2007-01-19 19:30:58 · 3 answers · asked by DJ 2 in Business & Finance ➔ Credit
The con is that you have to correctly estimate how long you will survive. If you estimate 85 years and you live to be 95, you will be homeless for 10 years, and a miserable 10 years at that. The pro is that if you guessed correctly, you will have a monthly income for your property right up the the point where you don't need the money anymore.
2007-01-19 19:37:27 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The first thing is simple. Why is a senior going into debt? I have had this discussion at least 10 times. It goes like this....Well rates are low, we will never own our house anyway, the interest is tax deducable, the rates are lower than our credit cards, etc. These do not answer the qestion, what is causing a senior (or anyone for that matter) to need to borrow more money? It means your spending is too high. Another option may be to downsize, it address the core problem, not the symptom. Sell the house invest any proceeds and find lower cost housing.
I am sure there are some good reverse mortgage programs that are fair and resonable, and I think some do not require the person to turn over the house, even if they stay in it past the payout point.
The pros are you get a no payment required loan, but the interest compounds. Cons could be, fees, higher rates, other restrictions regarding getting out early.
2007-01-20 05:58:45 · answer #2 · answered by Gatsby216 7 · 0⤊ 0⤋
pros - help for the loanee at the most needed hour, help pay back parents using their own resource.
cons - could be misused if not properly formatted
2007-01-20 03:35:40 · answer #3 · answered by maynze2000 3 · 0⤊ 0⤋