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Old 04-09-2014, 04:53 PM
 
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I understand the idea- I use some of the equity in my house to improve my standard of living in retirement, and I don't make payments. My estate has to pay it off, but the house should have gone up in value in the meantime.

Has anyone a more detailed description?
Do they take various different forms?
How do the interest rates compare with normal mortgages?

Do you have one and how is it working for you?

Thanks for your help!
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Old 04-10-2014, 07:06 AM
PDD
 
Location: The Sand Hills of NC
8,774 posts, read 14,903,489 times
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Quote:
Originally Posted by Geezerrunner View Post
I understand the idea- I use some of the equity in my house to improve my standard of living in retirement, and I don't make payments. My estate has to pay it off, but the house should have gone up in value in the meantime.

Has anyone a more detailed description?
Do they take various different forms?
How do the interest rates compare with normal mortgages?

Do you have one and how is it working for you?

Thanks for your help!
The upfront charges are pretty high and the interest rate is probably high as well. But for some what is the alternative?
We took out a reverse mortgage about 15 years ago when I first became disabled and my private disability insurance ran out. We had a lot of equity in our house buy no cash in the bank to pay the daily expenses and I didn't want to cash in my IRA.

We kept the reverse mortgage until we sold and then paid it off.

Now we are mortgage free and still have enough equity in our new home so that if we need cash for living expenses we can go for a reverse mortgage again.

Leaving any money or a house to our children is not something we are concerned about.

Pretty sad when people are sitting on money in their home and living like a pauper for the rest of their lives because they want to leave something for the kids.
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Old 04-10-2014, 02:29 PM
 
527 posts, read 1,094,168 times
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A reverse mortgage is a tool.
Like any tool, it works best fixing a specific problem. It is not a panacea and can hurt you.

Many organizations offer them, but the law is the same for all of them, so pretty much one reverse mortgage is the same as another.

You can take equity from your house, in the form of a straight check, or a check every month, or similar to a equity line of credit (as needed)

the money you get is BORROWED. It is a loan. the bank expects to get it back with interest.
the fees are on the high side for a loan mortgage.
But are pretty much standard for all reverse mortgages.

Things to watch out for
Only the husband is on the deed, wife is not but living in house.
husband dies
bank wants its money bank NOW. as all the owners as stated on the deed have passed
Wife must pay back loan, can do that from savings or sell house

It's important, that if 2 married people are living in house.
Both should be on deed.

Also even if both on deed, and husband dies. wife living in house, loan still is fine
wife has to be put in nursing home, or decides to move to another state
that triggers bank to want their money

All persons on deed must be living in house as primary home.

The amount of money you are approved for is dependent on equity, age of owners, their expected future life span
A person in their 80's will be approved for much more than someone in their 60's

But if a couple in their 80's is on SS only and is having trouble paying property taxes or utilites, food. It can be a God send for them to be able to stay in their home.
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