emzee
california
Senior Member
Joined: 10/22/2006
View Profile
 Offline
|
Has anyone investigated reverse mortgages. Do you have any opinions on them. I have a friend who was looking into something like this. I personally don't think they are a good way to go.
|
msmith1199
Central, CA
Senior Member
Joined: 10/07/2001
View Profile
|
I have investigated them, but probably not in the same way as you are talking about. I have conducted criminal investigations related to complaints. I have never found a problem with them and they may be the right choice for people. Every situation is different. If they are done right the only people who lose out are your heirs. My parents and my in-laws both live in houses that are fully paid for. If it stays that way then some day I may receive an inheritance from that. In the meantime if either needs the money and wants to do a reverse mortgage than I'm all for it. It's their money.
I should note that of the criminal investigations I have done all of the complainants were kids of the people who did the reverse mortgage once the kids realized it was cutting in to their inheritance.
* This post was
edited 01/26/12 04:32pm by msmith1199 *
2004 National Tropi-Cal T-350, Class A, Triple slide, 330 HP Cat DP.
2006 Dodge Dakota 4x4 or
2002 Harley FLSTF Fat Boy on a Trailer or
2004 Polaris Quad on the Trailer
|
rockportrocket
on hyway 77
Senior Member
Joined: 11/15/2011
View Profile
Offline
|
Ive have studied them from front to back. If you have no heirs, why not? You gonna leave it to the state?
|
lawnspecialties
Garner, NC
Senior Member
Joined: 02/09/2009
View Profile
Good Sam RV Club Member
Offline
|
rockportrocket wrote: If you have no heirs, why not? You gonna leave it to the state?
1. That's the first point.
2. Most have ridiculous up-front fees. They rip you off with those fees they take out of the house.
2011 Ford F450 4X4 6.7L (the strongest and nicest truck I've ever owned)
2011 Cyclone 370C Full Throttle (a $55,000 45' "what's gonna break next" toy hauler)
2009 Kawasaki KFX450R
2012 Honda 400X
2009 Suzuki LTZ 90
"Can we ever have too many toys?"
|
Mootpoint
Brentwood Bay, B.C.
Senior Member
Joined: 07/31/2006
View Profile
Good Sam RV Club Member
Offline
|
And you can't refinance without their permission..
|
|
|
emzee
california
Senior Member
Joined: 10/22/2006
View Profile
Offline
|
lol these are all things I have told him. I was curious if anyone ever got/tried one. I guess most of us here are too smart.
|
coolbreeze01
Redding, Ca
Senior Member
Joined: 08/24/2006
View Profile
|
Might work if they need the income to buy groceries.
2008 Dodge 3500 CTD LB SRW 4X4 6-Speed Auto
Prodigy P3, Blue Ox Sway Pro, 225 75R 15E Maxxis
2007 Komfort 212
|
msmith1199
Central, CA
Senior Member
Joined: 10/07/2001
View Profile
|
It's not about being too smart, it's about whether you really need the money or not. And like somebody else said, if you have no heirs (or you have none you want to leave your house too) it may almost be a no brainer. You get your money to spend, you get to stay in your house.
Remember companies are taking a big risk here because only the house secures their loan and nothing else. What if you take $200,000 out of your house when you are 65 in a reverse mortgage. Then you live to be 105. That's 40 years you get to have that money with no payments. In 40 years the balance owing on the loan will probably be two million dollars. If the house is worth $300,000 that's all the mortgage company gets. If you have other assets your family still gets all those.
|
msmith1199
Central, CA
Senior Member
Joined: 10/07/2001
View Profile
|
I should also note that you can set these mortgages up in a lot of different ways. You don't have to take a lump sum. For example you're retired and you find out social security and your 401k just isn't cutting it. You can get a reverse mortgage and set it up to pay you $1000 a month until the credit limit is reached. If the mortgage has a $200k limit, then you get your $1000 a month for over 16 years. Doing it this way the interest only accrues on the balance. So if you croak in five years the balance is $60,000 plus whatever interest has accumulated.
It really may not be as bad of a deal as you think, depending on a person's individual circumstances. I've known of people who did them and used the money to travel and do some bucket list type things. Is that a good use? That's up to the person getting the loan to decide. They probably would not have been able to do those things without the reverse mortgage.
|
emzee
california
Senior Member
Joined: 10/22/2006
View Profile
Offline
|
msmith, just thinking, and you're absolutely right. If you have no one in particular to leave the house to it would be a good idea. I think getting a good real estate lawyer involved wouldn't hurt. I know the surviving spouse can remain in the home. There are too many variables for me, not one of the sites I looked at gave me a cut and dry answer.
|
|
|
