U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-02-2014, 06:41 AM
 
Location: Near a river
16,042 posts, read 18,991,724 times
Reputation: 15649

Advertisements

Clearer, thanks. Definitely worth exploring.
Reply With Quote Quick reply to this message

 
Old 07-02-2014, 05:48 PM
 
Location: Prescott AZ
6,130 posts, read 9,093,524 times
Reputation: 11545
Yes thank you Florida Happy. But what happens if I do the reverse mortgage for purchase and then after a couple years, I decide I want to move?? Will I have to pay back all the money given to me for the house? What if the house has not appreciated, but went down? And,how much in fees did you have to pay, besides the $45,000?

The more I think about this it seems like a good deal, not like the article I read above ! But I guess you need to find THE house and plan to die in it, right?
Reply With Quote Quick reply to this message
 
Old 07-02-2014, 05:57 PM
 
Location: Ocala, FL
407 posts, read 475,321 times
Reputation: 1299
Quote:
Originally Posted by PhxBarb View Post
Yes thank you Florida Happy. But what happens if I do the reverse mortgage for purchase and then after a couple years, I decide I want to move?? Will I have to pay back all the money given to me for the house? What if the house has not appreciated, but went down? And,how much in fees did you have to pay, besides the $45,000?

The more I think about this it seems like a good deal, not like the article I read above ! But I guess you need to find THE house and plan to die in it, right?
The house is still yours. Your name is the only one on the title/deed. The bank doesn't own the house. They hold a lien on it, just like a conventional mortgage. If you want to sell the house and move elsewhere, yes, you have to pay back the money, just like you would if there was a conventional mortgage on the house. Within a couple years, it shouldn't have lost so much value that you're underwater because you've put 45% down (or whatever). It's not like a no-money-down loan.

The reverse mortgage has origination fees just like a conventional mortgage. Since we got ours, they've passed limits on how much that can be charged. I think at this point it's about $6000, but don't quote me on it. We've had our mortgage going on five years now. Our house has appreciated here in Ocala to the point that if we sold it tomorrow, we'd get back our original $114,000 we put down plus a bit, even after paying the realtor. Housing has appreciated well here in horse country!

I wouldn't recommend a reverse mortgage to somebody who's a gypsy with the need to move every one or two years, but if you're planning to put down roots and stay a while, it's a good tool.

And, of course, before you buy that DLH, check out the neighborhood and make sure it's where you want to be. Having bought a house that ended up having noisy neighbors with barking dogs, when we purchased this house we came by at all hours of the day and night to check it out. In fact, the neighbors were getting ready to call the law thinking we were casing the place to rob it until we happened to stop and talk to them to get a feel for the neighborhood.
Reply With Quote Quick reply to this message
 
Old 07-03-2014, 12:45 PM
 
Location: Prescott AZ
6,130 posts, read 9,093,524 times
Reputation: 11545
Wish I could rep you again, but the MOD police won't let me. You have answered so much for me ! Thanks to you !!!!!
Reply With Quote Quick reply to this message
 
Old 07-03-2014, 01:17 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
Reputation: 15649
Quote:
Originally Posted by PhxBarb View Post
Wish I could rep you again, but the MOD police won't let me. You have answered so much for me ! Thanks to you !!!!!
I concur.
Reply With Quote Quick reply to this message
 
Old 07-03-2014, 11:00 PM
 
Location: Cushing OK
14,547 posts, read 17,563,101 times
Reputation: 16777
Just curious, is there a minimum value to the house? Mine has no morgage but is apprased about 25k. If there comes a raily day when social security isn't enough, I'm wondering if it would even be a possibility. I already know my son has no desire to move to Oklahoma.
Reply With Quote Quick reply to this message
 
Old 08-03-2014, 10:30 AM
 
97 posts, read 97,425 times
Reputation: 140
Hi all!

I can add a few things to this string, particularly in regards to a reverse mortgage for purchase:

- lenders have a minimum home value for reverse mortgages, the lowest I've seen is 40k. most require a min home value of 70k.

- closing costs for a reverse mortgage for purchase are the same as a regular reverse mortgage. (fha mortgage insurance, origination fee, third party fees such as title, appraisal, recording, ect). this does not include any fees you may incur if selling a departure home.

when doing a reverse mortgage for purchase, the money you qualify for is based on either the appraised value OR the purchase price, whichever is lower. so if the home you are buying appraises less than the purchase price, you'll need to put more money down with a reverse mortgage for purchase because you qualify for less.

the home that has the reverse mortgage must be your primary residence. therefore in most cases if you own a home and are looking to downsize using a reverse mtg for purchase, the old home would need to be sold prior to (or in conjunction with) getting the reverse mortgage. for example you could close on the sale of your departure home in the morning and buy a new home using a reverse mtg for purchase in the afternoon.

if you plan on keeping your old home (as a rental for example), the lender will most likely require income documentation proving you can maintain taxes and insurance on both properties. if you have rental properties, are in default on any federal debt, or plan on keeping your old home- I'd speak to a lender that is experienced with reverse mortgages for purchase before signing any contracts (most lenders/lo's aren't)

Look at it this way: to a seller a reverse mortgage for purchase is like someone buying your home with a 50 ltv mortgage. to a borrower it's like buying a home with all cash, then doing a reverse mortgage. only you're doing it one transaction so you save fees.

- there are no pre-payment penalties on a reverse mortgage and you can make payments in any amount at any time. so if you do a reverse mortgage for purchase, you are still able to make payments like a regular forward mortgage if you wanted to. (in which case I believe you'd have a write-off)

- I've also heard you can write off closing costs in the year you take out a reverse mortgage- but check with your cpa

- a previous poster wrote: "the payments will be based on the equity in the house and age of the oldest borrower" this is NOT true. the money you get is always based on the age of the youngest borrower, as long as he/she is over the age of 62. the younger you are, the less you get from a reverse mortgage. the interest rate also factors into how much money you qualify for.

some major changes recently went into affect in regards to underage spouses and fha mortgage insurance fees. i'll try to post later on that.

hope that helps!
Reply With Quote Quick reply to this message
 
Old 08-03-2014, 10:32 AM
 
71,763 posts, read 71,853,273 times
Reputation: 49311
so you want a positive reverse mortgage story??????? okay , i am postive i don't want one.
Reply With Quote Quick reply to this message
 
Old 08-03-2014, 04:00 PM
 
Location: State of Waiting
607 posts, read 763,836 times
Reputation: 1392
a lady that I work with has a reverse mortgage. She and her husband had no 401K, almost no retirement money (she is still working at 67). she told me THANK GOD for the reverse mortgage, otherwise they would have had to downsize (from an already small house) and move to an apartment. her husband is ill, and the reverse mortgage PAYS THEM every month. I think they have it for 30 years, but not 100% on the term of the reverse payout.

I don't think many of the posters here truly understand the concept. If you are a single person, I say take the reverse mortgage and go blow some of your hard earned money on yourself, and still keep living in your nice house! Worth investigating.
Reply With Quote Quick reply to this message
 
Old 08-03-2014, 05:12 PM
 
Location: Toronto, Ottawa Valley & Dunedin FL
1,409 posts, read 2,356,695 times
Reputation: 1159
Quote:
Originally Posted by FloridaHappy View Post
...
Why, oh, why, pray tell, would somebody sell a paid-for house and then go rent somewhere? You have to pay the rent or get evicted. The landlord is always up your butt. The neighbors may not be people you want to live next door to. The object is not to have a monthly housing expense!
Because you get to pocket your equity from the sale!
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top