what are the advantages to a reverse mortgage?

Question

are there any advantages to a reverse mortgage and if so ,, what are they.

also can a home owner with poor credit qualify??

Answer 1

A reverse mortgage is a way of selling your house back to a bank. Every month the bank sends you a check, but the house isn't yours anymore. You can continue to live in the house until you die, but you can't leave it to your heirs because it will belong to the bank.

Reverse mortgages are a good idea for old or sick people who need money and know this is the last place they will ever live. Other than that it is a raw deal.

Answer 2

Reverse mortgages are great for the consunmer but bad for the estate of the consumer. As the previous answers suggest the house is sold and you do not own it any longer. What this mortgage does is provide for the owner/tenet to live in the house until he/she passes and the bank or individual who buys the house pays for all utilities, taxes etc. Contrary to popular belief the reverse mortgage is not restricted to only a bank or a mortgage company. An individual investor can also offer a reverse mortgage.

Answer 3

The Pros:

1. No monthly loan payments (lender makes payments to you, instead)

2. No income or credit qualifications (loan is secured solely by the home's value)

3. Non-recourse loan (no matter how much you borrow and how much interest accrues), you or your estate will never owe more than the market value of the home

4. Several flexible payment options (line of credit, monthly lifetime payments, lump-sum, and combinations of these)

5. Probably the safest way for senior homeowners to tap their home equity (short of selling) which is the single biggest asset for most retirees

6. Allows senior homeowners to remain in their home.

Cons:

1. High fees and closing costs - not a good deal if there's a good chance you would move or die within five years

2. Reduces flexibility and future options - you're more tied to staying put

3. Can rapidly deplete home equity stake, particulalry where home values are stagnant or declining. Reduces value of your estate.

Answer 4

the best thing about a reverse mortgage is that when you die, you kids don't have to fight about what to do with your house... the bank takes it... either that or the kids can buy it back from the bank.

Listen to Dave Ramsey for about an hour and you'll find out just how bad they are...

all they do it put you deeper in debt that your kids will have to pull you out of.

you want to leave your children a legacy... not a pile of debt.


don't do it

Answer 5

My inlaws were in the process of signing up for a reverse mortgage.. got an ad out of AARP. Stopped them. Told them. it's your money....but also showed them the downside. .It's a great idea for the companies offering it. .but lousy for consumer.