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Old 06-13-2019, 07:52 AM
 
11,963 posts, read 5,102,113 times
Reputation: 18698

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Quote:
Originally Posted by Rachel976 View Post
Don't be surprised. I know a 60-year-old who asked her mother for $800 to repair her car and then used the money to fly to Hawaii instead.

(Maybe that tells you why she didn't have $800 in savings by age 60. No discipline. And there are millions of people just like her.)
Bwahahahahaha! Instead of being more mature and wise, some people revert back to being teenagers.
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Old 06-13-2019, 07:54 AM
 
Location: Loudon, TN
5,768 posts, read 4,822,990 times
Reputation: 19382
I read the entire article this morning before coming to C-D, and wondered if I'd see it quoted here. It seems to me that almost every person in this article neglected to pay the peripheral costs, such as insurance or taxes. Many people have those things collected in escrow with their mortgage payments prior to taking out a RM, and so paying them annually, or monthly, is not something that they are accustomed to doing. Add in gradual loss of mental acuity, and you have things like this occurring, and then they start tacking on penalties, fees, and interest and it spirals out of control. For this reason, RM or not, it becomes more and more of a need for seniors with ANY level of confusion to have a trusted family member or advisor to help them with their paperwork.

Long before my MIL's dementia became apparent, she would ask us to read things that came in her mail that worried her. Luckily she was open with us and gave us access to her finances to help her after Pops passed away. She told us so many times that she would've been lost without us. Things have become more complicated and technically advanced in the last 20 years and some seniors will just become frustrated, or throw out mail that they don't understand, with disastrous consequences. If the folks in this article had someone with their best interests at heart looking over their shoulder, these problems could have been resolved in the early stages and need not have snowballed to the point of foreclosure. Things get this bad because there was no early intervention to stop the forward momentum of these "snowball" type situations.
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Old 06-13-2019, 02:01 PM
 
8,819 posts, read 5,119,154 times
Reputation: 10086
Quote:
Originally Posted by athena53 View Post
I think that what really made these mortgages a disaster was the lump sum payout option. Originally you got an annuity, depending on your age and the equity in the house. Now you can get it all up front and spend it all. Whether it's spent on essentials or blown on a cruise, you're broke again. No money to pay the property taxes, insurance or repairs. I cringe when I see those commercials with the statement, "You cannot lose your home". (According to the Dave Ramsey video, about 18% of reverse mortgages are going bad because the homeowners can't pay taxes and other expenses they're required to keep current.)

At least they've changed the rules that let a couple put only one owner of a married couple (the older, of course) on the reverse mortgage so they'd get more $$ out. If the older spouse died the surviving spouse had to move out because the reverse mortgage company now owned the house. Some really sad stories about those cases.

Reverse mortgage are scary.
I think you are right about that.

I currently do not own a home, but if I buy another one, I just may use a RM to do it (assuming I hit 62 by then). You cough up half or less of the purchase price, take a RM, and you're done.
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Old 06-13-2019, 02:07 PM
 
2,066 posts, read 699,344 times
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Quote:
Originally Posted by TheShadow View Post
Long before my MIL's dementia became apparent, she would ask us to read things that came in her mail that worried her. Luckily she was open with us and gave us access to her finances to help her after Pops passed away. She told us so many times that she would've been lost without us.
All of you are fortunate that she understood the need to run things by you and trusted you. One of the sadder stories in the article was a woman who'd expected to inherit her family home after her parents died and found out only after both had died that the house had a reverse mortgage on it. She couldn't afford to buy it so she lost it. You wonder if the parents didn't tell her about the reverse mortgage because they didn't want her to know they needed money that badly.
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Old 06-13-2019, 02:11 PM
 
71,461 posts, read 71,629,249 times
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I looked in to a reverse mortgage to purchase ..I love a certain luxury condo in our area but the price is beyond our retirement budget .. so I thought about using a reverse mortgage to purchase ..I could plunk down less then 50% and never pay anymore towards the mortgage ..

Well those kinds of mortgages are considered high risk and the terms are awful .. a much higher rate and loads of fees ... it would eat up equity so fast I could never be comfortable with it at that rate
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Old 06-13-2019, 02:14 PM
 
11,963 posts, read 5,102,113 times
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Quote:
Originally Posted by athena53 View Post
All of you are fortunate that she understood the need to run things by you and trusted you. One of the sadder stories in the article was a woman who'd expected to inherit her family home after her parents died and found out only after both had died that the house had a reverse mortgage on it. She couldn't afford to buy it so she lost it. You wonder if the parents didn't tell her about the reverse mortgage because they didn't want her to know they needed money that badly.
Moral of the story is don't expect an inheritance until the money is in your hand.
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Old 06-13-2019, 02:53 PM
 
2,066 posts, read 699,344 times
Reputation: 5294
Quote:
Originally Posted by marino760 View Post
Moral of the story is don't expect an inheritance until the money is in your hand.
I'll agree with that- if my widowed Dad spends his last dollar just before he dies, that's his business- but that story reminds me of what a friend told me about his own father, who's in his 80s now. They're naturalized US citizens, immigrants from Cuba, and his mother died when he was in college. Their mother had a few pieces of unique jewelry she'd brought from Cuba, including some with gold Cuban coins. His sister, the only daughter, is expecting to inherit them when Dad dies. What she doesn't know is that Dad sold them years ago when he started running out of money. I'm guessing that Dad is ashamed to tell his daughter he sold her mother's jewelry.

Same thing with a reverse mortgage- my Dad is in an Assisted Living place and doing fine, but if things were different I'd want him to talk with us before he made any major moves.
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Old 06-13-2019, 03:58 PM
 
Location: Proxima Centauri
4,788 posts, read 1,978,657 times
Reputation: 5219
To the Moderator - Thank you for finding and posting the link in post 1.
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Old 06-13-2019, 04:19 PM
 
Location: Proxima Centauri
4,788 posts, read 1,978,657 times
Reputation: 5219
Quote:
Originally Posted by mathjak107 View Post
Who the heck is going to bother to read all that
Quote:
Originally Posted by ChessieMom View Post
No kidding. Sheesh.
Quote:
Originally Posted by Deuce88 View Post
That's one long post!
Quote:
Originally Posted by katharsis View Post
I appreciate the post, but next time, PLEASE post a link with just a summary of what was said in your own words (or else just post the first paragraph with the link).

Sorry. The moderator fixed that. My link would have been from yahoo mail revealing info about me.
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Old 06-18-2019, 11:57 AM
 
3,247 posts, read 842,766 times
Reputation: 3758
Quote:
Originally Posted by TMSRetired View Post
Go to low income housing, that's what.
If they can't afford the costs, that reverse mortgage is just delaying the inevitable as a previous poster pointed out. Once foreclosed they have no money at all.
Selling when you cannot afford to keep it up anymore at least gives you money in your pocket.
Low income housing? The very last thing you need when you're older is an unsafe area. I'd have a sit-down discussion with my family members and advise that if they have any better ideas, I'd listen and consider them. But as for living independently, I'm taking the RM to stay in my own house vs. living in a housing project.
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