we have already seen in this thread, the opposition to reverse mortgages is often from family members who would be denied inheriting 100% of the equity in the home. the reverse mortgage balance must be paid to clear the title to be transferred to any heirs

in many cases, reverse mortgages allow the paid for homes to work for the elderly owners, by providing them a source of income they would otherwise not enjoy. they are no longer 'house poor' by virtue of the reverse mortgage loan proceeds
 
justabubba said:
in a nutshell, if the elderly home owner(s) expect to outlive their savings, this is a program to be considered
especially if they own the home outright or have a small mortgage balance

the homeowner receives a percentage [somewhere close to half] of the property's market value, which percentage increases with the age of the applicant (and decreases as the expected interest rate increases)

so, if the applicant owned a $400,000 home and the principal limit factor was 50%, the gross amount of eligibility would be $200,000

thus, the elderly homeowner receives $200,000, and has to pay NO mortgage on that money while still residing in the home

for someone with limited savings/income, that is a substantial windfall. the homeowner must continue to reside in that primary residence, and maintain hazard insurance coverage as well as pay property taxes; just as they would if they did not have a reverse mortgage. additionally, they must maintain the home - but that is a very vague standard. so long as the home is not condemned, the owners will likely meet that expectation

as we have already seen in this thread, the opposition to reverse mortgages is often from family members who would be denied inheriting 100% of the equity in the home. the reverse mortgage balance must be paid to clear the title to be transferred to any heirs

in many cases, reverse mortgages allow the paid for homes to work for the elderly owners, by providing them a source of income they would otherwise not enjoy. they are no longer 'house poor' by virtue of the reverse mortgage loan proceeds
Click to expand...



Good post, I would add the advice to get a lawyer to sign off on it. The have been abuses as many of the "owners" are elderly and not as cognizant as youth.
 
Superfly said:
I don't have one, so my experience is relative to what I've read and seen about them.

That being said, in my opinion, they just look like a way to cheat elderly people out of their homes for pennies on the dollar.

Again, that is my unprofessional opinion, so I could be wrong. I'm quite sure that if I am, someone here will be sure to let me know. :lol:
Click to expand...

No, that is other people's professional opinion too.
 
Superfly said:
Of course. Sorry I couldn't be of more help. I am extremely cautious when it comes to these things that seem to scheme older people out of their money. My mom had talked about getting one at one time, and I hope I talked her out of it. I don't want her to be 80 and having to live with one of us (not that we would mind) because a huckster talked her out of the home my father built for her. She refuses to sell the house because my father is now passed on, and she said she will never sell because he built it for her. I told her, "Then don't sign anything with the house on it. Nothing. Don't put it up on a note - don't do anything with it." I told her if she gets in trouble financially, call one of us and we will help her out. I wish I were closer to keep a better eye on her. :(

And thanks for the quote - can't take credit for it. It's all Chomsky. :) And if you can't tell, on the bar in my sig image? It says "decency." And that image could not be more true.
Click to expand...

Yeah, IMO it really is a last resort type of move. One needs to be desperate before doing something like this. Unfortunately there are a lot of desperate people out there.
 
I don't think it is correct or fair to refer to reverse mortgages as rip offs. To make matters simple, they are a way to sell your house for less than it is worth while being allowed to continue to live in it rent free for as long as you can. Since the reverse mortgage company takes the risk and enjoys the profit, it isn't good financial management. A better approach would be to sell the house and move to somewhere less expensive.

I've considered doing just that. My wife and I are old timers and live in a roomy 5 bedroom house. It is expensive and time consuming to maintain. The problem, of course, is that we like where we live. Perhaps in a few more years we will do something like that. I don't recommend a reverse mortgage for most people.
 
fmw said:
I don't think it is correct or fair to refer to reverse mortgages as rip offs. To make matters simple, they are a way to sell your house for less than it is worth while being allowed to continue to live in it rent free for as long as you can. Since the reverse mortgage company takes the risk and enjoys the profit, it isn't good financial management. A better approach would be to sell the house and move to somewhere less expensive.

I've considered doing just that. My wife and I are old timers and live in a roomy 5 bedroom house. It is expensive and time consuming to maintain. The problem, of course, is that we like where we live. Perhaps in a few more years we will do something like that. I don't recommend a reverse mortgage for most people.
Click to expand...

Reverse mortgages are great if you have no family and no kids to leave anything too.
If you do however they are not so great.

