Reverse Mortgages

[BadgeBunny]

David Ramsey if free to have his opinion... But he's very much incorrect on the topic of RM's.

I am not trying to pick a fight with you. I have a neighbor who is seriously considering a RM but neither he nor I can find any long term good in one.

So I am really curious as to why you think Dave Ramsey is "very much incorrect" on this. Thanks for the info!!

 

[poopgiggle]

David Ramsey if free to have his opinion... But he's very much incorrect on the topic of RM's.

I would like to see a point-by-point rebuttal of what he says, not "welp he's entitled to disagree with me!" Don't cop out.

Notice how things like closing costs are things you'd have to pay anyways if you sold the house instead of screwing around with this mortgage business...

 

[poopgiggle]

Call it as you want, but it's akin to saying that anything you purchase is causing you to lose money. That may be true in the simplest description but if it has value to you than it has worth.

Finance is like math; specific words have very specific meanings, and using the wrong word can totally alter the meaning of what you're saying. By saying, "you're not losing equity," to a potential customer you're basically committing fraud.

No, I'm simply pointing out that there are fee's associated with selling a home which you did not mention.

Already said this, but RMs mean you'll have to pay those anyways

Also this is an even worse response to what I originally said. So you're acknowledging that you have to pay far more to the bank, rather than just selling the house? I want to see where this goes.

 

[MaddSkillz]

Seriously MaddSkillz, you're in a bad racket.

I'm not involved in any way in RM's.

I know your background is in IT, not finance, and you just got into selling these, so my guess is that you believe what you're saying and you're not trying to screw pensioners out of their money. I'm just asking that you look beyond the sales pitch and look into why so many well-respected financial writers/advisers keep saying these are a scam.

Well, we'll just have to agree to disagree.

I'm up for answering questions but don't really want to spend an hour going point by point on the Dave Ramsey stuff in one complete post.

Didn't know this was going to turn into a cut and paste debate. Ugh.

 

[MaddSkillz]

Finance is like math; specific words have very specific meanings, and using the wrong word can totally alter the meaning of what you're saying. By saying, "you're not losing equity," to a potential customer you're basically committing fraud.

But I'm not saying that nor ever said that. I know what you're getting at, but like I said, before it's not rabbit in the hat. The equity isn't just lost, it's used. It's the most negative slant was placed on it by stating "oh, you're equity is lost." The reality is, there's lots of seniors who could use the equity to do with as they please and continue to live in their home. To them, that has value.

 

[poopgiggle]

I'm not involved in any way in RM's.

But...you're selling them?

I'm up for answering questions but don't really want to spend an hour going point by point on the Dave Ramsey stuff in one complete post.

So you're up for giving a sales pitch to laypeople but not for responding to intelligent criticism from financial professionals?

 

[poopgiggle]

But I'm not saying that nor ever said that. I know what you're getting at, but like I said, before it's not rabbit in the hat. The equity isn't just lost, it's used. It's the most negative slant was placed on it by stating "oh, you're equity is lost." The reality is, there's lots of seniors who could use the equity to do with as they please and continue to live in their home. To them, that has value.

Yeah but the point is that RMs are an unwise use of equity.

 

[MaddSkillz]

But...you're selling them?

No, I'm not.

So you're up for giving a sales pitch to laypeople but not for responding to intelligent criticism from financial professionals?

Oh I'm completely game for it. Honestly I just don't want to go line by line through it. I read Dave Ramsey's spill over them and laughed, honestly. Some of it is somewhat correct, but it's like a car salesman saying, "oh you can have this car, but you're gonna have to keep air in the tires, put gas in it, get regular maintenance, keep insurance on it because you could be in a crash, you also may get ticketed if you exceed the speed limit, you might have to pay for parking in some parking lots, it could possibly rust and you'll need a warranty because it may not make it 100,000 miles."

So obviously owning a car is a bad idea.

 

[Glocktogo]

Wow, I've sat in a room full of people like this, explained Reverse Mortgages to them and they had a complete change of tune after the meeting. I really don't understand why people make blanket judgments on something like this.

How is eliminating a house payment for a senior who can no longer afford it a bad thing? And where are people getting the idea that the equity is lost? Ever heard the phrase house rich but cash poor? That defines a lot of seniors today. What's wrong with a senior being able to live in their house and then using the equity in their house to improve their financial way of life? The only alternative (to stay in the home, and most seniors want to) would be to get a second home loan but then they'd have to make payments, so that doesn't help their monthly expenses at all and can compound the problem.

Are you all familiar with the growing line of credit?

This is one issue that David Ramsey is completely wrong on. I'd love to sit down with the guy and talk to him, but I'm a nobody.

So ask away, I'd love to answer your questions as it seems many of you have the wrong information.

So do you do reverse mortgages with no fees, or low fees where the buyer (broker) pays mortgage fees just like a regular house buyer would? I guess my question is, how does the reverse mortgage broker get rich? Off the sale of the home when they finally take possession of it? Or off the fees they charge the elderly/terminally ill person?

Seems like a legal scam to me. I understand the attractive nature of the scheme. Get money now, just like J.G. Wentworth gives you on your trust or annuity. But who really benefits the most here? The seller or the buyer? Somehow I envision that it's the buyer. I guess if I was terminally ill and had no heirs it might be worth the high price, but I'm sure it wouldn't be a pleasant choice to make.

 

[MaddSkillz]

Yeah but the point is that RMs are an unwise use of equity.

Some people would say purchasing a domestic vehicle is an unwise use of money.

It all depends on how broad a brush you want to paint with.