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Old 04-13-2011, 01:55 PM
 
5,340 posts, read 14,088,565 times
Reputation: 4699

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Quote:
Originally Posted by mortimer View Post
For some, fully informed buyers.

Otherwise, it is a great way to leave an elderly person in the lurch.

I won't elaborate, but one can search using [fraud elderly "reverse mortgage"]
There are jillions of examples of elderly people being tossed out of their homes.

They "get" payments.

The payments come with a high interest rate and increased debt.

Just because someone is old, doesn't mean they learned enough
about financed to be considered savvy.

Often times, maybe most of the time, the old person with equity
can be better served by just taking out a HELOC and using money
when they need to at a much better interest rate without all the fees.

ON TOPIC again: the OP has absolutely no reason to take out a reverse mortgage,
a HELOC, a 401k loan or anything. They are just trying to pay off a remaining balance
of only $14k. If for some reason a person needs to make that balance "go away"
quickly, they could take out a Visa/Master Card cash advance as long as they didn't
let the balance hang around with 21% interest for very long.

That is, ONLY if they have a VERY good reason to do it.
Jillions huh?
What were they tossed for??
As previously stated, the borrower can stay in their home until they are dead. Even if they live to 150 years old and never make one single payment to the lender.

No everyone can qualify for a HELOC morrty. You have to have good credit and acceptable debt to income ratios AND make monthly payments.

So the borrower just keeps tapping the HELOC to make the monthly payments? What happens when they reach the limit? Someone with $120k HELOC and an average rate of 7% would have to make $700/mo. payments. That could be the borrowers entire take home income.
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Old 04-13-2011, 01:58 PM
 
5,340 posts, read 14,088,565 times
Reputation: 4699
ps. the mortgagor is the borrower.
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Old 04-13-2011, 02:03 PM
 
5,340 posts, read 14,088,565 times
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Quote:
It is, in effect, a payment TO the mortgagor.
Actually in effect, it is an increase in the amout owed to the mortgagee. In no way is it a payment.
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Old 04-13-2011, 04:04 PM
 
Location: Albuquerque
5,548 posts, read 16,037,487 times
Reputation: 2756
Quote:
Originally Posted by TimtheGuy
Jillions huh?
What were they tossed for??
I gave you the search string.

This is all off-topic. If you want to debate Reverse Mortgages and
HELOCs then start another thread. I'll be game to debate it there.

This thread is about whether a 62-year-old should borrow
on a 401k to pay off a mortgage.
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Old 04-13-2011, 04:06 PM
 
Location: Albuquerque
5,548 posts, read 16,037,487 times
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Quote:
Originally Posted by TimtheGuy View Post
ps. the mortgagor is the borrower.
Sorry. I was drunk.
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Old 04-13-2011, 09:52 PM
 
Location: Dunnellon, FL
482 posts, read 649,492 times
Reputation: 1720
Quote:
Originally Posted by mortimer View Post
I understand reverse mortgages thoroughly.
Reverse mortgages are for people who need income.
The OP did not indicate that was needed.

Your problem is English. The OP wants to pay if off.

You must be in the business of selling reverse mortgages.
They are a horrible and expensive deal that prays on the elderly.
Oh wait ... you knew that. You just want to make money off it.

See, another one that doesn't understand a reverse mortgage.

Yes there are. Every time a payment is made to the person taking out the reverse mortgage, the debt is increased.

Every month - higher and higher. It is a monthly payment from the homeowner to the reverse mortgagor.
I am not in the business of selling reverse mortgages. I am the happy recipient of a reverse mortgage. I don't care if my mortgage balance goes up every month. When I die somebody else can worry about it. I am just thrilled that I don't have to send half my income every month to a bank. I can use it to go out to dinner or buy groceries or take a vacation. You know, while I was working and paying a mortgage payment, I never had the extra money to take a vacation!

I fail to see how they "prey on the elderly." You mean those people who stand in the pet food aisle reading the labels to determine tonight's dinner?

My mom in 1996 still had a mortgage after my dad died. Her SS was $700 a month and her mortgage was $225. Not much, but it left us kids picking up the tab for her meds (no drug plan in 1996) and her groceries. She had plenty of equity in the house to get a reverse mortgage and have it paid off, but that tool wasn't available then. That $225 would have been a godsend to her. Not everybody has kids that are willing to pick up the slack in their parents' budgets.

I see the reverse mortgage as a tool the OP can use to pay off his $14K balance and then take monthly payments to increase his income if he so desires. I don't see it as "preying" on him. And he NEVER has to make a payment to the mortgagor. Ever. He only pays the taxes and insurance and upkeep, just like he already does.
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Old 04-13-2011, 10:05 PM
 
16,433 posts, read 22,126,887 times
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Quote:
Originally Posted by FloridaHappy View Post
He only pays the taxes and insurance and upkeep, just like he already does.
And that alone can easily be half of the average SS payment.
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Old 04-13-2011, 11:59 PM
 
Location: Dunnellon, FL
482 posts, read 649,492 times
Reputation: 1720
Quote:
Originally Posted by Bideshi View Post
And that alone can easily be half of the average SS payment.
Well, he's still going to have to pay the taxes, insurance, and upkeep whether he has a mortgage or not. That's the price you pay for owning a house. A reverse mortgage can be set up to send you a monthly check which one could use to cover those expenses, thus making the house pay for itself. That's tax-free, BTW.

Some people, though, shouldn't own real estate. My sister, for one. She never had a job paying more than minimum wage and her only retirement income at 73 is her SS check of about $900 a month, based on her dead husband's SS. She lives in senior subsidized housing that costs her about $350 a month, but that covers everything except her cable and maybe her light bill, not sure on that. If something breaks, she calls the manager. She has those kids I mentioned above, the ones that wouldn't contribute to her expenses, too busy building McMansions even in this day and age. One even owns rentals, but won't let her live in one free. She embarasses them because she wears stretch pants and old lady shirts.

I asked her to come live with us, but she wants to stay close to her grandkids so she puts up with being treated like dirt.
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Old 04-14-2011, 01:07 AM
 
16,433 posts, read 22,126,887 times
Reputation: 9622
Quote:
Originally Posted by FloridaHappy View Post
I asked her to come live with us, but she wants to stay close to her grandkids so she puts up with being treated like dirt.
I don't know you, but judging from your post, I hope I meet more people like you.
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