I like bacon too!!
Oops, wrong thread...
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Oops, wrong thread...
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I really don't see how a person in financial trouble can benefit from going further in debt, paying fees for the debt, and risking their house in the process.
Sounds like a bad idea to me. My suggestion would be to make some changes to your lifestyle.
Sounds like a bad idea to me. My suggestion would be to make some changes to your lifestyle.
Seriously?? Because I remember you posting a while back that you were selling reverse mortgages and not very happy about it. Felt like you were leading people down the wrong path or something to that affect.
Did you change your mind or change jobs?? I am confused now.
And you know ... I gotta say ... this little 'tit for tat' back and forth with poopgiggle is making me pretty danged sure that RMs are a bad idea ...
I am looking for some serious discourse from you. And I can't see how responding to Dave Ramsey's concerns (many of which are similar to what the rest of us are concerned about) if you really don't think RMs are a bad idea.
Considering your lack of substantive response so far I am thinking RMs are not the "financial tool" banks and mortgage companies would like you to believe they are.
This is a straw man argument.
Finally, Some questions!
All RM's have fees and yes they can be pricey. But that's up to the homeowner to determine if it is of worth to them compared with the alternatives etc... The biggest difference is an RM does not require monthly payments. Can a homeowner make payements? Yes. So, naturally, if one does not make payments the amount grows over time. The mortgage companies see the profit in the repayment which is typically from the sale of the home.
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.
I don't understand, what is the scam? Why is using equity - let me give an example... A couple had an RV in the driveway they could not afford to put gas in. They also had a house payment. The RM they got eliminated their house payment of roughly $800 a month so. That free'd up funds for their RV. They now travel the country in their RV. On top of that, they were struggling to make the house payment but did not want to move. Foreclosure was a possibility for them. Now the home cannot be foreclosed on because if no payments are required, then they cannot be late.
The things they need to do with the home are the same things they did with a regular mortgage. Pay taxes, have it insured and maintain the home.
I'm just not understanding how this was a scam for them... Or they lost equity "oh noes!" For these folks equity left in the house after they were dead was not important to them. They had things they wanted to do and without the RM option, they would not have been able to accomplish it.
No, it's a great illustration of David Ramsey's "summary."
Where's the David Ramsey alternatives? I seemed to have missed those. What's his solution, to say the scenario I posted above about the couple wanting to continue to live in their home? What's his solution?
Hey, if Robert Wagner says it's good, it MUST be. Afterall he IS Number Two 
Live within your means. Its a pretty simple solution, really.
I think the reason this appeals to people is that they really don't have a use for a house when they are dead, so they take this as an option.
HOWEVER, the reason it feels quite dirty is this: You had to pay the bank interest when you bought the house, and if you go this route, they get interest AGAIN, thanks to your house. Not only that, but since it's compounded interest, the debt grows exponentially, and it's pretty easy to lose all equity in the house by the time you sell or whatever.
That's the price you pay, though, for accepting the reverse mortgage.
HOWEVER, the reason it feels quite dirty is this: You had to pay the bank interest when you bought the house, and if you go this route, they get interest AGAIN, thanks to your house. Not only that, but since it's compounded interest, the debt grows exponentially, and it's pretty easy to lose all equity in the house by the time you sell or whatever.
That's the price you pay, though, for accepting the reverse mortgage.