Sure you don't have to make a payment but then that 200k or 300k that you took out has interest that balloons.

when you you die your estate has to settle the loan. that means a huge debt to your estate and if they can't recoup the cost from the sale
of the home then they can go after other assets.
 
ludin said:
Reverse mortgages are great if you have no family and no kids to leave anything too.
If you do however they are not so great.

Sure you don't have to make a payment but then that 200k or 300k that you took out has interest that balloons.

when you you die your estate has to settle the loan. that means a huge debt to your estate and if they can't recoup the cost from the sale
of the home then they can go after other assets.
Click to expand...
[emphasis added by bubba]

your presentation is absolutely bogus

the reverse mortgage holder can recover the outstanding balance of the mortgage from the sale of the home
there is no other collateral available to that mortgage holder from which to recover the debt

it amazes me the amount of nonsense in your post; do you make this **** up?
 
Sound advice:

"You still pay for property taxes, insurance and the costs of maintaining the home. The lender can foreclose if you don’t. Also, because interest accrues over the life of the loan, your debt can ultimately exceed the value of your home."

"The U.S. Government Accountability Office last year found dozens of misleading marketing claims about reverse mortgages in materials distributed by several large lenders. We’ve already debunked the first two:
Lifetime income – Income from a reverse mortgage stops if you sell your house or move.
Never lose your home – You can lose your home if you can’t afford to pay taxes, insurance, or maintain the home.
Never owe more than the value of your home – If your loan exceeds the value of your home, you or your heirs will have to make up the difference if the home isn’t sold when the loan is due.
False implications that a reverse mortgage is a government benefit rather than a loan – Some lenders even use government logos to convince you to buy.
If you or anyone you know is considering a reverse mortgage—stop now! If money is short, cut back on your lifestyle. Sell your house and get something more affordable to free up money for your needs."

https://www.daveramsey.com/blog/the-ugly-truth-of-reverse-mortgages

"“Always explore all other sources of income first before tapping into your home equity,” advises Cook. “Liquidate your portfolio and cut down on your living expenses. If you still don’t have enough, a reverse mortgage may make sense.”"


Reverse Mortgage -- What Is It, How Does It Work, And More | Bankrate.com

https://www.hud.gov/program_offices/housing/sfh/hecm/rmtopten

imo, reverse mortgage is a bad idea. If you need more money in retirement, change your lifestyle, downsize and sell your home. Use that money to live.
 
mike2810 said:
Sound advice:

"You still pay for property taxes, insurance and the costs of maintaining the home. The lender can foreclose if you don’t. Also, because interest accrues over the life of the loan, your debt can ultimately exceed the value of your home."

"The U.S. Government Accountability Office last year found dozens of misleading marketing claims about reverse mortgages in materials distributed by several large lenders. We’ve already debunked the first two:
Lifetime income – Income from a reverse mortgage stops if you sell your house or move.
Never lose your home – You can lose your home if you can’t afford to pay taxes, insurance, or maintain the home.
Never owe more than the value of your home – If your loan exceeds the value of your home, you or your heirs will have to make up the difference if the home isn’t sold when the loan is due.
False implications that a reverse mortgage is a government benefit rather than a loan – Some lenders even use government logos to convince you to buy.
If you or anyone you know is considering a reverse mortgage—stop now! If money is short, cut back on your lifestyle. Sell your house and get something more affordable to free up money for your needs."

https://www.daveramsey.com/blog/the-ugly-truth-of-reverse-mortgages

"“Always explore all other sources of income first before tapping into your home equity,” advises Cook. “Liquidate your portfolio and cut down on your living expenses. If you still don’t have enough, a reverse mortgage may make sense.”"


Reverse Mortgage -- What Is It, How Does It Work, And More | Bankrate.com

https://www.hud.gov/program_offices/housing/sfh/hecm/rmtopten

imo, reverse mortgage is a bad idea. If you need more money in retirement, change your lifestyle, downsize and sell your home. Use that money to live.
Click to expand...

more bogus advice
if the person is a widow with a $1000 monthly security check to live on and she has a mortgage free home it makes good sense to secure a reverse mortgage
now she will have (probably) more than $100,000 available to her from the reverse mortgage proceeds to supplement that monthly social security check
in effect, she just took out a home equity loan that she will never have to pay back
in the meantime she is still living in her home
and she only has to pay taxes, insurance, and maintenance ... as she would living in any other home
only now she has no mortgage or rent to pay and she has a substantial sum available to her to pay things that her social security check alone would not allow her to afford
 
justabubba said:
[emphasis added by bubba]

your presentation is absolutely bogus

the reverse mortgage holder can recover the outstanding balance of the mortgage from the sale of the home
there is no other collateral available to that mortgage holder from which to recover the debt

it amazes me the amount of nonsense in your post; do you make this **** up?
Click to expand...

