I see it advertised on TV. Has anyone done it? Were you happy with your decision later? How will it affect my taxes?
2006-08-21 11:30:07 · 8 answers · asked by kar_summers 3 in Business & Finance ➔ Renting & Real Estate
I read some of the answers and cant believe the information coming out. Your best resource is to go to the AARP website and get the real facts. It is for anyone who is over 62 and you have to have equity in the home. If you currently have a mortgage then it either has to be paid off prior or the Reverse Mortgage will pay it off. You have choices of how to receive the available money, fixed monthly amount, fixed lump sum payment, or an open check book to the amount allowed. The older you are the more you can use. It is FHA insured and you still keep the ownership of your house. The only time the mortgage needs to be paid is if you move out of your house for a period longer than one year. It is for the seniors who need additional income, or that grandparent who wants to help a child or grandchild buy a home, go to school to name a very few reasons why they are beneficial. What about someone who is leaving their home to a charity, why not do a reverse mortgage and see the fruit of the donation while you are still a live. Why not do a HELOC? because if you use the money under a HELOC then you will have a mortgage payment. If you do a reverse mortgage and use the money you do not have to pay it back unless you move out of the house. If you are in California email me and I will send you the brochures. The only thing negative about a Reverse Mortgage is the initial cost that is rolled into the loan. Depends where you live but you will not be able to have access to the total value of your home. gfscfp@dslextreme.com
2006-08-21 14:44:43 · answer #1 · answered by Jennifer G 2 · 0⤊ 0⤋
Reverse amortization is not necessarily a bad thing--that is a matter of opinion. I have originated hundreds of Reverse Mortgages for seniors and I felt good about every one. In each case, the homeowners needed additional monthly income. For most elderly folks on a fixed income, a Reverse Mortgage is the only way they can tap into the equity of their homes. A Reverse Mortgage will increase your net monthly income by removing your current mortgage payment, and in most cases, giving you cash--either a lump sum or monthly installments.
It won't affect your income taxes one bit, since the proceeds from the mortgage isn't income. You will still need to pay your property taxes and homeowner's insurance as usual.
Your home doesn't need to be paid off before you qualify, but you will need to have some equity. Typically, the more equity you have and the older you are, the more you qualify for.
Rick Lanicek
www.primelendingonline.com
2006-08-21 19:50:31 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Reverse amortization is a bad thing and should be avoided.
In a standard mort. you pay a fixed amount that includes principal (amount borrowed) plus interest. So as you make payments you are bringing the loan amount outstanding down.
In a reverse mort. you pay part of the monthly interest and the unpaid amount is added to your borrowed amount outstanding. So you owe more from month to month.
Frankly the only positive scenario for this mortgage is where you have a large inheritance or lottery winnings, and can pay off the loan instead of bleeding from the pocketbook for decades.
2006-08-21 18:42:01 · answer #3 · answered by Thomas F 3 · 2⤊ 0⤋
It is for people with home equity who need income. The rates are atrocious by the standards of other loans at the same credit situation.
If you've got enough income to live comfortably, don't do it.
If you don't have enough income, there are usually better alternatives. Downsizing - selling the property and moving to a smaller one - is most often the one that makes the most financial sense. Of course, if they don't want to sell the house they've lived in for however many years, that's not an option. If all you need is standby money, Home Equity Lines of credit are superior.
Yes, I'm willing to do RAMs. But there is usually a better alternative.
2006-08-21 20:10:50 · answer #4 · answered by Searchlight Crusade 5 · 0⤊ 0⤋
They are cash out loans for senior citizens over the age of 62 who's homes are paid off and it uses the equity to make the loan payment.
2006-08-21 18:42:19 · answer #5 · answered by copleybailey 1 · 0⤊ 0⤋
A reverse mortgage was designed for older americans who own their homes outright, and are having a cash flow problem. It lets them draw a monthly sum out of their home's value so that they can live in the manner in which they are accustomed. Its not for young people.
2006-08-21 18:40:07 · answer #6 · answered by smartypants909 7 · 0⤊ 1⤋
It's when you sell your house to the bank and they pay you a small stipend. If you are under 80 with no inheritors, don't do it. It benefits the banks, not you.
2006-08-21 21:25:46 · answer #7 · answered by Anonymous · 0⤊ 0⤋
read tips on real estate and mortgages that might help you more on this site
2006-08-21 18:38:29 · answer #8 · answered by Anonymous · 0⤊ 0⤋