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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.
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
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 .
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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