Reverse Mortgages?

[RodISHI]

My parents have a fairly pricey home paid for and they are considering a Reverse Mortgage.

Any thoughts on these?

Are they good? Bad?

If you know can you give me some pointers on watching out for their best interest and of course possibly my inheritance.

 

[Bern80]

My parents have a fairly pricey home paid for and they are considering a Reverse Mortgage.

Any thoughts on these?

Are they good? Bad?

If you know can you give me some pointers on watching out for their best interest and of course possibly my inheritance.

I know the loan doesn't get paid back until they move or die. Which I would think would bring up the question If they are strapped for cash it can be set up as a lump sum or an annuity. I guess the big question for you and siblings if you have them is who will be on the hook if/when they die. And are the planning on staying in the house long enough for it to be worth while.

 

[Article 15]

What if you don't die?

 

[Care4all]

i don't think they loan you more than what you have in equity in your home?

they pay your parents monthly, your parents pay no income taxes on this money.

when they die, and the home is sold, the banks get what they loaned out to your parents back, plus interest, the inheritees get what is left, if anything.... is my understanding...?

 

[Bern80]

i don't think they loan you more than what you have in equity in your home?

they pay your parents monthly, your parents pay no income taxes on this money.

when they die, and the home is sold, the banks get what they loaned out to your parents back, plus interest, the inheritees get what is left, if anything.... is my understanding...?

siunds about right. sounds basically like home equity line of credit, but cash to me.

 

[GHook93]

I work with a lot of reverse mortgage company's. Bottom line they are not a horrible option for the owners, but horrible for the inheritants. The reason you have to be 65 for a reverse mortgage is because the mortgage company is banking on you dying. Once the owners die they inheritants get nothing!

I see them as a taking advantage of people in vulnerable situation, a step above pay day loans. Bottom only people in trouble of losing their homes to foreclosure or have no one to leave their home to should consider them! If not, then just say NO!

 

[editec]

I haven't looked into them but I SUSPECT they're a rip-off.

 

[Bern80]

I work with a lot of reverse mortgage company's. Bottom line they are not a horrible option for the owners, but horrible for the inheritants. The reason you have to be 65 for a reverse mortgage is because the mortgage company is banking on you dying. Once the owners die they inheritants get nothing!

I see them as a taking advantage of people in vulnerable situation, a step above pay day loans. Bottom only people in trouble of losing their homes to foreclosure or have no one to leave their home to should consider them! If not, then just say NO!

True, but there is a school of financial thought that says parents shouldn't leave anything to their children anyway (read: Die Broke). At the very least it's a good way to avoid taxes. You can't owe on nothing.

 

[RodISHI]

I haven't looked into them but I SUSPECT they're a rip-off.

I'm thinking along those lines too. My ex son-in-law went to work for one of those outfits some years back but did not last long at it. He never said exactly why. I'll have to ask my daughter if she knows why he did not stay in California doing that when I see her.

 

[RodISHI]

I work with a lot of reverse mortgage company's. Bottom line they are not a horrible option for the owners, but horrible for the inheritants. The reason you have to be 65 for a reverse mortgage is because the mortgage company is banking on you dying. Once the owners die they inheritants get nothing!

I see them as a taking advantage of people in vulnerable situation, a step above pay day loans. Bottom only people in trouble of losing their homes to foreclosure or have no one to leave their home to should consider them! If not, then just say NO!

Do they have any regulations that they have to follow?

"Banking on dying", Is that because they are hoping people die at a younger age?

I ask that because if this claim on the stimulus package complaint thread on here about the government limiting care for eldery in some manner does not look good for the people yet adds more assets to the banks.

 

[GHook93]

I haven't looked into them but I SUSPECT they're a rip-off.

I'm thinking along those lines too. My ex son-in-law went to work for one of those outfits some years back but did not last long at it. He never said exactly why. I'll have to ask my daughter if she knows why he did not stay in California doing that when I see her.

Reverse mortgage are still a much better concept then subprime loans!