Reverse Mortgages

[poopgiggle]

Too high based on what?

Too high based on alternatives like selling the house. Things like compounding interest make that money disappear faster than it would otherwise.

 

[poopgiggle]

They are not living outside of their means! The equity in their home is paying for it!!! That's the money THEY put there. How is using your own money for something living outside of your means???

C'mon people, this is very simple to understand.

So how is this any different from people who refinance their homes regularly to live in an unsustainable fashion?

 

[Mos Eisley]

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.

Hooray BB! Funny, I never saw any response to this one.

.

 

[poopgiggle]

And yes, seniors just LOVE moving out of their old homes and into new homes.

My grandparents did this, because they're adults who realized that they needed to make real sacrifices if they wanted to be able to keep RVing around the country.

 

[MaddSkillz]

Too high based on alternatives like selling the house. Things like compounding interest make that money disappear faster than it would otherwise.

So you're assuming all seniors want to sell their home because it's cheaper. After all, that's what life is all about. We all want to do the cheapest things possible, because that's what makes us all equally happy.

In case you didn't know, some people will pay for things because they want them, not because they're cheaper.

This is the dynamic that Dave Ramsey is missing. It may cost more, but it may also in fact give everything to the client that no other product could. That's for them to decide. It's their money. If it allows them to stay in their home, if it allows them to do other things they could not do. Let them do it.

Not everything in life is about saving money. If I had the money, I'd buy a Lamborghini in a heart beat. Some would call that stupid, but I sure as hell would do it!

 

[RidgeHunter]

5 pages and you haven't set anyone straight yet, Madd. Keep trying.

How is eliminating a house payment for a senior who can no longer afford it a bad thing?

If you have a house payment (outside a place like NYC where rent is the norm) as a senior, you dun goofed.
As for the RV couple, how about they sell the damn RV? Or live in that sumbitch down by the river.

Reverse mortgagees are total scam. Sure, you can talk up their "good points"...but follow me here.

How is taking a $2,000 loan from a violent loan shark a bad idea if you REALLY need that cash today no questions asked? After all, no other option has terms and conditions like a loan shark.


That's what it sounds like to me.

 

[kroberts2131]

I think i'll stay away from RM's......If I want to travel the country in my RV, I'll sell my house. If I want to keep my house, I'll sell my RV. Pretty simple concept

 

[kroberts2131]

5 pages and you haven't set anyone straight yet, Madd. Keep trying.



If you have a house payment (outside a place like NYC where rent is the norm) as a senior, you dun goofed.
As for the RV couple, how about they sell the damn RV? Or live in that sumbitch down by the river.

Reverse mortgagees are total scam. Sure, you can talk up their "good points"...but follow me here.

How is taking a $2,000 loan from a violent loan shark a bad idea if you REALLY need that cash today no questions asked? After all, no other option has terms and conditions like a loan shark.


That's what it sounds like to me.

Yep, thats why they have these things called 401k's and IRA's......you have roughly 40 years from the time you join (age 25) the workforce to make sure your ready when you retire. If you didn't save enough, keep working. If you still have debt, keep working. If you saved enough and have no debt, retire!!

 

[MaddSkillz]

My grandparents did this, because they're adults who realized that they needed to make real sacrifices if they wanted to be able to keep RVing around the country.

And others are willing to sacrifice the equity in their home, to stay in their home.

Different strokes for different folks... And no option is better than the other. That's completely up to what makes that person tick.

 

[Glocktogo]

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.

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.

Why so pricey?

Also, payments are always required on a mortgage, they're just being made by the RM, correct? So, are they paying the mortgage AND sending the homeowner a check? Or do they only do RM's on homes without a current mortgage? If so, does the homeowner get to charge the RM interest? No?

Seems like a scam to me.

Instead of just talking pie in the sky benefits, why not discuss the ups AND downs of a RM? Concrete information usually works better to convince people than vague notions of benefit.