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moneypit
04-11-2007, 10:30 AM
I Have a retired family member that is single living on a fixed income. The topic of reverse mortgage came up. Anyone use these? Any good? Pro's Con's... Input is appreciated...

Do F150's Float?
04-11-2007, 10:35 AM
Pros: No more monthly mortgage payments, they get a certain amount monthly paid to them, or a lump sum, or a combination of both.
Cons: There are high fees involved (it's an FHA loan), property must be up to FHA standards (so any repairs have to be made), they take at least 60 days to close.
Not a bad option though for someone who is retired. It would be nice not to have to worry about mortgage payments!

EmpirE231
04-11-2007, 10:38 AM
My GF's father works with these... and explained them to me... I kinda remember a bit of it. one thing was they never have to pay off the loan unless they sell the home. and they get a fixed income, etc no mortgage payment. sounded pretty good for people that are retired. I can get you in contact with him if you'd like.

Mandelon
04-11-2007, 10:41 AM
They seem to be a great solution to those who are retired and house rich, but cash poor.
You do not have to own the home free and clear. You do have to have a good amount of equity though.
You get a calculated payment for the rest of your life, or until you move out of the home.
Once that happens your heirs can refinance the home and keep it in the family once the senior moves out. The bank does not own the home.
You do not have to make any more payments. But you do need to keep up with taxes and insurance.

YeLLowBoaT
04-11-2007, 10:43 AM
They are almost always a bad deal. Fees are killer, some programs have you paying intrest on intrest( or I should say your next of kin) If you ever need a lump sum( say you have to go retirement home) you will take bath. Normally when you die the bank gets the house regaurdless of how much they have paid out( which I bet is how they make most of thier money)
9 out of 10x its better to take a lumb sum out and put it in a intrest barring account and make monthly withdraws from that account.

Benjhamina
04-11-2007, 10:48 AM
They are almost never a good idea. The bank will give you a % of the value of the home (50-80%) and how much they give you depends on a few things. One of them being the age and health of the applicants. (the closer to death they are the more they can get) If they want to live off equity do a line of credit. The reverse morgage is a good way to give the bank a good portion of your equity.

essexjet
04-11-2007, 11:15 AM
Here is a loan calculator for reverse mortgages
http://www.rmaarp.com/

nice and easy
04-11-2007, 01:03 PM
I am a mortgage broker in arizona. reverse mortgages are good for some people with certain needs and circumstances. Just for the record, many
people that could use reverse mortgages do not do so because there heirs
tell them that is is not a good deal. I can tell you about two specific loans.
A couple, he is 70, she is 65. both retired this year. have soc. sec income
only. Owes $ 50,000 on a $ 250,000 home. Took our reverse mortgage
and eliminated house payment. 2 yrs later, refinanced reverse mortgage with
another reverse mortgage and obtained a line of credit of $ 48,000 due to
increase in mortgage limit (per country). Enough of the loan stuff. what this
did was to free them from a mortgage payment, give them enough money to
make the improvements to the house that they wanted to do, and gave them
enough money(credit line which earn interest) to do the things that they want to do such as go to europe, take grandkids to disneyworld. With out
the reverse mortgage, they would have been stuck, strapped with a mortgage
payment and unable to do the things that they really wanted to do. I think i am running out of room. My e-mail is ronbulleigh@mtsfinancialaz.com

Rackman
04-11-2007, 01:14 PM
I Have a retired family member that is single living on a fixed income. The topic of reverse mortgage came up. Anyone use these? Any good? Pro's Con's... Input is appreciated...
My Mom took out one 4 years ago...made the last years of her life worry free. Well worth the cost IMO.