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  1. #11  
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    Reverse mortgages shouldn't be illegal but they do have a lot of pitfalls, especially in a down market. Not something I would recommend to anyone unless they have over 75% equity in their house. That way if something happens and they are forced to sell the house, they should still be able to get out from underneath one relatively unscathed.
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  2. #12  
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    Quote Originally Posted by MountainMan View Post
    Reverse mortgages shouldn't be illegal but they do have a lot of pitfalls, especially in a down market. Not something I would recommend to anyone unless they have over 75% equity in their house. That way if something happens and they are forced to sell the house, they should still be able to get out from underneath one relatively unscathed.
    I don't believe you understand how a reverse mortgage works. Let's say a couple has a house paid off, they want to continue living in it, they have high expenses and high property taxes and they are barely getting by on social security. They can get around 65%of the appraised value of the house. With the cash that can make their life much easier. The purpose of getting a reverse mortgage is to live in it the rest of their lives. If they have any intention of selling it, the reverse mortgage is not for them. Like I said, a reverse mortgage is not for everyone. The fees are high and the heirs get pissed because they realise in all probability that there will be little equity left when both die.
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  3. #13  
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    Quote Originally Posted by Novaheart View Post
    Yeah, I probably should have sold millions of dollars worth of real estate in residential resales and new development.
    You do not know your ass from the hole in the ground when it comes to reverse mortgages. Typical of most things you post.
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  4. #14  
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    Quote Originally Posted by lacarnut View Post
    I don't believe you understand how a reverse mortgage works. Let's say a couple has a house paid off, they want to continue living in it, they have high expenses and high property taxes and they are barely getting by on social security. They can get around 65%of the appraised value of the house. With the cash that can make their life much easier. The purpose of getting a reverse mortgage is to live in it the rest of their lives. If they have any intention of selling it, the reverse mortgage is not for them. Like I said, a reverse mortgage is not for everyone. The fees are high and the heirs get pissed because they realise in all probability that there will be little equity left when both die.
    It would be great for a person with no heirs!
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  5. #15  
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    Quote Originally Posted by RobJohnson View Post
    It would be great for a person with no heirs!
    My brother is my heir who does not want or need my house. I just did a reverse mortgage. Plan to buy a vacation beach condo and rent it out when I am not there. This will be an investment with positive cash flow. For me, this is a great deal. Like I said, it is not for everyone.
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  6. #16  
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    Quote Originally Posted by lacarnut View Post
    I don't believe you understand how a reverse mortgage works. Let's say a couple has a house paid off, they want to continue living in it, they have high expenses and high property taxes and they are barely getting by on social security. They can get around 65%of the appraised value of the house. With the cash that can make their life much easier. The purpose of getting a reverse mortgage is to live in it the rest of their lives. If they have any intention of selling it, the reverse mortgage is not for them. Like I said, a reverse mortgage is not for everyone. The fees are high and the heirs get pissed because they realise in all probability that there will be little equity left when both die.
    After working in the mortgage industry for the better part of the last eleven years, I know what a reverse mortgage is. My point is there are several pitfalls that can happen to older couples if they dont plan properly. Many a time has a reverse mortgage screwed a family over after a death in that family.
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  7. #17  
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    Quote Originally Posted by MountainMan View Post
    After working in the mortgage industry for the better part of the last eleven years, I know what a reverse mortgage is. My point is there are several pitfalls that can happen to older couples if they dont plan properly. Many a time has a reverse mortgage screwed a family over after a death in that family.
    Like I said, a reverse mortgage is not for everyone. People get screwed over every day of the week on things like a regular mortgage or a car. If you don't research what you are buying, there is a chance you will get taken advantage.

    Please explain how a reverse mortgage screwed a family over after a death in that family. The reverse mortgage does not have to be paid back. The homeowner gets about 65% in cash and the death of one spouse does not affect the reverse mortgage. You can either sell the home after the family has passed away or give it back to the mortgage company. Let's hear how the many heirs got screwed????
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  8. #18  
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    While we're waiting for an answer to Lacarnut's question, I have one:

    When you get a reverse mortgage do you always get a lump sum, or can you opt for monthly payments just like a, well, mortgage?
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  9. #19  
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    Quote Originally Posted by TruckerMe View Post
    While we're waiting for an answer to Lacarnut's question, I have one:

    When you get a reverse mortgage do you always get a lump sum, or can you opt for monthly payments just like a, well, mortgage?
    There are 3 options you can take with a reverse mortgage. You can opt for monthly payments and interest accrues only on the amount you withdraw. Secondly, you can take the maximum amount with the highest $$$ and the interest will be a half a per cent more and the fees slightly more. Thirdly you can take a slightly less lump sum amount and the interest rate and fees will be less. Also, you can pay the loan back at any time.

    I got mine thru First National Bank of Layton rather than Met Life because the interest rate was lower. If you are interested, both companies will send you a booklet and based on your age and approximate value of your home, they will send you a detailed schedule of how much you can draw out on a monthly or lump sum basis. You have the flexibility of taking out as much or as little for monthly payments up to the max. amount. Like I said, it is a great deal for me cause I plan to remain in my house and I do not have any kids.
    Last edited by lacarnut; 09-13-2011 at 11:13 AM.
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  10. #20  
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    Quote Originally Posted by lacarnut View Post
    There are 3 options you can take with a reverse mortgage. You can opt for monthly payments and interest accrues only on the amount you withdraw. Secondly, you can take the maximum amount with the highest $$$ and the interest will be a half a per cent more and the fees slightly more. Thirdly you can take a slightly less lump sum amount and the interest rate and fees will be less. Also, you can pay the loan back at any time
    Ok. So lets say the unthinkable happens and a meteor lands on Lacarnut next week. Nuthin' left but your tennis shoes.

    The bank gets the house, right? But you've only had use of the money for a couple of months. Does the bank sell the house, settle the account and pass on the excess profits to the heirs? Or do they keep it all?

    And what if you live another 50 years (Post number 150,000, 654)? Seems like there would be so much interest accrued on the loan that there is no way the bank is going to come out positive. Plus, the house and the neighborhood have gone to hell. What then?
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