Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
When you say "as they come in" do you mean it hits your mailbox on the 15th due the 3rd of the next month and you pay it the 15th/16th? Or do you mean "when they're due"? I ask because you're essentially giving your creditor an interest free loan for 15 or so days when you pay them "as they come in".
Somehow I don't worry about giving my electric/gas company a $120 "loan" by paying my bill early. I'm like the other poster; I like to get my bills paid as soon as they come in so they aren't hanging over my head. It's not like I would get several dollars in interest from my bank by hanging onto that $120 for 15 more days.
When you say "as they come in" do you mean it hits your mailbox on the 15th due the 3rd of the next month and you pay it the 15th/16th? Or do you mean "when they're due"? I ask because you're essentially giving your creditor an interest free loan for 15 or so days when you pay them "as they come in".
As soon as they hit my mailbox. My total monthly "bills" (not counting things like groceries, that get paid up front, and not counting the mortgage which autopays just before the due date) are only around $800 average per month. So if I paid everything 2 weeks later, my account would average $400 higher each month than it does. Interest on $400 is less than $.02/month. We're talking pennies (definitely less than a dollar) a year in lost interest at current rates. I'm definitely willing to pay a dollar a year to keep my excellent credit score and never risk having a bill be late to anyone, ever. Besides that, missing one deadline on a payment will cost me a whole lot more in penalties/interest/late fee than $1.
I never really got the save up for retirement thing.
My family rarely lives beyond 65 years of age.
All that SS, 401k,down the drain.
Well that's just silly. Life expectancy goes up with each generation. Relying on antiquated results of people dying by 65 is not a good plan for 20-30 years down the road.
It's a debt to their estate. Why does that not seem to matter to people? I must be from another planet. Okay all of you are right, reverse mortgages must be wonderful things.
Don't get pissy, it's a discussion. You have a college degree, use it and discuss the topic that you raised with those with differing opinions.
As far as the reverse mortgage goes, it is not a debt to the estate. A debt is something that has to be paid. Family does not have to hit the lottery when you die. If you worked hard all your life, you deserve to spend whatever you want on whatever you want in your old age.
Don't get pissy, it's a discussion. You have a college degree, use it and discuss the topic that you raised with those with differing opinions.
As far as the reverse mortgage goes, it is not a debt to the estate. A debt is something that has to be paid. Family does not have to hit the lottery when you die. If you worked hard all your life, you deserve to spend whatever you want on whatever you want in your old age.
Right, go back and read all the places where I did respond to these points. I only got pissy when people kept jumping in and saying the same thing, which had already been addressed. I recognized the "merits" people were bringing up, but to me personally, these would not be merits. to others, they seem to be. I even said "we'll have to agree to disagree." I think I've discussed the topic very fairly. Some see a debt as something that must be paid by them. I see a debt as something that must be paid out of my estate. some don't care what happens after they die, and that's fine. But I do.
To be clear:
My first opinion in my OP about reverse mortgages was: These things sound really unwise, with no apparent merits, and it's possible it's just a way to scam old people.
My opinion has been revised thanks to the posters in this thread. My opinion now is: Reverse mortgages really seem unwise to me because I place high value on not having debt and on having an estate to leave after I'm gone. But some people, in certain situations, do find merit in them. those people don't have my basic values. With my basic values, I would never be in a situation where I would find merit in them, since they seem to be a way to bail one out of a difficult situation, which in most cases is entirely preventable with good planning.
This is another one I don't get. Sure, I'm not one to got into debt to take an expensive vacation, so I'm already an odd bird. But time shares? You're not buying the house or even a part of the house. You're buying the use of a house, that other strangers will also use, for a period of time each year. Hooray!?
Every single person I know who bought a timeshare later decided they wanted to sell it, and couldn't sell it. Now they're stuck. If you like Key West, then get a hotel for 2 weeks every year in Key West. If you like St. Thomas, rent a hotel room for a few weeks every year in St. Thomas. The flexibility will be there so that you can go to a different hotel every year, not the same place. And if you suddenly decide you're not so thrilled with Key West or St. Thomas, and want to switch to visiting Punta Cana or Sedona or Vermont or wherever, then you can do that, and you're not tied to the place you used to like to visit.
It seems like every time share purchase is an impulse that people later regret and can never get out of.
Timeshares do work quite well for people that know how use it properly. I own a timeshare. I do exchanges into Manhattan, which is our favorite destination. You can buy a decent resale timeshare for less than $500, often as low as a $1. The annual maintenance fees for my timeshare are $550. I pay an exchange fee of $149 for the week in Manhattan. So we are staying in a 4* accomodations for approximately $100 /nt. One of the places we stay quite regularly is the Hilton Grand Vacation Club at the Hilton hotel on 6th avenue in mid-Manhattan. To stay in comparable accomodations, you will pay $350-450 /nt. We also go to Waikiki a lot. The same is true there except we are staying in a 2 BR 2 bath first class unit in a resort for the same $100 /nt Those are just some of the examples. I have been timesharing for 25 years.
Yes, selling them is not easy though I have done it.
Right, go back and read all the places where I did respond to these points. I only got pissy when people kept jumping in and saying the same thing, which had already been addressed. I recognized the "merits" people were bringing up, but to me personally, these would not be merits. to others, they seem to be. I even said "we'll have to agree to disagree." I think I've discussed the topic very fairly. Some see a debt as something that must be paid by them. I see a debt as something that must be paid out of my estate.
