Reverse Mortgage Questions!!?

[DaveFan'51]

My wife and I are considering getting a Reverse Mortgage Loan! Does anyone out there have one!? Any info Good or Bad would be appreciated!

 

[Mister Sin]

My mother in law was just talking about it yesterday. The thought upsets her.

She is pissed off at Tom Sellek for doing a commercial for it lol.

I don't have any info to help. Just thought it was funny.

 

[DaveFan'51]

My mother in law was just talking about it yesterday. The thought upsets her.

She is ticked off at Tom Sellek for doing a commercial for it lol.

I don't have any info to help. Just thought it was funny.

LOL! It was Sellek's commercial that got us thinking about it!

 

[dieterbrock]

My wife and I are considering getting a Reverse Mortgage Loan! Does anyone out there have one!? Any info Good or Bad would be appreciated!

Well, not sure about your personal situation but they can be quite good for the right fit.
I put my Aunt, (my god mother in fact) in one. She was living on fixed income, with some small debts and barely having enough to cover her monthly payments. Yet here she was sitting on a home that had a ton of equity that she couldn't really use, it was only on paper. So we put her in the reverse, she took out additional to pay off her bills and remaining mortgage balance and is living quite comfortably on her pension/social security.
The downsize? Well, the reverse mortgage negatively amortizes so that equity that she intends to leave to my cousins, is dissipating each month as her mortgage balance is growing. On the bright side, in her neighborhood home values have increased by some 8-10% so it has stayed almost static.
Yes, there are fees associated with it, and it certainly is not a short term fix.
So yeah, IMO, it can be a fantastic loan for the right person.

 

[bnw]

My wife and I are considering getting a Reverse Mortgage Loan! Does anyone out there have one!? Any info Good or Bad would be appreciated!

They are an awesome idea! The lender pays YOU! Jump on that shit with both feet!:yay:

 

[DaveFan'51]

So we put her in the reverse, she took out additional to pay off her bills and remaining mortgage balance and is living quite comfortably on her pension/social security.

This is what my wife and I are looking to do! Thanks for all the input!

 

[bnw]

Well, not sure about your personal situation but they can be quite good for the right fit.
I put my Aunt, (my god mother in fact) in one. She was living on fixed income, with some small debts and barely having enough to cover her monthly payments. Yet here she was sitting on a home that had a ton of equity that she couldn't really use, it was only on paper. So we put her in the reverse, she took out additional to pay off her bills and remaining mortgage balance and is living quite comfortably on her pension/social security.
The downsize? Well, the reverse mortgage negatively amortizes so that equity that she intends to leave to my cousins, is dissipating each month as her mortgage balance is growing. On the bright side, in her neighborhood home values have increased by some 8-10% so it has stayed almost static.
Yes, there are fees associated with it, and it certainly is not a short term fix.
So yeah, IMO, it can be a fantastic loan for the right person.

This dummy has a question. What if your aunt has to go to a nursing home? For most homeowners entering a nursing home their house is the asset that either initially pays for the care until medicaid kicks in or they simply pay out of pocket. With a reverse mortgage is the house no longer an asset for paying for a nursing home?

 

[DaveFan'51]

This dummy has a question. What if your aunt has to go to a nursing home? For most homeowners entering a nursing home their house is the asset that either initially pays for the care until medicaid kicks in or they simply pay out of pocket. With a reverse mortgage is the house no longer an asset for paying for a nursing home?

The way I understand it, IF she has a spouse at home, the Home would be safe, if not the loan would be in default. I think so anyway, IDK for sure!!

 

[dieterbrock]

This dummy has a question. What if your aunt has to go to a nursing home? For most homeowners entering a nursing home their house is the asset that either initially pays for the care until medicaid kicks in or they simply pay out of pocket. With a reverse mortgage is the house no longer an asset for paying for a nursing home?

Its still an asset, she would have to sell it and use up the cash before medicare/medicaid kicks in.
Different topic, but it stinks. Family has been looking in to that

 

[dieterbrock]

Curious what @Rmfnlt would say about it. Haven't seen him around much lately though

 

[Riverumbbq]

The way I understand it, IF she has a spouse at home, the Home would be safe, if not the loan would be in default. I think so anyway, IDK for sure!!

