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Old 11-04-2018, 08:46 AM
 
Location: SoCal
13,274 posts, read 6,356,923 times
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Quote:
Originally Posted by Perryinva View Post
Exactly. In 2000 my rate was not good (7.5%, IIRC) and since back then, I couldn’t have paid it off if I wanted too, I accelerated payments accordingly, as that was my best ROI. Amusingly, it was only about a $100k mortgage back then, but I only had 401k as savings in those days. I’ve moved 3 times since then, buying fixer uppers and earning a lot of sweat equity, and significant RE appreciation in each sale. I realized that investing was the only way to get really ahead, and changed things accordingly. I’ve refinanced at least 8-10 times as rates dropped. Once I got in the low 4%, I stopped accelerating payments and instead increased investments. I just moved a few weeks ago, in what I hope is the last for a very very long time. At 60, I now have the highest amount mortgaged I’ve ever had, but could easily pay it off if wanted.

Thanks to my investment savings and income increases, with LBYM, over the last almost 20 years, (and a healthy pension) the P&I are not even 25% of my projected guaranteed monthly fixed income, once I retire in 16 months, and far less than even just my investments generate today. A lot has been good fortune coupled with a financial and career plan that has worked.

It matters not if there is a bear market for even a few years, as the net long term investment ROI is still greater than my mortgage rate. The new house will appreciate the same with or without a mortgage and if paid off, that amount is tied up in the house, doing nothing except leaving more to my heirs, which is not an objective.
I agree it depends on interest rate to make a meaningful conversation. I had 15-year 5.75% back in 2000, paid off as agressively as I can. But not when it’s 3.5%. I know it’s a bottom when I see it. My experience with mortgage rate was 9.75% in 1989, 8.75% in 1996, so 3.5% for 30 years is too good to be true. People on Bogglehead keep saying perhaps we are fighting the last war, high mortgage rate, but inflation is always here, it’s not the last war. It maybe rearing it’s ugly head soon.
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Old 11-04-2018, 08:49 AM
 
Location: SoCal
13,274 posts, read 6,356,923 times
Reputation: 9900
Quote:
Originally Posted by mathjak107 View Post
we looked in to a reverse mortgage to purchase at one time . to be honest that terms are so poor and the interest rate and fees that eat up whatever equity you have are so high , that in good conscious i could not do it . it really is a crappy deal .

it sounded so good to just buy a place , put down half and never make a mortgage payment, but it really was awful terms .
Yeah, I don’t know why Tom Selleck keeps touting reverse mortgage on TV. It should be banned. It’s like scamming seniors.
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Old 11-04-2018, 08:54 AM
 
8,871 posts, read 5,145,585 times
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Quote:
Originally Posted by mathjak107 View Post
we looked in to a reverse mortgage to purchase at one time . to be honest that terms are so poor and the interest rate and fees that eat up whatever equity you have are so high , that in good conscious i could not do it . it really is a crappy deal .

it sounded so good to just buy a place , put down half and never make a mortgage payment, but it really was awful terms .
I don't care about the interest rate and fees. I am willing to permanently part with 25% of the purchase price in exchange for a place to live with no P&I payments or rent for the rest of my life. My SO is as well. (If we had joint finances, the math would be the same. 50% of purchase price from a larger pot of money).

If the interest rate and fees were lower, the only benefit would be a better chance at some equity to leave to heirs. Im taking care of that another way.
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Old 11-04-2018, 08:56 AM
 
Location: SoCal
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But I’ve read people who do that then have to move to nursing home. That’s when the trouble starts. Someone posted this problem on some retire forum that I’ve read, can’t remember which forum.
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Old 11-04-2018, 08:58 AM
 
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Quote:
Originally Posted by mathjak107 View Post
we looked in to a reverse mortgage to purchase at one time . to be honest that terms are so poor and the interest rate and fees that eat up whatever equity you have are so high , that in good conscious i could not do it . it really is a crappy deal .

it sounded so good to just buy a place , put down half and never make a mortgage payment, but it really was awful terms .
Plus, I thought the RM was a no go for you because the place you were considering was a co-op. Perhaps I am confusing you with someone else.
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Old 11-04-2018, 09:04 AM
 
8,871 posts, read 5,145,585 times
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Quote:
Originally Posted by NewbieHere View Post
But I’ve read people who do that then have to move to nursing home. That’s when the trouble starts. Someone posted this problem on some retire forum that I’ve read, can’t remember which forum.
You can be out of the home for up to one continuous year. After that, the note is due. If you return home before 1 year and then leave again, the clock starts over.

I look at it this way: if I am unable to live in my own home and care for myself, then I shouldn't. This is true whether I have a traditional mortgage, a reverse mortgage, or no mortgage at all.
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Old 11-04-2018, 09:09 AM
 
8,871 posts, read 5,145,585 times
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Quote:
Originally Posted by NewbieHere View Post
Yeah, I donít know why Tom Selleck keeps touting reverse mortgage on TV. It should be banned. Itís like scamming seniors.
Reverse mortgages aren't scams; they are tools. Like any tool, there are situations in which they are helpful and situations in which they aren't.
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Old 11-04-2018, 09:22 AM
 
71,759 posts, read 71,853,273 times
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Quote:
Originally Posted by Petunia 100 View Post
Plus, I thought the RM was a no go for you because the place you were considering was a co-op. Perhaps I am confusing you with someone else.
we were looking in to a condo too if we would have done the reverse to purchase since it was so much more money for the condo then we would spend conventionally . but it just ate up equity in no time and even though in the long run that was the plan , it was just to fast of an acceleration for our taste ..
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Old 11-04-2018, 09:26 AM
 
Location: SoCal
13,274 posts, read 6,356,923 times
Reputation: 9900
If you have heirs that you like and want to leave something, then it’s not a good idea.
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Old 11-04-2018, 09:52 AM
 
8,871 posts, read 5,145,585 times
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Quote:
Originally Posted by NewbieHere View Post
If you have heirs that you like and want to leave something, then itís not a good idea.
There are other ways to leave something to your heirs. It's not an either/or situation.
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