Reverse Mortgages. Anybody have any experience with them? If so, how do

[patricia92243]

you like it and would you recommend them?

I am just starting to look into a reverse mortgage on my house and was wondering if other people had any ideas or information that I might need to know.

I'm not sure this is the right place to post this.

Thanks for any help.

[FloridaPat]

1. Is your house paid off? I haven't had any experience with them

or know of anyone who has. But if your house is paid off and considering the economy is "slowing", I wouldn't put my home in a situaltion where I could loose it. Of course, that would depend on the contract too.

[lumberjack_jeff]

3. It's not a bad idea, actually.

The best rationale for not doing it is if you want to leave the house to the kids.

For many people, the alternative is either living in a house for which you can't afford to pay the taxes nor eat, or selling the family home to move to cheaper digs.

A $1m house (not that uncommon any more) will yield a $5600 income stream for 30 years.

In a reverse mortgage, the bank buys your house in installments. When they make the last installment, the house becomes theirs.

If the mortgagor is 80, there's little risk that they'd lose the house. It's a little riskier when the mortgagor is 50 or 60.

[DrDan]

5. I understood there was a provision in these that

you could remain in the house as long as you were alive . . .

[lumberjack_jeff]

6. You're probably right. I would imagine that most are sold that way

The demographic to whom these are marketed would be averse to that risk.

Me? If I lived 30 years after taking on a reverse mortgage, I'd be amenable to a change of scenery. :)

[troubleinwinter]

7. WRONG.

You cannot lose your home as long as you choose to live in it!!!

The home does NOTTT have to have been paid off! There can be outstanding mortgages.

The banks do take some risks, if you live very long. BUTTTT if there is EQUITY remaining in the home after the reverse mortgage is paid, the heirs still get that excess amount.

My mother-in-law was badly in debt. She could no longer pay her bills. She got a reverse mortgage which paid off her 1st and 2nd mortgages and credit cards. Now she is able to get by with her retirement income, with no bills to pay.

I encouraged my father to look into a RM. The local banks or program require that a person attend a seminar to look at the various programs. There are different programs: Monthly income or one-time lump.

These programs were developed to KEEP ELDERS IN THEIR HOMES. There are some wonderful programs! Some are not too great. But one will NOT ever lose the home while they care to reside in it.

You must be (I think) 64 to do it. If the home's value equity exceeds the amount borrowed, the balance is NOT taken from the estate.

I advocated and worked with Seniors for years, and this is a GREAT program! If you know a senior who owns a home and is having financial challenges, I URGE you to look into these programs!

Yes, the "childrens' inheritance" may be spent down... SO!?

There are a limited number of banks/lending institutions that are approved to participate in the RM programs. There are programs that are great, and some that are not so great, so they must be compared.

Seniors should not have to suffer needless financial poverty when they can arrange to have debts/mortgages paid off and/or receive monthly income (for phone, energy bills, etc.)! The money can be used for whatever they want, but mortgages will be paid off first.

ONLY certain approved banking institutions can offer these loans, not any old scuzzy lender.

So many seniors are struggling financially, yet bought their homes for maybe $75,000, but now it's worth $200,000. A large portion of the $125,000 difference is available to them either in lump or in monthly income through a RM. If the senior opts to take $50,000, ONLY that amount, with normal interest will be repaid, the balance goes to the estate/family/heirs. It is likely best to take monthlies (enough to cover any mortgage payments, bills + what the person wishes in added income), or the ENTIRE lump amount and bank it, because one can only do a reverse mortgage ONCE.

Again, If you know a senior who owns a home and is having financial challenges, I URGE you to look into these programs!

[troubleinwinter]

8. Please read post #7

[sam sarrha]

2. i guess you need to set it up so you wont be homeless before you die

[Warpy]

4. The up side is that you'll have enough to live on

if your pension has died before you retire, something that will face a majority of boomers, I'm afraid. A reverse mortgage can carry you through at least a couple of decades.

The down side is that you'll have nothing to leave your heirs but the debts that arise from your death.

[troubleinwinter]

9. YES

Please see post#7. Are you of the age that qualifies?

[yy4me]

10. Yes, we took out a reverse mortgage a year ago. It is a good

program to give you some financial security as you age. My better half is 72, I am 64. Although we have no great debt, we have used most of our savings, meager as they were, just trying to keep up with high property taxes, utility bills, ridiculous insurance bills for health for me, home owners, auto insurance, a dead car, a blown furnace and other things that have gone wrong these last few years. The cost of living is just too much and I had to go back to work and was then laid off. I was such a nervous wreck that we looked into the program after getting a mailing from AARP. It is expensive up front plus there is a monthly charge just like a conventional mortgage. The monies used are taken off the other end. If we sell the house, or when our estate is liquidated, the money must be repaid either from sale proceeds or from our estate. You must meet with approved councilors before the process is started. The paperwork is a bear. But once done, that is it. We took a little money at the initiation of the mortgage and had to take a little more for a new furnace. The company that handles the mortgage sends a monthly statement with all relevant information.