It would be in default if she is single. The homeowner MUST be a permanent resident of the home receiving the reverse mortgage. The home can't be rented, and they do check. I own two homes and got a reverse mortgage about two years ago on my main home. A company sends letters to the home at least once a year to make sure it is answered by the homeowner. If the letter isn't returned, they will call you or visit the home.
It's a great program for those older folks with high equity or those like me who wish to retire a few years before the Social Security checks and retirement checks start to flow in. If you plan on moving soon, it may not be in your best interests, but if you plan on remaining in your home for a good while, it's a great way to go, although your children might frown on watching their dwindling inheritance. As @dieterbrock stated, if you live in an area where your home value steadily increases, you may be immune to some of the costs, although it really comes down to how much equity you choose to pull out.

I intend to sell the home I have the reverse mortgage on within the year, and quite sure I will eventually seek another reverse mortgage in the future.

In answer to @bnw, perhaps your aunt could spend down some of her home equity thru a reverse mortgage by hiring in-home assistance before she is forced to move into the nursing home. Obviously, it depends on her health, but she could maintain some personal freedom & dignity by remaining in her own home prior to becoming a ward of a nursing home. jmo.

 

[RhodyRams]

This dummy has a question. What if your aunt has to go to a nursing home? For most homeowners entering a nursing home their house is the asset that either initially pays for the care until medicaid kicks in or they simply pay out of pocket. With a reverse mortgage is the house no longer an asset for paying for a nursing home?

It would also be extremely wise to start getting power of attorney and taking the elderly persons name off as many accounts as possible. When my mother in law needed to go into assisted living , she had no assets but her SS check left.They usually go back 5-7 years to check for "unusual actvity"

 

[Riverumbbq]

It would also be extremely wise to start getting power of attorney and taking the elderly persons name off as many accounts as possible. When my mother in law needed to go into assisted living , she had no assets but her SS check left.They usually go back 5-7 years to check for "unusual actvity"

Very sound advice.

 

[fearsomefour]

Just don't do it.

 

[jrry32]

I guess it would depend on the need for cash and how much you care about leaving your house to your beneficiaries.

 

[dieterbrock]

I guess it would depend on the need for cash and how much you care about leaving your house to your beneficiaries.

The beneficiaries still get the house, just may not have as much equity

 

[jrry32]

The beneficiaries still get the house, just may not have as much equity

It's not really the same thing. They get the encumbered house. A lot of people don't want to leave a mortgage to their kids.

 

[fearsomefour]

It's not really the same thing. They get the encumbered house. A lot of people don't want to leave a mortgage to their kids.

Exactly.
Leaving debt is not leaving legacy.

 

[dieterbrock]

It's not really the same thing. They get the encumbered house. A lot of people don't want to leave a mortgage to their kids.

Owning a home free and clear is quite rare, and most of the reverse mortgages are paying off the current mortgage. And all homes are encumbered with property taxes.
For the beneficiaries, it is actually a benefit to acquire a home that has a reverse mortgage on it as opposed to a typical mortgage or home equity loan. The reverse loan typically offers 6-12 months for the property to be disbursed where on a standard mortgage the loan needs to be kept up to date. Either way the mortgage is treated the same when the propert is sold.
Lastly, as it pertains to beneficiaries, it is merely an avenue to liquidate an asset to provide quality of life. Drawing income from the equity is an option as opposed to liquidating stock accounts or retirement accounts that would be left behind. Negatively amortizing the home at around 4% may be better for the beneficiaries instead of liquidating a stock account that may be earning 8-10%

 

[DaveFan'51]

Owning a home free and clear is quite rare, and most of the reverse mortgages are paying off the current mortgage. And all homes are encumbered with property taxes.
For the beneficiaries, it is actually a benefit to acquire a home that has a reverse mortgage on it as opposed to a typical mortgage or home equity loan. The reverse loan typically offers 6-12 months for the property to be disbursed where on a standard mortgage the loan needs to be kept up to date. Either way the mortgage is treated the same when the propert is sold.
Lastly, as it pertains to beneficiaries, it is merely an avenue to liquidate an asset to provide quality of life. Drawing income from the equity is an option as opposed to liquidating stock accounts or retirement accounts that would be left behind. Negatively amortizing the home at around 4% may be better for the beneficiaries instead of liquidating a stock account that may be earning 8-10%

More great info Thanks a lot Dieterbrock!!! (When I read my comment, it almost sounds poetic!)