Reverse Mortgages??????

[rsmith6621]

..........Like the Home ReFI adds earlier in this decade now they are advertising reverse mortgages....so with that are RMs a good deal for Senior home owners or another predatory trap.

[Quantess]

1. The lender gets your house when you die.

Sorry, kids!

[flvegan]

3. Not if you have life insurance to pay off the mortgage in the event.

You really have to crunch numbers to see if you're getting the deal you think you are, though.

[dipsydoodle]

8. You ust be joking - they're not open ended

without interest roll ups at best when you reach end of the term. If you're still alive then how's your life insurance going to solve the problem ? It becomes - can't pay, can't stay. Given that the morgage won't have been based on full value, the mortgagors , especially the crooked ones , won't hesitate to fuck old folk bigtime.

Sig lines are off but mine would normally say "what the big print giveth the small print taketh away"

[flvegan]

9. Did you read

specifically what I was responding to?

Didn't think so.

[dipsydoodle]

12. Missed that - sorry

but I was adding the issue of not dying. It's been going on here in the UK for years and is currently under investigation by our FSA under the heading "mis selling"

[K8-EEE]

2. Another way to transfer wealth

From middle class families to corporations

[Stinky The Clown]

4. It seems to me the ones going to get hurt are the kids of these people, hoping for a few bucks ....

.... when Dad kicks.

And maybe that ain't all bad.

Honestly, I asked this a while ago. I never got a definitive answer. I am very wary of anything that sounds terrific but needs heavy advertising to sell it.

[SidDithers]

5. If I understand it correctly, they're similar to an annuity...

except you use your home equity as the principal, and you continue to live in your house.

They're not a scam, but they're also not for everyone.

Sid

[dipsydoodle]

6. Fraught with danger

.

[El Supremo]

7. Check this out:

http://www.aarp.org/money/revmort/revmort_basics/a2003-03-21-revmortfactsheet.html

Bottom line - they can be expensive.

[Lex]

10. If you are cash-poor, but equity-rich in your home, it can be a good deal

under certain circumstances. It can allow the homeowner to stay in his home and receive payments from the bank.

[KSinTX]

11. It would have to be a SEVERE emergency for me

"Because you make no monthly payments, the amount you owe grows larger over time. As your debt grows larger, the amount of cash you would have left after selling and paying off the loan (your "equity") generally grows smaller."

This amount can never grow to more than the house is worth but it can suck up the full value of the home. If you have an uncovered medical expense and no other assets, I could see possibly doing it. Since you get to live in the home until death (you still have to pay property taxes, insurance, and repairs and failure to pay could make the loan due immediately) it's not a bad idea to consider later in life (80+).

[dysfunctional press]

13. there was a woman in france who got one of the very first ones...

selling her house to an attorney- who agreed to pay her a certain amount until she died, and then get her house- she was in her 70's iirc, but lived to be over 100, outlived the lawyer who had bought it- and his widow had to continue making the monthly payments until the woman died. ultimately the old lady got to live in her house until she died, and ended up recieving more money in payments than it was worth.