7,751
A reverse mortgage can be a wonderful option under the right circumstances, especially for a new home purchase. Ideally, the homeowners are planning on staying in their home the rest of their lives. Say someone is 62 and they take out a reverse mortgage and he/she lives well beyond the 30-year term of the mortgage. The lender does not call the loan due or attempt to force a sale. So if grandma lives to be 99 years old (7 years past the mortgage term) she can continue living in her home well beyond the term of her mortgage. Further, when grandma passes away the lender allows the heirs to refinance or sell the home for the fair market value and any remaining equity goes to the heirs. The lender allows a year for the heirs to list and sell the property and in really difficult sales markets, the lender will likely extend the time required to sell. If the reverse mortgage loan is higher than the sales costs then the bank will agree to a short sale and obviously, this does not go against the heir’s credit. In the past, reverse mortgages could be a higher percentage of the property’s value but the mortgage crisis changed that. Now reverse mortgages require a much greater down payment/equity position. If you have nice retirement savings/investments it can stay in the bank and continue earning interest rather than you paying it towards your mortgage loan. If you were 65 years old, low income and still had a mortgage payment that was hard to pay every month what would you do? Sell your home and pay rent? Rent continues to increase and your landlord is not going to care if the rent goes higher than you can afford. Within several years you would likely burn through most of your savings. If you took out a reverse mortgage you could always elect to make some kind of monthly mortgage payments if you want to and doing so would slow down or stop the rate of reverse equity buildup and leave more equity for the deadbeat grandson. (Joking) But you get the idea.
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Matthew Hamlin
Santa Clara, UT
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Jess Pealer
Salt Lake City, UT
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Fred Griffin Florida R...
Tallahassee, FL
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Bob Crane
Stevens Point, WI
1,466,257
Minnette Olsen Read carefully and between the lines. Reverse mortgages aren't for everyone.
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Fred Griffin Florida R...
Tallahassee, FL
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Nina Hollander, Broker
Charlotte, NC
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Bob Crane
Stevens Point, WI
5,583,328
the loan needs to paid off when the senior dies.... either the home is sold and can't be left to the heirs....or the heirs need to pay it off with other money they inherit.... not ideal!!!
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Nina Hollander, Broker
Charlotte, NC
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Bob Crane
Stevens Point, WI
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Fred Griffin Florida R...
Tallahassee, FL
5,117,178
## I see the hashtags are back. ## I have never had anyone ask me about a reverse annuity mortgage, so personally I have no concerns. ##
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Michael Jacobs
Pasadena, CA
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Fred Griffin Florida R...
Tallahassee, FL
3,988,013
The pressure the family feels when the house has to be sold or refinanced. The time frame can be burdensome.
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Fred Griffin Florida R...
Tallahassee, FL
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Nina Hollander, Broker
Charlotte, NC
6,426,255
My opinion of them is not very high.
They seem to target seniors with lots of small print that often ends in a very bad situation for the seniors and their heirs.
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Bob Betel
Sweetwater, TN
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Bob Crane
Stevens Point, WI
4,800,132
Something that I allow financial planners and lenders to answer.
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Nina Hollander, Broker
Charlotte, NC
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Bob Crane
Stevens Point, WI
2,684,769
## I just met a crying family; they are losing the "family homestead" because Daddy passed away recently, he owed the bank major $$$ for a reverse mortgage. None of the family members has the cash or can qualify for a new mortgage to pay it off.
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Nina Hollander, Broker
Charlotte, NC
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Bob Crane
Stevens Point, WI
4,584,596
## Costs.
## They ## are back, Ryan Huggins - Thousand Oaks, CA
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Ryan Huggins - Thousan...
Thousand Oaks, CA
4,319,873
Minnette Olsen - heard not so great things about it, never associate with one, yet.
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Nina Hollander, Broker
Charlotte, NC
2,222,281
I am not familiar with that type of mortgage.
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Anthony Acosta - ALLAT...
Atlanta, GA
5,063,430
I can't add anything to what's been said below. Seems to me there are more cons than pros
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Nina Hollander, Broker
Charlotte, NC
1,617,916
3,071,589
4,434,177
7,871,831
A reverse mortgage can be a lifesaver for some seniors.
Make sure you understand the use.
1,507,073
3,986,308