Reverse Mortgages

[Bayard]

I'm not sure if this is the right forum for this question, but I didn't see anything else closer.

Anyone out there have experience with reverse mortgages?

[alwaysinasnit]

1. We had a neighbor, an elderly gentleman, who apparently did one of those. It was not uncommon

to go weeks without catching sight of him - he was not very friendly. The first indications we had about his passing were the legal notices posted in several places on the front of the house. Long story short, the adult child/children fought the reverse mortgage and won. Apparently the old gentleman might have had some cognitive issues that the reverse mortgage company took advantage of. My best recommendation is to consult with an experienced attorney about the potential pitfalls. You can try going through a local lawyer referral service. Good luck!

[3Hotdogs]

2. From what I've read or heard, it's a bad choice for most people. If you outlive the term of the mortgage, you may lose

your house. If you are having trouble keeping up with the expense of running the house, consider selling it instead.

The only time I would consider a reverse is if I were given a terminal diagnosis.

[Grins]

3. AVOID!!! Lots of articles out there.

Think of it as a credit card with all your equity from the sale, say $100,000, given to you by the reverse mortgage company.

You think you have $100k, but it’s actually an annuity to the mortgage company. And every month they take their cut. And one day, years later, you turn around and, “Where’s my dough???”

[no_hypocrisy]

4. I know a married couple, in their Seventies and Eighties.

The husband had his own business. But he mismanaged the funds and panicked.

He wanted to get a reverse mortgage to keep the business going. The terms of the mortgage were explained to him, but he didn't fully understand. But his wife did. And she cried and pleaded with her husband not to force her to sign the papers as she didn't want to be homeless when he died.

But he made her sign the papers.

The husband thought that if he could garner enough assets, he could buy his way out of the reverse mortgage. But instead, he found that the interest and the rise in property value made that impossible. He was stuck.

Now he's over 90, in bad health, and his wife has to work in order to pay the taxes, utilities, etc. She doesn't have the money to continue to keep their marital home. The assets of her husband are gone. IOW, when her husband dies, she has a certain amount of time to assume the mortgage or move out, maybe 90 days. She will be homeless.

While the wife can think, "I told you so," it won't matter.