Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
1. I plan to get a reverse mortgage when i retire. There is no incentive for most childfree to save their home to pass to the next generation. So if i do not sell, i will at least be able to draw cash for my retirement. I feel more secure w the funds in the home knowing that i cannot access them as i would if in the bank or stocks. (I will still have other money in those places but this is one way to diversify.)
Please, think twice before you sign up for a reverse mortgage! They are not the good deal the lenders portray them to be and will cost you tens of thousands of dollars to give you access to your own equity in your property.
If you don't trust yourself to manage the proceeds of a house sale yourself, you can invest in index mutual funds or ETFs and arrange with the fund-management company for staged monthly withdrawals. That way, when you eventually become unable to live in your home, you will still have the monthly income needed for your new living quarters. A reverse mortgage will chain you to a house that may be uncomfortable or even dangerous for you to live in once you are older.
My neighbors 80 year old dad took a reverse mortgage back in 2006. he owed 120k on the house they paid it off and gave him 88k in a lump sum. he wasted the 88k on nothing in particular but some good times to show for it. He still lives in the house. he just pays the taxes and utility bills. the house is now worth about 145k in the current market. He is in ill health and might have to go to a nursing home. The reverse mortgage is just shy of 300k owed to the reverse mortgage lender.
his son talked to them about retaining ownership of the house. They said sure just start paying on the balanced owed. He said he would buy it as is for fair market value of 145k. the lender told him to pound sand. he went an talked to an real estate attorney who informed him because he is next of kin he will be able to purchase the home upon his dads passing or leaving the home for at least 5% if not 10% below current market value. he said the market value as determined by a local professional home appraisal company.
If this is true then the lender stands to lose a bundle when his dad finally leaves the home. the lawyer said its some kind of federal law they reverse mortgage lender has to comply with the law. He claims only a direct descendant can get the discount. does anyone know if this is actually the case?
After losing 30K in home value,I am done with home ownership. My husband and I are moving on August 29, straight from our closing. Heading to our new townhouse rental unit in Wilmington,NC. No more worrying about the roof,the septic,the pipes freezing,new appliances,looking at the 2 foreclosed properties across from us.
We can pick up and find a new place without a care. Don't have to burden our children with selling the house when we die. We will never own again. Oh Happy Day
My neighbors 80 year old dad took a reverse mortgage back in 2006. he owed 120k on the house they paid it off and gave him 88k in a lump sum. he wasted the 88k on nothing in particular but some good times to show for it. He still lives in the house. he just pays the taxes and utility bills. the house is now worth about 145k in the current market. He is in ill health and might have to go to a nursing home. The reverse mortgage is just shy of 300k owed to the reverse mortgage lender.
his son talked to them about retaining ownership of the house. They said sure just start paying on the balanced owed. He said he would buy it as is for fair market value of 145k. the lender told him to pound sand. he went an talked to an real estate attorney who informed him because he is next of kin he will be able to purchase the home upon his dads passing or leaving the home for at least 5% if not 10% below current market value. he said the market value as determined by a local professional home appraisal company.
If this is true then the lender stands to lose a bundle when his dad finally leaves the home. the lawyer said its some kind of federal law they reverse mortgage lender has to comply with the law. He claims only a direct descendant can get the discount. does anyone know if this is actually the case?
Yes the son should be able to pay of the reverse mortgage at 95% of the value of the home at the time of the fathers death assuming the father left the house to the son. But the bank is probably going to demand repayment within 90 days to perhaps 180 days after the death of the father.
In addition to individual factors such as wanting to be free to move on short notice, it makes a huge difference in which real estate market we live and what year it is when property was bought or sold.
I have rented, then owned, then rented, and now currently I own once again at age 70. Also, I just read through this entire thread. Some people seem to be strongly emotionally wedded to one course or the other, but I can see both sides.
I had been renting for about 17 years in 2001, and had been fortunate in finding below-market rentals. Then in 2001 the owner of the five-unit apartment complex where I lived put the place up for sale. A buyer entered escrow who wanted to live in my unit - the units were not all the same - and a condition of escrow was that I should be moved out before the sale could close. So I was evicted.
