Pros and Cons of Reverse Mortgage.

[McKinney_5900]

I think in the case of both reverse mortgages, and annuities, the worst time to do them is when interest rates are low. One reason there has been renewed talk of RM's recently is because interest rates are really low...that favors the company financing the reverse mortgage.
Jim

This is good information to know. In my case, I retired early right before the 2008 economy cratered...not good timing. I did have a decent savings yet not for 20-30 years. I'm sorta in a special situation in that I have no heirs unless you count my siblings. They are all married with kids, and they've done savings and retirement right in the conventional sense. I doubt they'd value my homestead nor much of my worldly possessions. If they did, this old crusty batchelor would be invited for visits.

Knowing that the low interest rates now is what is spuring the RM, tells me that since I ain't hurting financially, but not living what I dreamed for retirement...I'll just wait for more prosperity in the interest rates. I was getting very interested in the reverse option lately. Better to wait.

In my case, the govt might likely get my assets anyway if I had a major health crater. My family aren't "non compassionate" mind you, but I'm in last place when it all comes down to the final stretch. Their goofiest kids will be ahead of me.

I might as well have the monthly income from a RM. I don't see the downside for me right now, except for the wait time on interest rates.

Thanks to the OP for starting this thread. I'll monitor it. Martin

 

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[bowwinkles]

A very recent experience with this type of mortgage taught me that there is good and bad associated with them. I will say that should you do decide on getting into this adventure then be very careful of the mortgage company. Do your research on the internet and if the mortgage company has the initials of WF, I would advise you to look elsewhere.

 

[BC1969]

I'm glad this post is helping folks out, I've gleaned enough info for me to tell my mother it should be okay for her.

Mile

 

[Treasure_Hunter]

Anyone contemplating reverse mortgage should talk to real estate attorney or adviser to be sure they understand what they are doing ...

 

[Peyton Manning]

well dave says it's bad mostly because of the excessive fees

better to just take out a regular mortgage

 

[Peyton Manning]

think about it, the companies that offer it ( private sector) don't do it to lose money

 

[Treasure_Hunter]

.....

 

[Treasure_Hunter]

well dave says it's bad mostly because of the excessive fees

better to just take out a regular mortgage

A reg mortgage does not pay you an income, and a line of credit requires you to make monthly payments back which defeats the purpose which is to give someone a monthly income they can count on for the remainder of their life.

All mortgages have fees, they are in it to make money...

 

[Peyton Manning]

but a reverse mortgage is not income either, it's them paying for your home in payments before you die.
Just be sure to read the small print is all I'm saying

 

[Treasure_Hunter]

but a reverse mortgage is not income either, it's them paying for your home in payments before you die.
Just be sure to read the small print is all I'm saying

I know, again I repeat my uncle used a reverse mortgage to get a steady monthly income till he died which allowed him to live more comfortable, enjoy his life and stay in the home he loved through the remainder of his life...

 

[BC1969]

Well as I understand it, when the owner of the RM passes on, their heirs have the option of paying it back to keep the home.

Mike

 

[Treasure_Hunter]

Well as I understand it, when the owner of the RM passes on, their heirs have the option of paying it back to keep the home.

Mike

Yes they do, if they choose not to the home is sold loan is repaid and any remaining funds go to the estate.

 

[BC1969]

Thanks for confirming that TH, that way my mother doesn't need to struggle. She's to proud to accept money from me or my siblings, and I want to make sure the home I grew up in stays in the family.

Mike

 

[Treasure_Hunter]

Thanks for confirming that TH, that way my mother doesn't need to struggle. She's to proud to accept money from me or my siblings, and I want to make sure the home I grew up in stays in the family.

Mike

Before signing be sure it is made clear how long you have to repay the note once it comes due....

 

[VERMONTPACKRAT]

Before signing be sure it is made clear how long you have to repay the note once it comes due....

My dads RM is due six months after the house has become vacant.

VPR

 

[hvacker]

It's usually a bad idea to borrow on equity. Home equity is a piggy bank only to be tapped in some extreme emergency. The most useless reason that some take out an equity loan is to pay bills. Do they know what the interest will add to those bills. Live within your means.
But when a person has accrued a bunch of equity and doesn't foresee giving to heirs why not tap the equity while you can.
My experience with heirs of other families is they don't value your stuff the way you do. Many times the disposal of an estate falls on the one that is willing to take it on and the others stand there with their hand out. It isn't fair or pretty. I think an inheritance can be a curse for some. In almost cases heirs will just blow your assets.

I'm one of those owners with a ton of equity that's thinking hard about my bucket list. My equity came from discipline and work that most heirs would never appreciate. I'm not a hard a$$ it's just my life experience. Someone said they wanted their last check to bounce. I'm not quite there but I do understand their attitude.