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Old 05-29-2012, 01:01 PM
 
4,517 posts, read 11,469,653 times
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Quote:
Originally Posted by Huckleberry3911948 View Post
r u saying that when they die the house does not go to the bank but is sold and proceeds used to pay the loan and what is left over goes to the kids? please clarify, people need to know.
CORRECT! It is just like any other estate deal. The house goes to the estate. The property is sold, the reverse mortgage + accumulated interest is paid off and the remainder would go to the kids (or whoever the beneficiaries are).
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Old 06-03-2012, 04:24 PM
 
78 posts, read 84,526 times
Reputation: 128
the fees in that example seem high.
there are 3 parts to reverse mortgage closing costs:
1- origination fee. anywhere between 2500-6000 depending on home value. calculated by charging 2% of the first 200K of home value, then 1% of value over 200K. as other posters have said, this fee is negotiable. especially if you opt for the fixed int rate.

2- Mortgage Insurance- 2% of the appraised value of the property (unless property value is over 625,500- then the mip is based on 2% of 625,500). This fee goes to the fha not the lender. it makes the loan non recourse.

3- third party closing costs- title insurance, notary fees, recording fees, appraisal, mortgage counseling, ect. you can shop for your own providers for these to save money.

there is also a program called the hecm saver. instead of a 2% mortgage insurance fee, you pay .01%. the trade off is you get less proceeds avalable to you.

inspite of what your loan officer will tell you, interest rates and margins can be negotated with the lender. i've seen fixed rate hecms from 4.25%-5.56%. I've also seen margins on the adjustable rate hecm's from .5-3.5.

banks make more money if you take a fixed rate, so they'll be more willing to eat fees. however in order to get a fixed rate, you need to cash out everything you qualify for- which isnt the best option for some people.


re paying off a reverse- there are no pre-payment penalties. you can also make payments in any amount at any time durring the course of the loan. when the borrower no longer occupies the home, the heirs can either refinance and keep the property, or sell it to pay off the mortgage. if more is owed on the mortgage then the home is worth, heirs can just walk away. this is what the mortgage insurance covers
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Old 06-10-2012, 08:06 PM
 
1 posts, read 2,042 times
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my friends husband passed away about 5 years ago....He had S.S.I ..How do we find out if she owes any back money?.....They paid cash for there home 15 years ago. she has know papers about this.
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Old 06-12-2012, 11:08 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,182 posts, read 17,252,649 times
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Quote:
Originally Posted by berb1981 View Post
my friends husband passed away about 5 years ago....He had S.S.I ..How do we find out if she owes any back money?.....They paid cash for there home 15 years ago. she has know papers about this.
What?

Are you saying that your friend paid cash for a house 15 years ago and later took out a reverse mortgage? If the answer is "yes", then she owes money WHEN she sells the house. Or when she dies and the estate sells the house.
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Old 06-13-2012, 08:53 PM
 
833 posts, read 1,406,800 times
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I've heard nothing but bad about reverse mortgages.

I don't know if all are true, but I believe............... " where there is smoke there is fire "

No thanks !
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Old 06-13-2012, 09:56 PM
 
Location: Ocala, FL
388 posts, read 433,160 times
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We bought our house using a reverse mortgage. Put down $112,500 on a $245,000 property and never have a payment. We pay the taxes, insurance, and upkeep, just like we would have had to do if we'd taken out a mortgage with payments. It's our house. Nobody is kicking us out in the street. I'm not on the house as I'm not 62 yet, but I have enough life insurance on DH to pay it off if he should pass. When I turn 62, we can refinance it and we both can live here until we die. Nobody will kick us out no matter how high the mortgage gets. I don't see a darn thing wrong with it. And instead of shoveling money at a bank, we can go out to eat, buy groceries, or, heck, turn the A/C or heat on depending on the time of year. If I want new sneakers I can buy a pair without worrying about Bank of America trying to foreclose on me.

DH's sister just got a reverse mortgage on the property they inherited to pay him off for his half of the house. She didn't seem to have a problem with it.

