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View Poll Results: Reverse mortgage after retirement?
We chose that option 3 4.35%
We are considering that option 9 13.04%
We just sold/downsized to free equity 8 11.59%
We would not consider a reverse mortgage--too favorable for lenders 49 71.01%
Voters: 69. You may not vote on this poll

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Old 11-28-2015, 07:41 AM
 
30,165 posts, read 47,394,029 times
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Has anyone in retirement actually done a reverse mortgage?
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Old 11-28-2015, 07:52 AM
 
Location: MMU->ABE->ATL->ASH
9,130 posts, read 17,167,980 times
Reputation: 9982
Not Retired but could not see doing it, Unless I never die, giving up so much equality would not make sense for me.

Maybe someone who is house rich, cash poor, and plans to die in place. But life (and Death) does not work that way. If you are in a reverse and find due to health reason, support, costs, etc. You are stuck can't move somewhere else, have no equality left to move to new place, Can't stay put, the reason you need to move still exist.

I see reverse mortgages as a trap, The homeowner does no know of till years later...
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Old 11-28-2015, 08:31 AM
 
Location: in the miseries
3,302 posts, read 3,584,621 times
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Would consider reverse mortgage as a retirement strategy.

Of last resort.
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Old 11-28-2015, 09:19 AM
 
Location: Close to an earthquake
890 posts, read 679,057 times
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Quote:
Originally Posted by luvmyhoss View Post
Would consider reverse mortgage as a retirement strategy.

Of last resort.
Agreed with the key being LAST RESORT.
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Old 11-28-2015, 09:23 AM
 
Location: Prescott AZ
6,131 posts, read 9,098,506 times
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I spent 2 hours with a reverse mortgage specialist at my home and learned alot. It used to have really bad vibes, but now it's a good way to get money out of the house (to spend) and never have to pay it back. I am interested in the RM for purchase, since I can get a better house in a new area by doing that. A RM on the present house doesnt give me enough cash. LOL
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Old 11-28-2015, 09:29 AM
 
Location: Close to an earthquake
890 posts, read 679,057 times
Reputation: 2390
Know of a close-to-home case where someone got a reverse mortgage during the real estate bubble of over a decade ago and pulled out about $250,000. Then when this person died the home, in its deferred maintenance condition, was perhaps worth $100,000 on a sunny day. It was a no brainer for the family on how to handle the situation. They grabbed a few heirlooms and photos and then called the bank informing them that the keys to the house were on the living room cabinet.

That home sat vacant for almost two years before the inefficient financial institution got it sold for, I vaguely, recall, about $120,000.

Depending on which side of the fence you were on when this happened, this was either an outstanding horror or wonderful testimony of a reverse mortgage.
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Old 11-28-2015, 09:54 AM
 
Location: SoCal
13,305 posts, read 6,369,679 times
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I have a home equity line. Much cheaper interest rate, if I need money.
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Old 11-28-2015, 10:01 AM
 
Location: Close to an earthquake
890 posts, read 679,057 times
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Quote:
Originally Posted by NewbieHere View Post
I have a home equity line. Much cheaper interest rate, if I need money.
I agree and have used a line of credit as a reverse checking account of sorts, keeping as little cash as possible in a checking/savings account and using the line of credit to meet cash call needs to be paid back as quickly as possible. The only downside to this is if the lender calls the line of credit. I'm aware of line of credit limits being reduced during the last real estate crash.
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Old 11-28-2015, 10:22 AM
 
Location: Hiding from Antifa?
6,429 posts, read 4,189,383 times
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Purchasing a home with a reverse mortgage has enabled us to stay in Maryland close to our children and grandchildren. For years I had been thinking we would have to move away to be able to live on our retirement income. We will have a good income from SS, but not enough to pay for a mortgage.

We had to pull a sizeable amount out of our pre tax IRA to do it, and in January we will have to pull out more to pay the taxes that we will get hit with for this tax year. (Spreading out the w/d over two years will save us about $4k, by not pulling out the whole amount at once.)

We might lose about $1k of income from the retirement funds but, we will be avoiding about $2k in rent or mortgage payments. In the meantime I am still working and my wife is on SSDI. When I turn 66 in August I will start drawing SS without penalty and we can pay off all debts before I retire in another year. Once we are beyond the tax implications, we will be in a position to retire anytime, but as long as I can keep working, we can sock more money away for retirement.

Before the RM solution presented itself, I could see no way to retire and stay close to family.
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Old 11-28-2015, 10:34 AM
 
Location: Hiding from Antifa?
6,429 posts, read 4,189,383 times
Reputation: 5727
Purchasing a new home with a RM can get you into a house that you never dreamed you could get into. If you have 100% equity in your current house and sell it, you can almost buy a house for twice the value of the one you sold. You could move to waterfront like you always wanted to, but never thought you could afford. After you are retired, you will have the time to enjoy it a lot more, too.

FYI, to do this you need to:

Be over 62, better that both of you are.
Maintain the home.
Stay current with Taxes.
Keep it insured.
All of these requirements are still there for any home you own, regardless of how you finance it.

Make sure it is where you want to be for the rest of your life, or at least until you have to go into a long term care facility. The surviving spouse can stay until death as long as he/she was on the original RM, which is why it is better if both are 62.

In a RM for an existing home you get paid by the mortgage company until the equity runs out, then you can keep living there until you die or wish to move. Your income will drop at the point the equity runs out, so don't get used to it.

When you purchase a home with a RM, you don't get any payments unless you put down more than is required and set it up that way. They too, will stop coming when the equity runs out.
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