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Old 09-06-2014, 02:34 PM
 
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I think I may buy my final home using a reverse mortgage. Or, if I buy before age 62, buy traditionally but plan to owe about half the value when I reach 62, and take a reverse mortgage at that time.

The benefit I see is that I would have no mortgage payments while keeping half the home price invested.

Thoughts?
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Old 09-06-2014, 02:54 PM
 
Location: The Triad (NC)
28,489 posts, read 62,120,010 times
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Quote:
Originally Posted by Petunia 100 View Post
...if I buy before age 62, buy traditionally but plan to owe about half the value...
Thoughts?
Nothing wrong with having a mortgage IN retirement...
but only if you have real income to pay with and it's done for cash flow reasons.

iow... don't take on the debt just because you need a roof over your head.
About the only thing worse to do is a reverse mortgage.
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Old 09-06-2014, 05:50 PM
 
Location: Ocala, FL
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We bought our house with a reverse mortgage. DH was 64 and we put down about 45%. I'm not on the mortgage or the house as I'm not 62 yet. We may or may not refinance it when I turn 62, not sure yet, but if he passes I have enough life insurance on him to pay it off. The bank will give me at least a year to decide what I'm going to do, whether I pay it off, sell it and take the equity to buy another smaller house for myself, or just hand it to the bank if it's not worth what's owed on it when he dies. No repercussions on me regardless of what I decide. After four years, we still owe way less on it than it's worth, so there's still equity. It's great not to have a huge house payment hanging over our heads. We have to pay the taxes and insurance and upkeep, which you'd have to pay whether you owned it free and clear or had a regular mortgage anyway.

A lot of the naysayers on here have no real clue what a reverse mortgage actually is/does. Do your own research and make your own decision.
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Old 09-06-2014, 06:38 PM
 
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Quote:
Originally Posted by MrRational View Post
Nothing wrong with having a mortgage IN retirement...
but only if you have real income to pay with and it's done for cash flow reasons.

iow... don't take on the debt just because you need a roof over your head.
About the only thing worse to do is a reverse mortgage.
I don't want to have a mortgage in retirement, though.

Can you explain why you think taking a reverse mortgage is the worst thing to do?
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Old 09-06-2014, 06:44 PM
 
8,822 posts, read 5,123,147 times
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Quote:
Originally Posted by FloridaHappy View Post
We bought our house with a reverse mortgage. DH was 64 and we put down about 45%. I'm not on the mortgage or the house as I'm not 62 yet. We may or may not refinance it when I turn 62, not sure yet, but if he passes I have enough life insurance on him to pay it off. The bank will give me at least a year to decide what I'm going to do, whether I pay it off, sell it and take the equity to buy another smaller house for myself, or just hand it to the bank if it's not worth what's owed on it when he dies. No repercussions on me regardless of what I decide. After four years, we still owe way less on it than it's worth, so there's still equity. It's great not to have a huge house payment hanging over our heads. We have to pay the taxes and insurance and upkeep, which you'd have to pay whether you owned it free and clear or had a regular mortgage anyway.

A lot of the naysayers on here have no real clue what a reverse mortgage actually is/does. Do your own research and make your own decision.
Thank you for sharing your experience. It's nice to read of an instance where an RM was used to advantage.

I asked this question on another forum and some responses were borderline hostile. I don't know why RM's inspire that reaction, but they certainly seem to.
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Old 09-06-2014, 06:53 PM
 
Location: The Triad (NC)
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Originally Posted by Petunia 100 View Post
I asked this question on another forum and some responses were borderline hostile.
I don't know why RM's inspire that reaction, but they certainly seem to.
Probably because 99% of those who use them are financially incompetent.
Perhaps you and FLHappy are the exceptions to that. I hope so.

As for me... I'm a big fan of NO DEBT generally, especially not in retirement,
and house/RE value kept at a modest percentage of total assets.
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Old 09-06-2014, 07:27 PM
 
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Originally Posted by MrRational View Post
Probably because 99% of those who use them are financially incompetent.
Perhaps you and FLHappy are the exceptions to that. I hope so.

As for me... I'm a big fan of NO DEBT generally, especially not in retirement,
and house/RE value kept at a modest percentage of total assets.
I see them as a tool. Like any tool, they are useful in some situations and not useful in others.

Ideally, I would not need to use one. But, things don't always turn out ideally.

I want to retire with no mortgage. To accomplish that, it looks to me as though my choices are going to be buy a 1 br condo style apartment outright, or buy a small but nice sfh with a reverse mortgage. I am leaning towards the sfh with an RM.

It is still a few years off, so things could go better than I expect.
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Old 09-06-2014, 08:13 PM
 
Location: The Triad (NC)
28,489 posts, read 62,120,010 times
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Quote:
Originally Posted by Petunia 100 View Post
Can you explain why you think taking a reverse mortgage is the worst thing to do?
Too often that the house has already been paid off. Usually for quite some time.
Doing **anything** that would put that basic asset at risk is by definition a bad, bad thing.
I'm not a fan of people with tenuous financial circumstances doing bad, bad things.

Quote:
Originally Posted by Petunia 100 View Post
...it looks to me as though my choices are going to be buy a 1 br condo style apartment outright,
or buy a small but nice sfh with a reverse mortgage. I am leaning towards the sfh with an RM.
A third option: Come live with me in my all paid for sfh and not worry about mortgages.
Fourth: Go in together on a place in Cayucos or San Luis

http://www.youtube.com/watch?v=a7a35GnfPTc

Last edited by MrRational; 09-06-2014 at 08:35 PM..
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Old 09-06-2014, 09:07 PM
 
8,822 posts, read 5,123,147 times
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Why, MrRational, are you flirting with me?
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Old 09-06-2014, 09:22 PM
 
Location: Near a river
16,042 posts, read 18,969,510 times
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Quote:
Originally Posted by Petunia 100 View Post
Why, MrRational, are you flirting with me?
He wants a housekeeper and cook.
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