Has Anybody Here Done a Reverse Mortgage?

SeaBreeze

SeaBreeze

Endlessly Groovin'
Location
USA
I don't know much about this, and would probably never do it unless I was hard up for the money. Anybody here do a reverse mortgage, are you happy you did? More info here.

You may be surprised to find out how much money seniors can receive through a Reverse Mortgage.Still unknown to many, this brilliant retirement method is helping senior citizens across the country by eliminating their monthly mortgage payments and putting cash in their bank account through what’s called a “Reverse Mortgage Loan”. You can bet that your current mortgage holder might not be too thrilled about this, since they would be losing your business.
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IMO it is better in the long run for a senior citizen to face facts and adjust to a reduced income instead of trying to maintain a lifestyle that they can no longer comfortably afford.
 
bad idea . reverse compounding interest is not your friend . it eats up equity very quickly along with the fees and expenses .

the part folks do not realize until it is to late is every agreement stipulates to the lender that you will keep that house maintained in top shape or they can call the loan in .

the lender does periodic inspections and can order you to do major repairs no matter how strapped for cash you are .
 

I have to agree with Aunt Bea at this point.

I have heard that a reverse mortgage is a loan against the equity of your home. Low equity would mean a low amount loaned. It may run out before you leave.

My condo has devalued a lot since I bought it; hardly any equity.

This is what I've heard from other people, not from a bank so maybe I am wrong.
 
you can't have low equity . any outstanding mortgage has to be paid off by the loan money . they only loan up to about 1/2 the value of the house so you can eat up that money in no time .

another problem is the majority of reverse mortgage receivers are now taking lump sum.

that reverse compounding interest can be killer.

even here in long island with the typical home worth more than 500k it can be quite painful.

On a $250,000 lump-sum in ten years the balance will climb to $465,841. Assuming 3% home price appreciation, that would leave about $72,000 in equity based on a home's $537,566 value. In 20 years, the loan balance would reach $868,031, exceeding the home's $722,444 value.

having to relocate can be a real issue . don't forget eventually many who live out of state want to move closer to kids and family if they need care.

there are just so many negatives to using your home as a piggy bank that we all could make a never ending list as life plays out. many who took these loans just have not reached the point where their location has been a problem health wise or family wise yet..
 
I don't know much about it, but everything I ever heard is that it is a BAD idea. Too many pitfalls! Sounds like you will be in worse shape after than before.
 
Finding a decent reverse mortgage can be a real hassle. Anything advertised on TV, or just diving into the Yellow Pages will probably result in a dissapointment. My folks took one out in their later years, but luckily my Sister had worked in the banking and mortgage business and she did some careful research and found a plan that allowed Mom and Dad to live in their home, well cared for, in dignity, in their final years. They had a team of 3 ladies who lived with them on a rotating daily basis, and took care of the house, and meals, etc. and even took them to the doctors, etc. Dad lasted about 2 years and Mom about 3 years, after they took out the plan, and the policy paid for all the ladies care, and still left a nice home value that Sis and I split when the folks both passed.

Anyone contemplating such a plan MUST contact several sources, and do some Very Careful research. There are a few such plans that are quite good, but they are overshadowed by the bulk which only seek to "milk" the Seniors.
 

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