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Apparently they are a good choice for some people.
However older people tend to think they will age in place and never have to move. But life happens, and they have to be moved because of infirmities or accident. If you have little income, you might need the equity in the house for your expenses. But you will not be able to recover that equity, because you don't own the house any longer.
I would like to hear of cases where a reverse mortgage would be beneficial. The only one I can come up with would be someone facing death shortly, who can still live at home, and who needs money for medical care.
Anyone who needs to stretch their nest egg but wants to stay put in their home.
BTW, having a mortgage, reverse or traditional, does not mean you no longer own your home.
I am considering a reverse mortgage. The biggest issue for me is that if for some reason you do not live in the home for over 12 months, the loan will be called. Who knows what will happen to me medically? There's no way to know, and I would hate to lose my home because of that situation. Please respond if you think differently.
I am considering a reverse mortgage. The biggest issue for me is that if for some reason you do not live in the home for over 12 months, the loan will be called. Who knows what will happen to me medically? There's no way to know, and I would hate to lose my home because of that situation. Please respond if you think differently.
I understand how you would feel and I would feel the same. I will tell you just because you had to go to rehab for more than a year that would not take away your residency or rights of residency. I think you are over thinking it.
I don't regret it. If I want to leave I can sell the house, which, btw is appreciating more than the mortgage . Or I can leave it to my heirs if I die and they can sell it. Or if I am in a rehab center for a year, I would try to work with the mortgage co if I had a chance of coming back to the house. As the year progressed, I would decide what to do then.
The RM has given me peace of mind. I do not have increasing imortgage payments to worry about. I do pay the insurance, taxes and HOA as well as upkeep. I wanted to get out of Phoenix, the heat, and the environment and the RM allowed me to do so. I sold my other house which was way too big for me, and bought a smaller one with the RM. This is an opportunity for seniors to downsize and still have cash left over. I like it.
All I can say is the people I've talked to who took out a RM really regret that decision.
Isn't there other options for you ?
My MIL took out a reverse mortgage on her condo after my FIL passed away back in 2007. Now a decade later, she still lives in the condo at close to 90 years old, and loves still having it. Stopping the mortgage payment was a major plus, the small monthly check is just a bonus.
She couldn't have stayed there without the reverse mortgage.
the problem with reverse mortgages is reverse compounding interest ain't your friend so you better be sure your area has everything you may ever need .
many get burned by reverse mortgages when they can no longer drive and are in area's with no decent public transportation system .
or they get burned because they live so far from family that now they need assistance and want to move closer to family only they have no more equity or money left to do that .
It's easy for retirees who are in perpetual denial to end up in a house that is falling apart.
A retired, reclusive couple down the street has a house that is 25 years old and has original paint, windows, roof, and deck. It's falling apart and is an eyesore. I think they would need to spend about $45K to complete the deferred maintenance. I'm not sure if they have a reverse mortgage, but if they do, they are trapped.
I don't know how the story will end, but I think not well.
A better idea is to make sure your house is up to date and paid off prior to retirement if you intend to stay there. An even better idea is to get rid of your excess stuff, sell the big house, and move to a smaller place before you get too old or debilitated.
the bank can demand you repair the house . it is in all agreements .
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