The principle you are arguing for is really the same as never having a mortgage at all. You're basically saying if you die without a completely paid off house (even w/ positive equity in it), it's a huge disservice to your kids. To be consistent, that applies to both a regular mortgage and a reverse mortgage.
Quote:
some don't care what happens after they die, and that's fine. But I do.
In the context your present this, it's a false choice.
Quote:
To be clear:
My first opinion in my OP about reverse mortgages was: These things sound really unwise, with no apparent merits, and it's possible it's just a way to scam old people.
My opinion has been revised thanks to the posters in this thread. My opinion now is: Reverse mortgages really seem unwise to me because I place high value on not having debt and on having an estate to leave after I'm gone. But some people, in certain situations, do find merit in them. those people don't have my basic values. With my basic values, I would never be in a situation where I would find merit in them, since they seem to be a way to bail one out of a difficult situation, which in most cases is entirely preventable with good planning.
Like above, do your basic values include never having a mortgage of any kind, at any age? If you retire at 60 is it totally inappropriate to take out a 15-year fixed mortgage if you move to a new place and get a great interest rate?
Also, how do you know that those situations which aren't "in most cases" aren't the majority of reverse mortgages? I do not know personally, but I would like to see a statistical breakdown of the reasons people took reverse mortgages - is it mostly really poor planning / preventable situations.... or not?
Right, go back and read all the places where I did respond to these points. I only got pissy when people kept jumping in and saying the same thing, which had already been addressed. I recognized the "merits" people were bringing up, but to me personally, these would not be merits. to others, they seem to be. I even said "we'll have to agree to disagree." I think I've discussed the topic very fairly. Some see a debt as something that must be paid by them. I see a debt as something that must be paid out of my estate. some don't care what happens after they die, and that's fine. But I do.
To be clear:
My first opinion in my OP about reverse mortgages was: These things sound really unwise, with no apparent merits, and it's possible it's just a way to scam old people.
My opinion has been revised thanks to the posters in this thread. My opinion now is: Reverse mortgages really seem unwise to me because I place high value on not having debt and on having an estate to leave after I'm gone. But some people, in certain situations, do find merit in them. those people don't have my basic values. With my basic values, I would never be in a situation where I would find merit in them, since they seem to be a way to bail one out of a difficult situation, which in most cases is entirely preventable with good planning.
But what you still don't understand is that it is NOT debt. The person owns the home and is selling it to the bank. They are NOT going into debt. They are selling their property. Selling it slowly to the bank.
Another thing: they do not necessarily have kids to leave their estate to.
So if they are NOT going into debt and they don't have any heirs you still don't share their values?
Why not? Why should an elderly person who has worked and owns their own home and perhaps has terrible medical bills not slowly sell their house back to the bank?
I personally know a few people who have considered it: One developed MS and had to go on disability at about age 55 but she has a small home, all on one floor that suits her perfectly. She bought it herself and has lived in it for years. She has said she would rather die than leave the home she loves. If she needs more surgeries (she has other medical problems now too) what would possibly be wrong with her getting a reverse mortgage to pay the medical expenses? She also has to pay someone now to help her clean the house. It's not as if she can now go out and work. Her heirs? One daughter who is a drug addict and has never been any help at all.
Someone else: A male who owns his own home, divorced a few times and had to pay alimony. Has a great job but due to the divorces, probably won't have enough money if he lives for a long time. The one wife he loved and was married to for a long time was not able to have kids. So he has no kids. So what's the reason for him to not sell his house back to the bank if he needs to? In his case, the house is more than one person needs so he'll probably buy a small condo but what's the difference whether he stays in his home and slowly sells it back to the bank or sells it all at once to someone else?
Neither of these people are crazy and neither of them have bad values. "better planning" has absolutely nothing to do with it either. Who PLANS to get divorced? Who PLANS to develop a disabling illness like MS?
As soon as I read this post, my immediate knee jerk response was "People who wait until payday to pay their bills instead of maintaining a cushion in their account", since I pay my bills as soon as they come in, and when my paychecks hit the account is irrelevant. But then the realistic part of my brain kicked in and I acknowledged that there are a very large number of people who do live paycheck to paycheck.
Keep it real, almost everybody lives paycheck to paycheck to some extent or another. How many paychecks would be irrelevant for you before you started to wonder how the bills were going to get paid? 6 months would be an impressive feat for most people, but your bank account slowly going from awesome to pathetic would be an awful thing to have to watch.
Now if you're one of those "I live off my interest" types, congratulations, you hit the gravy train somewhere along the line and you're basically in the top 1% who really don't have to work at all if they choose not to. But that doesn't happen for the vast, vast majority of people.
I see nothing wrong with a reverse mortage. I wouldn't suggest someone young do it, but a 80 year old man who has no cash left might as well. Maybe he had his retirement planned out then developed a serious health issue and wiped out pretty much all of his savings, but he is house rich and has a 300k house. Why not do a reverse mortage and get paid for 15 years at 1k a month or whatever you can get.
The guy is 80....probably won't live another 15 years if he has a serious health issue and screw the kids. The kids didn't help pay for the 300k house to begin with. Let the guy at least live an "okay" life rather than be a poor fool for 15 years.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