Actually it isn't the fact is that some things change over time from what they were.
there are also different sites out there that have misleading and different information.

We know that you make pretty much everything you post up, however i rely on other sources.
if information changes then it changes. i update what i know and go on.

what is your excuse.

The fact still remains is that a reverse mortgage is a bad idea.

where it really gets messy is if one person can get the loan and the other person isn't eligible. if proper paper work is not filed every year
if the borrowing spouse dies the non-borrowing spouse can lose the home.

way to miss the main point of the argument though you keep right on doing that.
 
Last edited:
ludin said:
Actually it isn't the fact is that some things change over time from what they were.
there are also different sites out there that have misleading and different information.

We know that you make pretty much everything you post up, however i rely on other sources.
if information changes then it changes. i update what i know and go on.

what is your excuse.

The fact still remains is that a reverse mortgage is a bad idea.

where it really gets messy is if one person can get the loan and the other person isn't eligible. if proper paper work is not filed every year
if the borrowing spouse dies the non-borrowing spouse can lose the home.

way to miss the main point of the argument though you keep right on doing that.
Click to expand...

share with us the other assets you insisted can be made available to the mortgage holder to retire the reverse mortgage debt
 
justabubba said:
more bogus advice
if the person is a widow with a $1000 monthly security check to live on and she has a mortgage free home it makes good sense to secure a reverse mortgage
now she will have (probably) more than $100,000 available to her from the reverse mortgage proceeds to supplement that monthly social security check
in effect, she just took out a home equity loan that she will never have to pay back
in the meantime she is still living in her home
and she only has to pay taxes, insurance, and maintenance ... as she would living in any other home
only now she has no mortgage or rent to pay and she has a substantial sum available to her to pay things that her social security check alone would not allow her to afford
Click to expand...

lets see respected professional money manager vs you random internet poster?
hmmm we will go with the respected professional money manager.
 
ludin said:
lets see respected professional money manager vs you random internet poster?
hmmm we will go with the respected professional money manager.
Click to expand...

nice appeal to (misplaced) authority you have going on there


still waiting for you to share with us what assets - other than the home mortgage - are made available to the mortgage holder to satisfy the outstanding reverse mortgage obligation
 
My mom and step-dad got one of those without asking any of us kids. They are now close to needing to move into a place where they can have some level of elder care and we are trying to figure out how to get them out of it. They leave the house - they lose it. We need to sell it and pay off the rev. mort. Without them "moving out". I think we have a decent scheme, but it's going to be a logistical mess.

Be VERY careful. Personally, I consider them bad in most instances.
 
<alt>doxygen said:
My mom and step-dad got one of those without asking any of us kids. They are now close to needing to move into a place where they can have some level of elder care and we are trying to figure out how to get them out of it. They leave the house - they lose it. We need to sell it and pay off the rev. mort. Without them "moving out". I think we have a decent scheme, but it's going to be a logistical mess.

Be VERY careful. Personally, I consider them bad in most instances.
Click to expand...

if requested, you will normally be provided 12 months to repay the outstanding reverse mortgage to avoid a foreclosure by the mortgage holder
in that time you should be able to sell the home and pay the balance - if there is equity available in the home
 
If your parents move to an assisted living facility, just sell the house. Not a big deal.
 
justabubba said:
nice appeal to (misplaced) authority you have going on there
Click to expand...

YOu evidently don't know what an appeal to authority is. An appeal to authority argument would be if i had said Person X knows more about it than you and person X is not an expert in this field.

Using an authority as evidence in your argument when the authority is not really an authority on the facts relevant to the argument.

so you fail here. Dave Ramsey is an expert in this field.
He was a 1982 graduate of the College of Business Administration at University of Tennessee, Knoxville with a degree in Finance and Real Estate.

still waiting for you to share with us what assets - other than the home mortgage - are made available to the mortgage holder to satisfy the outstanding reverse mortgage obligation
Click to expand...

I already posted the .gov link you should read the thread.
 
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