Reverse mortgage

[dave guest]

Be careful. Usually pays only a fixed predetermined amount. Not forever. Average is pro bably 50% of what home is worth. When this amount is reached, no more money. You still have to maintain home, taxes, insurance, utilities. Some people on SSI have been dropped because this mortgage is considered income unless you spend entire amount each month. Source Michigan Bar assoc. Lady I was attempting to help had 100K house, was told mortgage co. would pay $500 month until total of $45K then no more payments. No home to leave to her kids, nobody, the end. Please get a lawyer or someone very knowledgeable in real estate.

 

[Mike (WA)]

Every reverse mortgage I have seen allows an amount of time after the death of the owner for the heirs to pay off the loan (either through their own resources or through refinancing) and save the property. I wouldn't condemn all reverse mortgages, as they provide a way for seniors to use the equity they have to provide income, without selling the property. But as with any legal document, it should be reviewed by competent counsel before signing.

 

[Waterloo]

Dave,

I was hired as a consultant (real estate appraiser) a couple of years ago to help with a reverse mortgage analysis for retired property owners. The end result was the reverse mortgage could only be 1/3 the total value of the property. The best out come for this property owner was to take out a typical mortgage against the property. Than start a annuity with part of the money and apply the portion needed to cover the 1/3 that would have been reverse mortgage (taken out in cash). This method covers the mortgage free and clear and does not leave the heirs to the estate with a mortgage against the property. The property will be free and clear at the end of the term of the loan or have a large annuity to apply to the debt if paid off early.

 

[Walt Davies]

There are a lot of myths about reverse mortgages but I have been researching them and I can tell you this. There three different ways to get the money a lump sum a monthly check or you can put the whole thing in an account and just draw off the interest this seems the best to me because the lump sum will always be there.

These mortgages are backed up by 3 differant government programs if you can't trust them then who can you trust.

When the last person leaves the home it is time to pay back the loan. you can do it by selling the home and then you get what is left over after the loan amount is paid or your children who inherit the home can pay it off or get another loan on the house. You have 12 months to sell the home.

My place is worth $600,000 I can only borrow $125,000 at this time on it. So when I'm gone the kids will have a place worth about $1,000,000 not to bad I would say.

If you choose the 3rd option you will have money coming in until you leave the home no matter how long that it is.

Before you can get a reverse mortgage you must talk to an expert on the mortgage to guide you though it.

They will not take your home and leave you with nothing its against all state and federal laws to do that.

Walt

 

[Anonymous-0]

Please, run away from a reverse mortgage. Sell and take your up to $500,000 tax free and go rent someplace to live or buy a cheaper house.That will work out better for you, I promise.

 

[Walt Davies]

So what's tax free haven't you ever heard of Capital gains tax.
Walt

 

[John (C-IL)]

If the house you are selling is owner occupied there are no capital gains taxes due on sale.