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If there are any seniors on here who have gotten one I would like to hear your opinions on Them.
My home is on the market at the moment but reading all the negative things on here and reading about it and hearing it on the news, I may just stay where I am and use my equite that I own before the value keeps going down.
If you have an alternative source of income, a reverse mortgage is usually not the best way to go. They are very expensive. I would suggest that you talk to a highly qualified financial adviser before going that route.
Be extremely careful to take out the equity out of the mortgage and using it. It might be easy to get the money, but you will be paying over and over for that mistake. It will cost a lot more than you think.
We owe aprox 25 k on a home equity loan and thats all. WE have a home with a tax value of aprox 200k. We are both 61 and retired soon to be getting 2 checks each a month for a total of aprox 60k a year.. Knowing this is there any reason we could use a reverse mortgage.? thanks
No. Unless you spend $80k/year. People do reverse mortgages when they have insufficient income to meet daily living expenses and, often, too much debt. That is not your situation. Reverse mortgages are an expensive, last resort tool.
We owe aprox 25 k on a home equity loan and thats all. WE have a home with a tax value of aprox 200k. We are both 61 and retired soon to be getting 2 checks each a month for a total of aprox 60k a year.. Knowing this is there any reason we could use a reverse mortgage.? thanks
How could you not use it? It frees capital. You should certinly be able to earn more on your money than you would pay in interest. And best of all you never need to pay it back unless you sell the house. As you get older you can borrow more so take what you can now and more in a few years. Fees do vary so check what different places offer.
Right now, however, only FHA loans are available. They're limited to properties five acres or less. That's why I don't have one.
the problem is they generate far less than you think.
the fees are tens of thousands of dollars. they only lend you a small part of the equity and typically the way the payments are structured they take a 100, subtract your age and then divide the remaining years by that greatly reduced amount of equity after fees. thats your check amount per year .
its usually alot less than folks counted on getting.
280k in equity may get you 140k-175k less 20k plus in fees. if your 65 that amount is divided by 35 years. if your lucky you may get 350 month.
Thats why the house offers the opportunity so they can make money. They create the vehicle and the rules on how to use it. Other wise why would they do it?
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