But the eviction turned out to be a blessing in disguise. I really wanted to continue to rent, but as I looked at rentals I realized just how under-market my apartment had been - $200 or $300 per month. I would have had to pay about $1200 to $1400 at that time for comparable (two bedrooms, one and a half baths, and a two-car private garage). At that rental price my monthly payment for my own comparable place to own would be about the same as renting. (Of course the 20% down changes the equation somewhat).
So I switched from looking at rentals to looking at places to buy (thinking what the hell if I'm going to pay that much to rent I might as well own), found a townhouse about ten miles from downtown Los Angeles (two bedrooms plus loft, two and a half baths, double car private garage) and bought it for $190,000. Remember that was in 2001, which happened (by blind luck for me) to be right before the beginning of the insane frenzy in real estate price appreciation in the greater Los Angeles area.
I still live here 13 years later, having watched the prices soar insanely to about $435,000, then crash but not all the way back down to my purchase level of $190,000, then rise again but not up to the insane peak. None of those fluctuations mattered much to me, as I am here for the long term. I hate moving because it's a lot of work, and when I moved in here I told myself I would never move again.
I paid on the mortgage (a twenty year loan) for a few years, then just figured what the hell and paid it off. (Sure, that might have been stupid, but I don't really care because I like the idea of not having a mortgage).
One major point of my story is that I have not kept track of rental prices since 2001 so I don't even know what the current situation is here. Would I do the same thing if I were renting right now and were evicted? I have no idea! The math could be very different right now.
I have been a Homeowner since 1983. This is now my 2nd Home (Bought it in 1993) and had a Huge 9% 30-year Mortgage, for $140,000 Back in the days of High Prices. I PAID OUT THE Ass on this House (1400 SQ.FT, 3BDRM, 1 Bath, Built in 1957). But NOW it is Only Worth about $95,000. I also, Over the years, have fixed things up and made things nicer, to the Added tune of an additional $50,000 or $60,000. So that is about $200,000 I have into it...NOT INCLUDING the High Interest I had to pay over the years for the Mortgage. People like me-Now 60 years Old-GOT SCREWED !!! Growing up...we were always told: "Buy a House, You cannot Lose"...it's like Money in the Bank! And if you fix it up, You will make more money on it. HAAAA...What a LIE !!! I Live 15 miles South of Detroit. The Real Estate Market around Detroit has Fallen Steadily since 2008, My Home dropped $100,000 in Value, and still has not recovered. in 2007 I had $50,000 built in Equity. Then it Dropped 100k and NOW I am $50,000 Underwater with it. I should have Rented all those years, I would have been Much Better Off. As of March 1st, 2015 I Quit making house payments on this "DEAD HORSE", and I will let it go into Foreclosure, Because I have tried to sell it since 2009 but No Real Estate Company wants to sell it for me Because it is so Far Under Water. That is where Home Ownership has gotten Me. The Housing Market is So Low Around Detroit, It Only Benefits Someone who NOW wants to Buy. The Sellers are Getting Screwed..."Hence all the Foreclosures in the Detroit area". I am walking away, the bank can SHOVE THIS HOUSE...I am Looking to move to the Tucson area and will Find an Apartment Complex to live in. "Does anyone have an Idea of a "GOOD APARTMENT COMPLEX" for a 60 year old with a wife and 23 year old Daughter in college, to live in? Please Help me find a Nice Livable place I can Start my life all over...I want a Pool and Exercise room in the Complex. I can afford up to $900-$1000 a month for Rent. THE HELL WITH HOME OWNERSHIP !!! Please Help me with a Name of a Nice Safe Complex. Thank You all. -A soon to be Arizonian.