If an elderly person is living on canned cat food or needs medications and has a paid-for or close-to-paid-for house, it's stupid to worry about closing costs when he/she can get the rest of the equity out and have a decent life. To heck with leaving the house to the kids, you've got to look out for yourself day to day. The kids aren't there buying groceries or paying the bills unless they're unusual this day and age. Actually they're probably there living off the old person and not contributing a dime, just gimme gimme gimme.

People who claim to hear "nothing but bad" about reverse mortgages are uninformed as to their true nature. Probably sitting in Hardee's or McDonald's gossiping with other uninformed people instead of talking to someone who is in the know. Before you form an opinion, do some research!
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Old 06-14-2012, 06:21 AM
 
833 posts, read 1,406,800 times
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Quote:
Originally Posted by FloridaHappy View Post
We bought our house using a reverse mortgage. Put down $112,500 on a $245,000 property and never have a payment. We pay the taxes, insurance, and upkeep, just like we would have had to do if we'd taken out a mortgage with payments. It's our house. Nobody is kicking us out in the street. I'm not on the house as I'm not 62 yet, but I have enough life insurance on DH to pay it off if he should pass. When I turn 62, we can refinance it and we both can live here until we die. Nobody will kick us out no matter how high the mortgage gets. I don't see a darn thing wrong with it. And instead of shoveling money at a bank, we can go out to eat, buy groceries, or, heck, turn the A/C or heat on depending on the time of year. If I want new sneakers I can buy a pair without worrying about Bank of America trying to foreclose on me.

DH's sister just got a reverse mortgage on the property they inherited to pay him off for his half of the house. She didn't seem to have a problem with it.

If an elderly person is living on canned cat food or needs medications and has a paid-for or close-to-paid-for house, it's stupid to worry about closing costs when he/she can get the rest of the equity out and have a decent life. To heck with leaving the house to the kids, you've got to look out for yourself day to day. The kids aren't there buying groceries or paying the bills unless they're unusual this day and age. Actually they're probably there living off the old person and not contributing a dime, just gimme gimme gimme.

People who claim to hear "nothing but bad" about reverse mortgages are uninformed as to their true nature. Probably sitting in Hardee's or McDonald's gossiping with other uninformed people instead of talking to someone who is in the know. Before you form an opinion, do some research!

The " bad " I keep hearing about are the very steep fees associated with a reverse mortgage.

They were pointed out by posters here ( not by people at McDonalds)
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Old 06-15-2012, 01:23 PM
 
Location: Pie shape
5,665 posts, read 8,204,035 times
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Interesting thread. I was just talking to my mother about this as a potential good idea. She has no mortgage, but she was concerned about having nothing to leave to my sister and I. I told her I couldn't care less and would rather that she is able to enjoy her retirement/have a decent financial future (she's 71 and retired). Not sure my sister would agree with me, but that's besides the point. Anyway, it seems like a very good idea but my mother was concerned that if she wanted to move she would have a problem - is that the case? Sounds like it isn't.

I have other relatives who did this recently and I think it's working out well for them.
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Old 06-16-2012, 12:10 AM
 
Location: Ocala, FL
388 posts, read 433,160 times
Reputation: 1176
Quote:
Originally Posted by NorasMom View Post
Interesting thread. I was just talking to my mother about this as a potential good idea. She has no mortgage, but she was concerned about having nothing to leave to my sister and I. I told her I couldn't care less and would rather that she is able to enjoy her retirement/have a decent financial future (she's 71 and retired). Not sure my sister would agree with me, but that's besides the point. Anyway, it seems like a very good idea but my mother was concerned that if she wanted to move she would have a problem - is that the case? Sounds like it isn't.

I have other relatives who did this recently and I think it's working out well for them.
It's still her house. She can sell it at any time. It's like owning a house with a mortgage you make payments on. You can sell that house any time and just pay off the mortgage. Same with the reverse mortgage...sell the house, pay off the note, and put the equity in her pocket.

You and your sister would have a year to decide what to do with her house when she passes, if she still owns it at that time. You can pay it off and keep it, sell it and pocket the balance over the mortgage, or if she owes too much at that point just hand it to the bank, no repercussions. You and your sister are not liable for any balance due if the house doesn't sell for the amount of the mortgage.
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Old 06-17-2012, 07:00 AM
 
Location: Pie shape
5,665 posts, read 8,204,035 times
Reputation: 6148
Thanks! Good to know.
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