Do any of you have an opinion on reverse mortgages? My wife and I have no children, and really no family to give our property to. My hotrods, including the Corvette, is already "spoken for" by a friend that has helped me in so many ways, it is the only way I can pay him back.
We are thinking about a reverse mortgage on our primary property (where we live).
Any thoughts?
Thanks in advance!
reverse mortgages
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rjent
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reverse mortgages
Dick
1965 Mark VII S/N 407684
1951 10 ER S/N ER 44570 -- Reborn 9/16/14
1950 10 ER S/N ER 33479 Reborn July 2016
1950 10 ER S/N ER 39671
1951 jigsaw X 2
1951 !0 ER #3 in rebuild
500, Jointer, Bsaw, Bsander, Planer
2014 Mark 7 W/Lift assist - 14 4" Jointer - DC3300
And a plethora of small stuff .....
"The trouble with quotes on the Internet is that you can never know if they are genuine." - Benjamin Franklin
1965 Mark VII S/N 407684
1951 10 ER S/N ER 44570 -- Reborn 9/16/14
1950 10 ER S/N ER 33479 Reborn July 2016
1950 10 ER S/N ER 39671
1951 jigsaw X 2
1951 !0 ER #3 in rebuild
500, Jointer, Bsaw, Bsander, Planer
2014 Mark 7 W/Lift assist - 14 4" Jointer - DC3300
And a plethora of small stuff .....
"The trouble with quotes on the Internet is that you can never know if they are genuine." - Benjamin Franklin
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ERLover
- Platinum Member
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- Location: Greenie and Goldie Country not to metion the WI Badgers!
Re: reverse mortgages
I do not know anyone who has one but a few years ago I looked into it for my parents, at that time the interest rate was very high. I would talk to your bank about them and other options.
KNOWLEDGE AND EXPERIENCE EQUALS WISDOM. Albert Einstein
The Greatness officially starts
Greenie, Grayling, SS stand alone BS and BS SPT, jointer and belt sander, 3 Ers with Speed Changers. I think those 3 cover my ER needs, and space for them.
The Greatness officially starts
Greenie, Grayling, SS stand alone BS and BS SPT, jointer and belt sander, 3 Ers with Speed Changers. I think those 3 cover my ER needs, and space for them.
Re: reverse mortgages
I think reverse mortgages make sense for some people. I'm in a similar situation where none of the family will want my house when my Wife and I are gone, so at some point, we will probably look into it.
My plan however is to delay it as long as possible. It makes sense to leave that asset intact as long as possible and use other resources up first. If you take the reverse mortgage early and delay Social Security, you lose on the Social Security unless you live an extremely long time. Once you die, your Social Security ends, and any more value is lost. The value of the home is still there for your heirs. The same situation can happen if you have an annuity that ends at your death. To me, it makes sense to use up these other assets first and get what you earned there before going after the house asset.
As the years pass, your house value increases, and you can get more from a reverse mortgage with each year that passes. Also, you will pay less interest if you wait.
My plan however is to delay it as long as possible. It makes sense to leave that asset intact as long as possible and use other resources up first. If you take the reverse mortgage early and delay Social Security, you lose on the Social Security unless you live an extremely long time. Once you die, your Social Security ends, and any more value is lost. The value of the home is still there for your heirs. The same situation can happen if you have an annuity that ends at your death. To me, it makes sense to use up these other assets first and get what you earned there before going after the house asset.
As the years pass, your house value increases, and you can get more from a reverse mortgage with each year that passes. Also, you will pay less interest if you wait.
Re: reverse mortgages
I am a student of Dave Ramsey's financial principles. He says reverse mortgages are not a good deal. The fees are too high. I'm with garys in that I think you should look at this as a last resort. Even if you don't have heirs to leave your house to, there are probably charitable organizations that you could leave it to.
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tomsalwasser
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- Joined: Mon Feb 08, 2010 2:09 pm
Re: reverse mortgages
I am interested too. I would enjoy hearing from someone who actually has one.
Re: reverse mortgages
If you start seriously considering, you should definitely consult with a lawyer knowledgeable on the subject. My mother-in-law was considering a year or so ago, I read through the stuff including some detailed related to her house, got the heeby-jeebies.