I have been a Homeowner since 1983. This is now my 2nd Home (Bought it in 1993) and had a Huge 9% 30-year Mortgage, for $140,000 Back in the days of High Prices. I PAID OUT THE Ass on this House (1400 SQ.FT, 3BDRM, 1 Bath, Built in 1957). But NOW it is Only Worth about $95,000. I also, Over the years, have fixed things up and made things nicer, to the Added tune of an additional $50,000 or $60,000. So that is about $200,000 I have into it...NOT INCLUDING the High Interest I had to pay over the years for the Mortgage. People like me-Now 60 years Old-GOT SCREWED !!! Growing up...we were always told: "Buy a House, You cannot Lose"...it's like Money in the Bank! And if you fix it up, You will make more money on it. HAAAA...What a LIE !!! I Live 15 miles South of Detroit. The Real Estate Market around Detroit has Fallen Steadily since 2008, My Home dropped $100,000 in Value, and still has not recovered. in 2007 I had $50,000 built in Equity. Then it Dropped 100k and NOW I am $50,000 Underwater with it. I should have Rented all those years, I would have been Much Better Off. As of March 1st, 2015 I Quit making house payments on this "DEAD HORSE", and I will let it go into Foreclosure, Because I have tried to sell it since 2009 but No Real Estate Company wants to sell it for me Because it is so Far Under Water. That is where Home Ownership has gotten Me. The Housing Market is So Low Around Detroit, It Only Benefits Someone who NOW wants to Buy. The Sellers are Getting Screwed..."Hence all the Foreclosures in the Detroit area". I am walking away, the bank can SHOVE THIS HOUSE...I am Looking to move to the Tucson area and will Find an Apartment Complex to live in. "Does anyone have an Idea of a "GOOD APARTMENT COMPLEX" for a 60 year old with a wife and 23 year old Daughter in college, to live in? Please Help me find a Nice Livable place I can Start my life all over...I want a Pool and Exercise room in the Complex. I can afford up to $900-$1000 a month for Rent. THE HELL WITH HOME OWNERSHIP !!! Please Help me with a Name of a Nice Safe Complex. Thank You all. -A soon to be Arizonian.
Location: St Thomas, USVI - Seattle, WA - Gulf Coast, TX
811 posts, read 1,136,216 times
Reputation: 2322
If you have enough income/investments that it doesn't matter to you that you're throwing your money away every month, then keep renting. You are paying for someone else's investment every month, instead of growing your own investment. Even if taxes are high in a specific area, you do realize that rent costs are covering those tax expenses for your landlord, right? You always pay more when you rent, without the benefit of building equity.
Purchasing a home is still the easiest, large financial investment for Americans to make. It's a smart, easy way to put away money every month as home equity. Why would your throw your money away every month??
My first home purchase, as a 21-yr-old single lady, was a free-standing town home. Yard and exterior building maintenance is taken care of through the HOA and I was/am free to spend my time on things other than roof repairs and pulling weeds. Awesome!! Many years later, I'm traveling the world with my husband while our home investments (including my town home!) continue to not only pay for themselves, but bring in a profit every month. They are wonderful investments for us and we only set foot in them every few months, max.
Home ownership is a great privilege and opportunity and it's a myth to think that it's going to tie you down. Get a condo if you want someone else to take care of most of the maintenance. Find a great tenant if you decide you want to be mobile or move to a new spot. Stop throwing your money away every month!
If you have enough income/investments that it doesn't matter to you that you're throwing your money away every month, then keep renting. You are paying for someone else's investment every month, instead of growing your own investment. Even if taxes are high in a specific area, you do realize that rent costs are covering those tax expenses for your landlord, right? You always pay more when you rent, without the benefit of building equity.
total nonsense . i could never have made the money on the real estate investments i did if the money was sitting in my house tied up and i didn't rent . even after subtracting out decades of rent i could buy mulitple homes today with the difference.
if that is throwing money away on rent then i will take that over ownership any day..
what you need to get a grasp on is it isn't about buying a home it is about what you do for investments if you don't.
whether or not someone has the ability or knowledge to invest elsewhere is a different argument .
each situation will be different and resources will be different so to make a general statement like the above is just nonsense.
One bad thing about renting vs owning is most landlords are 'SLUMLORDS',who put as little cash as possible into their rentals,and that means ancient,possibly dangerous,but always on the verge of failure- heating/appliances! I have never heard of a landlord who updates the heating and/or appliances on a regular basis just because of age.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The time and the place make quite a difference.
I Lost my Ass Owning a Home "Outside" Detroit....
I have never heard of a landlord who updates the heating and/or appliances on a regular basis just because of age.
