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Old 08-22-2017, 01:56 PM
 
Location: Copenhagen, Denmark
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Since I don't understand reverse mortgages, I hope someone will educate me.

If a person has equity in their, at any age, why can't they simply take a loan for the amount of their equity and pledge the house as a collateral? It seems to me they would be better off. No?
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Old 08-22-2017, 02:03 PM
 
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because they would have to make loan payments . they are taking the reverse mortgage because they need income in the first place . paying a loan with interest is out of the question .

the reverse mortgage is actually a balloon payment loan that becomes due down the road after certain conditions are met . the difference is you can choose to give them the house if you or your heirs do not want to pay it off
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Old 08-22-2017, 02:55 PM
 
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There are many ways in which people live beyond their means. This is one of them. Sell the house before the reverse mortgage s--t hits the fan and you have nothing.
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Old 08-22-2017, 03:05 PM
 
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Only thing a Reverse Mortgage does is reverse your finances in a negative way
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Old 08-22-2017, 05:24 PM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
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Quote:
Originally Posted by Willistonite View Post
Only thing a Reverse Mortgage does is reverse your finances in a negative way
Not in every circumstances. Some times a RM will and does make sense.
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Old 08-22-2017, 05:37 PM
 
12,825 posts, read 20,141,183 times
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Spam's getting worse again.

I even saw one of the ones in Cyrillic script on one of the other subforums here earlier today.

That's probably even worse than spam, it's probably malware.
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Old 08-22-2017, 09:14 PM
 
Location: Hiding from Antifa?
6,410 posts, read 4,177,915 times
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Quote:
Originally Posted by mathjak107 View Post
i never said it is bad for all . i pointed out the negatives .

in our case i looked in to a reverse mortgage to purchase and the math was a poor deal . the fact is they are priced as higher risk mortgages as a group .

are you going to tell us you got the same interest rate and fees as a first mortgage ? i would doubt that

i don't see me telling anyone else not to look in to it . you are reading in to things more than i posted .

as far as regular reverse mortgages , people have to be aware of all the negatives . it is up to them to take what they learned and analyze things
I was replying to your post, more-so in agreement with what you said.


And, since I don't pay any interest, the only downside is that the equity drops a little faster. If I never move out until I am dead or near dead, I don't care. My wife or I or both can stay in the house as long as we want. If at a future time we have a need to move, it will probably be because the last survivor between the two of us is going into a nursing home. Then the bank can clean out all our junk, because, as in another thread, our kids won't want it.
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Old 08-22-2017, 09:17 PM
 
Location: Hiding from Antifa?
6,410 posts, read 4,177,915 times
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Quote:
Originally Posted by Frihed89 View Post
Since I don't understand reverse mortgages, I hope someone will educate me.

If a person has equity in their, at any age, why can't they simply take a loan for the amount of their equity and pledge the house as a collateral? It seems to me they would be better off. No?

You have to be 62 to get a reverse mortgage at this point. And, if married, it is best if both of you qualify, so you can both be on the mortgage and the youngest can stay on after the oldest dies.
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Old 08-22-2017, 09:28 PM
 
Location: Hiding from Antifa?
6,410 posts, read 4,177,915 times
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Quote:
Originally Posted by mathjak107 View Post
because they would have to make loan payments . they are taking the reverse mortgage because they need income in the first place . paying a loan with interest is out of the question .

the reverse mortgage is actually a balloon payment loan that becomes due down the road after certain conditions are met . the difference is you can choose to give them the house if you or your heirs do not want to pay it off
RMs can be set up in different ways.


existing ownership equity:
RM with payments to owner for a designated term (ie: ten years) then $0.00.
RM with smaller payments for a longer term or even until owner dies or sells it or moves out.
RM with no payments to owner, due to small equity to start with. No term limit.
Purchasing with RM:
Purchasing with ~60% down and RM covers the rest. Start out with ~60% equity which gets smaller over time. No limit to how long you can stay in the house.
Purchasing with more than 60%, you can get them to make payments to you, or the equity decreases at a slower rate. Doesn't make sense to me to do this.


I have never seen how it can be equated to having a balloon payment due in the future. Perhaps you could explain?
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Old 08-23-2017, 12:34 AM
 
Location: SW Florida
10,289 posts, read 4,868,671 times
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My mother has only been able to stay in her home because of a reverse mortgage. However, she realized that there will be nothing to leave her children and luckily we are okay with that. My aunt died owing a reverse mortgage and all I have to is pay them back which is still $50K less than the house will appraise and finance for so it worked out well for me.
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