| T O P I C R E V I E W |
| Marybeth |
Posted - Dec 07 2009 : 07:47:27 AM
Has anyone or their parents or grandparents done a reverse mortgage? What are the advantages or diadvantages? MB
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"Life may not be the party we hoped for...but while we are here we might as well dance!" |
| 15 L A T E S T R E P L I E S (Newest First) |
| kissmekate |
Posted - Dec 20 2009 : 8:48:17 PM
My Grandma did this. Please research-research-research!!!
I think for her, it turned out okay.
I don't think her kids won't get anything out of the house, but three out of the four could care less about that.
the one that does, is the one who got her into this mess in the first place. (Did I just say that out loud???  )
Don't miss out on a blessing, just because it isn't packaged the way you expected. ~MaryJo Copeland |
| Marybeth |
Posted - Dec 19 2009 : 3:38:01 PM
No you don't pay taxes on it because it is not income---it is a loan.
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"Life may not be the party we hoped for...but while we are here we might as well dance!" |
| kpaints |
Posted - Dec 19 2009 : 11:49:49 AM
And does the HO have to pay taxes on this money as if it is income?
Find your joy and live it. http://cheneybaglady.blogspot.com/http://www.kpaints.etsy.com http://www.thevintagebaglady.etsy.com FG #377 |
| jpbluesky |
Posted - Dec 18 2009 : 4:19:47 PM
I would not recommend it unless absolutely necessary. But if it helps someone stay in their home....
Farmgirl Sister # 31
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| Marybeth |
Posted - Dec 08 2009 : 8:48:55 PM
Rosemary and Julie are right in what they said. Apparently there are three ways you receive the money---one lump sum and it is gone when you spend it all---a monthly amount and a line of credit. the line of credit seems the best because you don't pay back what you don't use and also when you aren't using it is can draw interest. It is a very interesting concept and if seniors have lots of equity and need money or just want a cushion because SS doesn't pay much and want to stay in their home it may work for them. The older you are the more money you get. If you are planning to stay in your house or live a long time you can even refinance as your equity grows. Always go to a legit lender and you also have to go to counselling by a unbiased party to make sure it is not a scam deal. The closing costs are very high which is the biggest disadvantage.
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"Life may not be the party we hoped for...but while we are here we might as well dance!" |
| 4HMom |
Posted - Dec 08 2009 : 6:36:58 PM
My Mom is talking about doing it, but I just am not comfortable with the idea....I've heard as many positives and negatives...I'm watching this thread closely.
"Be the change you want to see in the world" -Gandhi |
| Aunt Jenny |
Posted - Dec 08 2009 : 1:26:35 PM
Julie..that sounds like what my mom said her reverse mortgage was like. She is in Calif. She got a big amount all at once (long gone now)
Jenny in Utah
Proud Farmgirl sister #24
Inside me there is a skinny woman crying to get out...but I can usually shut her up with cookies
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| paradiseplantation |
Posted - Dec 08 2009 : 05:06:10 AM
My aunt did this. I don't know if it's the same from state to state, but they gave her 60% of the appaised estimate of her home. When she dies, the house is then sold, and from the proceeds, the loan plus interest is repaid to the lender. If there is money left over, it goes to the heirs. If it sells for less than the loan amount, then the lender basically loses that difference. It is complicated, and I would strongly recommend that you check out the lender thoroughly before you sign. I've heard of only one company around here that appears a bit shady, but with the way the world is today, there are probably more. As far as if I like it or not, let's just say the jury is still out. I'm not sure I would do it, but so far, there have been no repercussions for Aunt Emily.
from the hearts of paradise... |
| City Chick |
Posted - Dec 08 2009 : 04:30:06 AM
A friend of mine parents did this when they were strapped for cash. It worked wonderfully for them. BUT now that she has moved in with them with her children, they're really wishing they hadn't done it. They're in their 80's now and wish they could leave the house to my friend so she could live there with her children. There is no way my friend could afford to purchase the house on her own.
Farm Girl #790
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| AmethystRose |
Posted - Dec 07 2009 : 10:35:19 AM
It is for people who are cash poor but house rich. Say you bought a house in 1970 for 20K, but it is now worth 200K and you own it free and clear. (I am using my mother's house as an example.) In a reverse mortgage you borrow the equity that has built in the house. |
| Marybeth |
Posted - Dec 07 2009 : 08:59:52 AM
The one misconception is that you sell your house. You don't sell your house--you retain title and all that involves. based on your age and the value of your home you can receive a determined amount to be received monthly or all at once or in a line of credit. The money that you actually use is what you have to pay back when you either die or sell your house. If the house sells for more than the loan the heirs receive the overs. the big disadvantage are the closing costs and insurance required.
Has anybody actually done this? MB
http://www.smallcityscenes.blogspot.com
www.strawberryhillsfarm.blogspot.com
www.day4plus.blogspot.com www.holyhouses-day4plus.blogspot.com
"Life may not be the party we hoped for...but while we are here we might as well dance!" |
| Aunt Jenny |
Posted - Dec 07 2009 : 08:23:24 AM
My mom did it with her house a few years ago (she is 71) I can't say I understand it, or think it is a good idea (could be because I don't understand it though) but it did help her out financially after my dad died.
Jenny in Utah
Proud Farmgirl sister #24
Inside me there is a skinny woman crying to get out...but I can usually shut her up with cookies
http://www.auntjennysworld.blogspot.com/ visit my little online shop at www.auntjenny.etsy.com |
| italianchildhood |
Posted - Dec 07 2009 : 08:18:21 AM
I don't know all that much about them, I do believe there are a lot of fees involved.
The way they work basically, yes, you "sell" your house--not to the government, to a bank--and you get paid for it over time. When you die, it depends I think on how much they've paid you up to that point.
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| Miss2Missus |
Posted - Dec 07 2009 : 07:58:26 AM
I can't swear to it so i may be completly wrong, but i had heard mention by my parents that in doing a reverse mortgage you are basically selling your house to the government and that wheny ou die it will not be passed on to your heirs.
Karen ^_^
http://frommisstomissus.blogspot.com/ |
| Alee |
Posted - Dec 07 2009 : 07:53:25 AM
I would be interested in learning more about this as well for my grandparents.
Alee
Farmgirl Sister #8
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