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Old 03-21-2016, 07:58 PM
 
Location: Silicon Valley
18,082 posts, read 22,924,480 times
Reputation: 35201

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The money they started receiving, if they got a monthly income from the home, would never last as long as your mother will likely live, and maybe not even your father. Then where will they live?

And if they get a lump sum payment, with their spending habits, it will be gone in no time. And then where will they live?

I am just picturing them ending up without money or their home, and moving in with you. Maybe you like that idea?

A good friend of mine's parents were terrible with money. They ended up losing their home and did move in with their daughter's family. The daughter and her hubby bought a huge house for them all. Very trying and expensive.
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Old 03-21-2016, 09:35 PM
 
Location: Florida
5,232 posts, read 3,007,646 times
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Sell the house and downsize to a condo that they can buy for cash. Less upkeep, less expense.

If they take a reverse mortgage and then want to move they will have lost the equity in their house.
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Old 03-22-2016, 12:53 AM
 
Location: Las Vegas
13,884 posts, read 25,306,858 times
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I would sell the home and pay off all the debts. See what's left and get them into a small condo.
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Old 03-22-2016, 03:45 AM
 
71,490 posts, read 71,652,652 times
Reputation: 49074
Quote:
Originally Posted by NoMoreSnowForMe View Post
The money they started receiving, if they got a monthly income from the home, would never last as long as your mother will likely live, and maybe not even your father. Then where will they live?

And if they get a lump sum payment, with their spending habits, it will be gone in no time. And then where will they live?

I am just picturing them ending up without money or their home, and moving in with you. Maybe you like that idea?

A good friend of mine's parents were terrible with money. They ended up losing their home and did move in with their daughter's family. The daughter and her hubby bought a huge house for them all. Very trying and expensive.
if you take yearly payments they take age 100 and subtract your age and then divide the projected money by that amount so the payments will last . the problem is that because of reverse compounding interest , fees and limitations on the loan it may be not nearly enough money off in the future because of inflation .

the house equity gets eaten up very quickly .

now what if you suddenly can't drive and the area has no public transportation system , or you are sick and want to be near family . you basically have no home and likely no money to move
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Old 03-22-2016, 04:44 AM
 
2,443 posts, read 2,068,483 times
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I don't know that much about it but I can see nothing advantageous with reverse mortgages.
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Old 03-22-2016, 04:47 AM
 
71,490 posts, read 71,652,652 times
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there are forms of reverse mortgages i do like . i like the reverse mortgages to purchase .

that is where you can buy a far more expensive home then you could typically do and put down a bit less then 1/2 and never make another mortgage payment again .

they don't do it for co-ops or i would take advantage and buy a co-op in a building i would love to be in but price wise it is way out of budget for us in retirement .
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Old 03-22-2016, 08:14 AM
 
Location: Southern New Hampshire
7,216 posts, read 12,655,064 times
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OP, "pros and cons OF REVERSE MORTGAGES" would have been a better title, no?

I think reverse mortgages are great in certain circumstances, e.g. for a 75-year-old whose house is worth half a million and is paid off but whose social security isn't much. That person would likely get a decent amount each month until he/she dies (or moves).

I know some don't want their parents to get a reverse mortgage because they see the house as their inheritance. I say to he** with that, the parents should do whatever they need to do to be financially secure in their old age.
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