Do you plan to get a "reverse" mortgage?

[StealthRabbit]

Originally Posted by rainmand

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Yes, the fees are very similar with every program from every lender, because they're dictated by HUD. The intention is to keep unscrupulous lenders from adding junk fees. And yes, they're higher then normal loans, because they're insured and the homeowners pay the premiums.

Why do you feel they were unreasonable? What was your objective?

Well, add it up...
High HUD insurance due to unscrupulous lenders... the benefit to an honest borrower, who already HAS built their equity built is a bit of a stretch for seniors.

The reduced equity (LTV ratio) with the current valuation of homes is a godsend for lenders, as they all offered to 'refinance' the Reverse, if values / age would get borrowers more equity in the future (for ALL the fees... again...)

generally the reverse is a tool to touch your equity, a very expensive tool (i.e. a scam in the mind of prudent investors)


How about a credible lender offering a reasonable equity stake (~50%) for a reverse style HELOC (with no fees !!)??, Now that could be of benefit for seniors in a temporary cash flow crunch. Why do the lenders need to rape us young and old?... never mind, I know why

[TuborgP]

Originally Posted by LauraC

Don't know anything about this reverse mortgage subject as I am not a homeowner but saw this news article today that might interest you.

"Here's one segment of the mortgage market that's still hot: federally insured reverse mortgages, which enable senior citizens to take money out of their homes."

Seniors Drawn to Mortgages That Give Back - WSJ.com

Wow the last five paragraphs are a must read for anyone still considering. I found this one of interest.
Policymakers have also warned that seniors may be particularly susceptible to aggressive marketing that encourages them to use cash from a reverse mortgage for risky and fee-laden insurance or annuity products. Comptroller of the Currency John C. Dugan called for more consumer protections for reverse mortgage borrowers in a speech Monday.

Also, fees for the mortgages are steep, and restrictions are tightening. Fannie Mae is the predominant buyer of the government-insured mortgages. But the mortgage-finance giant has been trying to encourage private investors to buy reverse mortgages by steadily boosting the amount of money it makes by purchasing the loans, which reduces the size of the reverse mortgage.

Ok that is two paragraphs but there is so much there to make one take heed that the article is a must read. Thanks for the link. It isn't all bad for everyone and some and even perhaps most don't regret it. Good luck to all still considering.

[TuborgP]

Originally Posted by livecontent

I just noticed this comment. I was not directing the comment toward you. Nor, did I think you were encouraging fraud. However, there are people who read this forum who get bad ideas. It was just a general comment about the nature of the real estate beast which we have been feeding for years with our greed.

The article from the WSJ makes it appear that Reverse Mortgages are yet another Bottom Feeding scheme to make money off of people down on their luck and facing retirement funding issues. Sure makes sense I guess if you find yourself in a corner with no way out. I am sure some will agree and some will disagree but thats what makes it so worthwhile participating. Now can we hear from some experts about this and the Real Estate boom and how buying any house is a certain profit? How about the wisdom of investing it all in Tech Stocks and watching it soar 30% a year? Wanna buy some Enron?
I will admit I personally have no financial stake at all in the topic or related issues. Just thoughts without personal reward if you agree or disagree.

http://online.wsj.com/article/SB124459828244500783.html
More seniors are turning to reverse mortgages to supplement their retirement savings, which in some cases have been decimated by stock-market losses

The above line is from the link.

[Paka]

Originally Posted by GLS

So perhaps a niche audience of people who have a great deal of equity tied up or house paid off, little or no pension, i.e. struggling solely on Social Security only, and no relatives or friends to leave an estate to?

Another niche market MIGHT be those that have no long term insurance and now know they will need to go into long term care. Since the sale of your home would make you ineligible for assistance, how would a reverse mortgage affect these folks since they could use the money but would show no appreciation upon the sale of the home for placement into a care facility???

[darstar]

I have been wondering more and more about going this route next year when my wife turns 62. There has been little current discussion and I think the subject should be revisited.
There are lots of us out there that are retired, can't get a conventinal mortage because of our age ( less income, new home)). The reverse mortage looks like a good alternative for people who need the cash for building cost loan payoffs, like land contract, personal loans, etc. It can be a catch 22, when you are retired and need a large sum , and all your equity is tied up in the home, yet you can not show the income to quailfy for a home loan.

[MotleyCrew]

I would rather carry a note and move into a very tiny apartment if I needed the extra cash.

[darstar]

Originally Posted by MotleyCrew

I would rather carry a note and move into a very tiny apartment if I needed the extra cash.

Lots of retired folks want to stay in their own homes, especially when its new, downsized, and fits their reduced retirement lifestyle. There should be a way for that to happen, without carring a huge debt load at this time in their lives.