My parents may be gettng a reverse mortgage, Not sure if its the best thing for them, although it is none of my business. I think they are to young to do this and they don't owe very much on their house.
2007-03-14 18:55:10 · 8 answers · asked by almostready 2 in Business & Finance ➔ Personal Finance
Downside - they get it at 62 or 65, 66, whatever. They spend the extra cash over say, ten years. In ten years the money in the house is gone (principal + interest) and one or both needs to move into nursing home/assisted living. They may be left more or less broke. Other than that, reverses are an excellent option
2007-03-16 19:54:11 · answer #1 · answered by Byron W 3 · 0⤊ 0⤋
If your parents are not getting enough financial support from you they have no other option but to look for regular monthly support from other source. And reverse mortgage is the most respectable source for them. It is their right to live respectably. After their death, the bank will calculate the amount paid to them together with interest and ask you as a nominee to pay the dues if you want the mortgaged house back or otherwise sell the house which is mortgaged to them, recover their dues and pay the residual amount to the nominees equally. It is that simple.
2007-03-14 19:17:37 · answer #2 · answered by KVISHWAS 3 · 0⤊ 0⤋
My father in law had a reverse mortgage. He passed away about 8 months ago. It helps people out that do not have a large savings or other investments to rely on for retirement. It worked out well for him, since he lived in a very expensive area in California where home prices continued to escalate. After selling his house, we had some money to split between the heirs, but nothing really large. It allowed him to receive monthly payments based on his mortgage and lived comfortably, but certainly not with any extravagances. Here is a website that explains how it works:
http://www.reversemortgagelenders.org/rm/rm_how.html
2007-03-14 19:06:16 · answer #3 · answered by Inquisitive 4 · 1⤊ 0⤋
I think it's fabulous; I'll be doing it as soon as I can (age 62).
The only down sides I see are (1) not being able to leave the house (or the money from the sale of same) to heirs; and (2) the fact that you only get it while you live in the house, so if for some reason you have to leave--like if you have to go to a nursing home--the loan becomes due.
2007-03-14 19:04:54 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Thats the idea that they have equity in the house that they use to setup a reverse mortgage. Here is an article on how they work - http://www.regionalmortgages.com/reverse.html
2007-03-15 04:04:17 · answer #5 · answered by Anonymous · 0⤊ 0⤋
If it goes on long enough you end up owing more than the house is worth. So when it comes time to sell it,you might just as well turn the house over to the loan people
2007-03-14 19:06:11 · answer #6 · answered by Anonymous · 0⤊ 0⤋
It's a great idea for older folks who don't have enough retirement funds to live on. Only downside is, they will not have the house to leave behind. Are you concerned because of this, or because of the well being of your parents?
2007-03-15 02:46:03 · answer #7 · answered by Monstblitz 4 · 0⤊ 0⤋
in united states , they're the worst product that rips human beings off of their homestead. u favor some severe information of the way it truly works. u should be satisfied u did not signal papers. right here they're finished of severe expenditures and gotchas. do you homework heavily. IF u have fairness communicate including your banker for a house fairness Line OF credit b4 opposite loans. sturdy information is sturdy success. u favor more beneficial of both.
2016-12-02 00:58:56 · answer #8 · answered by ? 4 · 0⤊ 0⤋