By Admin on Oct 31, 2008 in Personal Finance
almostready asked:
My parents may be gettng a reverse mortgage, Not sure if its the best thing for them, although it is none of my business. I think they are to young to do this and they don’t owe very much on their house.
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My parents may be gettng a reverse mortgage, Not sure if its the best thing for them, although it is none of my business. I think they are to young to do this and they don’t owe very much on their house.
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I think it’s fabulous; I’ll be doing it as soon as I can (age 62).
The only down sides I see are (1) not being able to leave the house (or the money from the sale of same) to heirs; and (2) the fact that you only get it while you live in the house, so if for some reason you have to leave–like if you have to go to a nursing home–the loan becomes due.
tonalc1 | Nov 3, 2008 | Reply
If it goes on long enough you end up owing more than the house is worth. So when it comes time to sell it,you might just as well turn the house over to the loan people
Gary K | Nov 4, 2008 | Reply
My father in law had a reverse mortgage. He passed away about 8 months ago. It helps people out that do not have a large savings or other investments to rely on for retirement. It worked out well for him, since he lived in a very expensive area in California where home prices continued to escalate. After selling his house, we had some money to split between the heirs, but nothing really large. It allowed him to receive monthly payments based on his mortgage and lived comfortably, but certainly not with any extravagances. Here is a website that explains how it works:
Inquisitive | Nov 5, 2008 | Reply
If your parents are not getting enough financial support from you they have no other option but to look for regular monthly support from other source. And reverse mortgage is the most respectable source for them. It is their right to live respectably. After their death, the bank will calculate the amount paid to them together with interest and ask you as a nominee to pay the dues if you want the mortgaged house back or otherwise sell the house which is mortgaged to them, recover their dues and pay the residual amount to the nominees equally. It is that simple.
VISHWAS K | Nov 7, 2008 | Reply
It’s a great idea for older folks who don’t have enough retirement funds to live on. Only downside is, they will not have the house to leave behind. Are you concerned because of this, or because of the well being of your parents?
Monstblitz | Nov 8, 2008 | Reply
Thats the idea that they have equity in the house that they use to setup a reverse mortgage. Here is an article on how they work -
529s.com | Nov 9, 2008 | Reply
Downside – they get it at 62 or 65, 66, whatever. They spend the extra cash over say, ten years. In ten years the money in the house is gone (principal + interest) and one or both needs to move into nursing home/assisted living. They may be left more or less broke. Other than that, reverses are an excellent option
Byron W | Nov 11, 2008 | Reply