By Admin on Nov 20, 2008 in Renting & Real Estate
Moonbaby3 asked:
From what I’ve heard, it sounds too good to be true and I don’t want my older family members to get into something bad because their home is paid for and worth good money, especially if they wait and don’t sell until the market gets better in I’d say about 2 years.
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From what I’ve heard, it sounds too good to be true and I don’t want my older family members to get into something bad because their home is paid for and worth good money, especially if they wait and don’t sell until the market gets better in I’d say about 2 years.
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You have to be atleast 65 I believe. You basically give up your home when you die and they give you $ right then. They detemine it by alot of factors including how old you are. It is okay if you dont have anyone you care to leave anything to or you need cash badly. Of course if your value goes up, you are at a loss. I wouldn’t say the market will get better in two years either and besides, if you are 65 you may not be here in two years. You have to look at it from their point of view.
just_wondering_qa21 | Nov 24, 2008 | Reply
You get a loan based on the value of your home; it’s usually about 1/3 the value of the home. You either get it in a lump sum or in monthly payments.
It does not have to be repaid until the person dies or moves permanently out of the home (six months is considered permanently).
At that point the loan is due, and the house is usually sold to satisfy the debt, which over time has accumulated a pretty penny in interest owed.
Basically, reverse mortgages are best for people with no heirs, or who do not wish to leave their home to their heirs.
Here’s a calculator to determine how much she would get:
Good info here from AARP:
Add: Eligibility age is 62, not 65
tonalc1 | Nov 26, 2008 | Reply
Essentially, you are selling your house to a company that will pay you an annuity the amount of which is based on the equity you have in the house and the age of the home owners.
The home owners can live in the house rent free until they die, and then the house belongs to the company.
David M | Nov 29, 2008 | Reply
Think of it like a home equity loan where the cash comes in installments. A reverse-mortgage does not have to be paid back while you live in the home. When you move or die (which is more likey as all applicants must be 62+ years old) the money must be paid back, often by the inheritor of the estate taking out a mortgage. If your relatives are planning to sell in a few years, they should take that into account before getting into a reverse mortgage. However, this can be a great option for seniors living on a small fixed income to enjoy their golden years. You are NOT Selling your home, you are taking a loan with the home as collatoral.
CREIDDYLAD | Dec 2, 2008 | Reply
If a person has a paid off home, and is in relatively good health, and has expenses that exceed income, and wants to stay in their home…………..Are you getting all the conditions here? If all those things apply, then a reverse mortgage might be a good idea. But is is something to be very careful about because there are a lot of sharks out there smelling blood and circling around the elderly.
hanora | Dec 5, 2008 | Reply