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In reply to the discussion: I'm considering a reverse mortgage on my house. Anybody here have one, or know something about them? [View all]Shermann
(8,681 posts)28. If you run the numbers they aren't as predatory as they might seem (assuming the bank is reputable)
The bank is loaning you money and the interest will accrue, and they might not get anything back for 30+ years. They cap the loan amount such that they are unlikely to lose money. That means you will only be able to access a percentage of the equity in the house, maybe 20%. After such a long period of time, all that accrued interest means the bank might get the rest. They are taking a risk here and banks get paid to take risks. But you get to stay in the home as a significant fringe benefit and never have to make loan payments.
If you want to access closer to 100% of the equity you have to liquidate the house and rent. But there are costs associated with that as well.
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I'm considering a reverse mortgage on my house. Anybody here have one, or know something about them? [View all]
CTyankee
Oct 4
OP
We are in our 80s and hubby is handicapped. No, we don't have accommodations for renting a room.
CTyankee
Oct 4
#4
Yes, he is. My tax guy is not; he's solid and can give me good advice. I don't think we are his first clients who have
CTyankee
Oct 4
#6
The money he borrowed accumulated interest to the point where there was no equity in the house. He died and left
OLDMDDEM
Oct 4
#10
We don't have kids from this marriage. Neither his nor my kids would even want it and would consider it to be a pain in
CTyankee
Oct 4
#12
I understand your points. There are up front fees also. My neighbor's fees were about 15% of the borrowed amount.
OLDMDDEM
Oct 4
#13
That seems like a lot. I don't know CT's tax in my case. Again, a question for my accountant who is very familiar with
CTyankee
Oct 4
#14
The key thiing here is that we get to stay in our house. The escrow amount just went up A LOT.
CTyankee
Oct 4
#20
I am going to the bank that holds our mortgage to discuss this with them. They might have an idea for us.
CTyankee
Oct 4
#22
If you've owned your house for 25 years, it must be worth a whole lot more than you paid for it!
Vinca
Oct 4
#23
We did consider it but we love our home and want to stay in it for as long as we can.
CTyankee
Oct 4
#25
I have not done it, but I am extremely suspicious. Do your research. Depending on your state, you may be..
surfered
Oct 4
#26
If you run the numbers they aren't as predatory as they might seem (assuming the bank is reputable)
Shermann
Oct 4
#28
Reverse mortgages are not terrible if you can get over some psychological hurdles
MaryMagdaline
Oct 4
#29
I don't know if they have changed since I did mortgages but I did not recommend them to any clients.
Bev54
Oct 4
#31