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The Water Cooler
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Reverse Mortgages
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<blockquote data-quote="Dr. Tad Hussein Winslow" data-source="post: 1329299" data-attributes="member: 7123"><p>Oh boy, it's not that black and white at all.</p><p></p><p>From a strictly long-term, bottom line dollar financial perspective, yes they are horrible ideas. Problem is, by definition, we are human and mortal and thus NOT long-term. We're gonna die.</p><p></p><p>So for some older-elderly folks, they can be and are, at times, in some circumstances, a *good* idea, even though you get raped on the fees generally. But there is competition, so the raping is not just wretched if you shop around.</p><p></p><p>But lookit, if you're 77 years old, have NO kids and no favorite charity to leave the house to (so you don't give a crap what happens to the house when you die), you're a widow whose income is $750 / month social security, and you can barely make ends meet, let alone enjoy any frills during your final days on earth, and you can do a RM deal that gives you an income of $1,500 / month, based on a 20 year reverse mortgage, then the only way it's a bad idea is if you live past 97 - now if your life expectancy is 84, based on your health, lifestyle, medical care availability, and all the other factors, then the chance of living another 13 years past that is virtually nil, so why on earth would you NOT double your income to enjoy yourself your last few years on the planet? You just don't need your house when you're dead, folks - if you have no kids and no charity you want/need to leave the house equity to. And you cannot qualify for an ordinary mortgage, by the way, because you don't have the income to start re-paying it.</p><p></p><p>So they're not *necessarily* bad ideas - yes they *usually* are, but not always - highly dependent upon facts and circumstances - most notably whether you have any kids that you actually like and want to leave some equity to.</p><p></p><p>Gawdsakes, Dave Ramsey is not a deity, folks - he's not all-knowing, and his black and white world is often misleading and wrong - he's generally right and wise, but like all black-and-white strict philosophies, sometimes gets it wrong by not accounting for gray areas / unusual situations.</p></blockquote><p></p>
[QUOTE="Dr. Tad Hussein Winslow, post: 1329299, member: 7123"] Oh boy, it's not that black and white at all. From a strictly long-term, bottom line dollar financial perspective, yes they are horrible ideas. Problem is, by definition, we are human and mortal and thus NOT long-term. We're gonna die. So for some older-elderly folks, they can be and are, at times, in some circumstances, a *good* idea, even though you get raped on the fees generally. But there is competition, so the raping is not just wretched if you shop around. But lookit, if you're 77 years old, have NO kids and no favorite charity to leave the house to (so you don't give a crap what happens to the house when you die), you're a widow whose income is $750 / month social security, and you can barely make ends meet, let alone enjoy any frills during your final days on earth, and you can do a RM deal that gives you an income of $1,500 / month, based on a 20 year reverse mortgage, then the only way it's a bad idea is if you live past 97 - now if your life expectancy is 84, based on your health, lifestyle, medical care availability, and all the other factors, then the chance of living another 13 years past that is virtually nil, so why on earth would you NOT double your income to enjoy yourself your last few years on the planet? You just don't need your house when you're dead, folks - if you have no kids and no charity you want/need to leave the house equity to. And you cannot qualify for an ordinary mortgage, by the way, because you don't have the income to start re-paying it. So they're not *necessarily* bad ideas - yes they *usually* are, but not always - highly dependent upon facts and circumstances - most notably whether you have any kids that you actually like and want to leave some equity to. Gawdsakes, Dave Ramsey is not a deity, folks - he's not all-knowing, and his black and white world is often misleading and wrong - he's generally right and wise, but like all black-and-white strict philosophies, sometimes gets it wrong by not accounting for gray areas / unusual situations. [/QUOTE]
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