Roy
Mark V/510, Mark V/500 with parts for 510 upgrade, bandsaw, jointer, belt sander, DC3300 w/1 micron bag
Sawstop 3HP 36" PCS w/router table insert
Home designed and built CNC router, another CNC router desktop size, Avid 5x10 Pro CNC w/ATC, CNCed G0704 milling machine
Laser engraver
Way too much other stuff and not enough space
Mark V/510, Mark V/500 with parts for 510 upgrade, bandsaw, jointer, belt sander, DC3300 w/1 micron bag
Sawstop 3HP 36" PCS w/router table insert
Home designed and built CNC router, another CNC router
desktop size, Avid 5x10 Pro CNC w/ATC, CNCed G0704 milling machineLaser engraver
Way too much other stuff and not enough space
Re: reverse mortgages
I don't have one but I instinctively did not like the concept. You know "if it sounds too good to be true, it probably is". So I jokingly asked my financial advisor when he visited one time about what he thinks. The gist of answer was that if you have absolutely no one to leave anything to and when you die the State will get everything then it MIGHT be OK. Interest accumulates from the first payout and that interest is compounded for the duration of the loan. And it is a loan that must be paid back. There are also limits as to how much you can get. The lender will not over invest. When you get to the limit the payback starts. Can you afford the payments?
Lots of things to consider. Just remember that there ain't no free lunches.
So be careful. According to my guy "If you don't really need to do it, don't.
Bill V
Lots of things to consider. Just remember that there ain't no free lunches.
So be careful. According to my guy "If you don't really need to do it, don't.
Bill V
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rjent
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- Joined: Fri Mar 14, 2014 3:00 pm
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Re: reverse mortgages
OK, some responses, thanks guys.
So far the gist of the idea is that they "lend" you about 50 percent of the value of your property. You can take a lump sum, a partial advance with a line of "credit", or a guaranteed monthly payment for life. It "costs" you nothing, you are insured to never owe more than the property is worth. For us, it seems a good fit. I don't really want to burden a young friend/niece/nephew with handling the liquidation of our property. We can comfortably live on our retirement annuities and have other assets we can liquidate at some time in the future if we need to, but a RM would supplement our income and let us do more traveling than we probably would without it. I see it as a way of reaping our "investment" in property improvements and home without adding monthly expense. You still own the home, and always will. The only way you can default is not to live in the home/property for a year, not pay taxes or insurance, or we both die. There are even provisions if only one of us is left and we need long term care (over a year) you can still retain ownership and return to your home, and the "line of credit/advance" is non taxable. I was hoping that others here had some "real" experience with this.
So far I like the idea ....
Would still like some other opinions ....
So far the gist of the idea is that they "lend" you about 50 percent of the value of your property. You can take a lump sum, a partial advance with a line of "credit", or a guaranteed monthly payment for life. It "costs" you nothing, you are insured to never owe more than the property is worth. For us, it seems a good fit. I don't really want to burden a young friend/niece/nephew with handling the liquidation of our property. We can comfortably live on our retirement annuities and have other assets we can liquidate at some time in the future if we need to, but a RM would supplement our income and let us do more traveling than we probably would without it. I see it as a way of reaping our "investment" in property improvements and home without adding monthly expense. You still own the home, and always will. The only way you can default is not to live in the home/property for a year, not pay taxes or insurance, or we both die. There are even provisions if only one of us is left and we need long term care (over a year) you can still retain ownership and return to your home, and the "line of credit/advance" is non taxable. I was hoping that others here had some "real" experience with this.
So far I like the idea ....
Would still like some other opinions ....
Dick
1965 Mark VII S/N 407684
1951 10 ER S/N ER 44570 -- Reborn 9/16/14
1950 10 ER S/N ER 33479 Reborn July 2016
1950 10 ER S/N ER 39671
1951 jigsaw X 2
1951 !0 ER #3 in rebuild
500, Jointer, Bsaw, Bsander, Planer
2014 Mark 7 W/Lift assist - 14 4" Jointer - DC3300
And a plethora of small stuff .....
"The trouble with quotes on the Internet is that you can never know if they are genuine." - Benjamin Franklin
1965 Mark VII S/N 407684
1951 10 ER S/N ER 44570 -- Reborn 9/16/14
1950 10 ER S/N ER 33479 Reborn July 2016
1950 10 ER S/N ER 39671
1951 jigsaw X 2
1951 !0 ER #3 in rebuild
500, Jointer, Bsaw, Bsander, Planer
2014 Mark 7 W/Lift assist - 14 4" Jointer - DC3300
And a plethora of small stuff .....
"The trouble with quotes on the Internet is that you can never know if they are genuine." - Benjamin Franklin
Re: reverse mortgages
I still see it as a last resort to pay the bills. You are basically selling the house for 1/2 its value. Yes, you still can live there, but it might make a lot more sense to actually sell it at full value and move into something smaller that suits your needs better. That way, you have all the cash in hand and no interest to pay on the loan.
Use all my other assets first, and keep the house for last is going to be my way.
Use all my other assets first, and keep the house for last is going to be my way.
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swampgator
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Re: reverse mortgages
Like others here, I have not liked the concept since it was implemented in the 1980's. Your situation is rather different with no heirs. However, another plus is if you should qualify for Medicaid in the future, they will have nothing to recoup upon your departure. Medicaid will put a lien on your property for 24 months after your final day. Just another issue to consider.