Quote:
Originally Posted by John_W
I took the Reverse Mortgage class from Citizens Bank a couple of years ago, they usually give it every other month at Palmer Country Club. Most people are aware that if you're at least 62 and own your home, you can get cash now, a reverse mortgage. It's about 45% of the appraised value. It was higher but in 2017 the government passed new laws requiring the banks to keep more reserves.
What I found interesting is you can use a reverse mortgage to purchase a new home. Let's say it's going to be your last home, you don't have any heirs you want to leave the home to, and it's your primary resident. If the home your buying is worth $300,000 with a reverse mortgage you put $140,000 down and don't pay another penny the rest of your life. You have that other $160,000 that you were going to put down now in your pocket to spend. You live in home, you essentially own the home, you pay the taxes and up keep, but you got it for less than half price. Then when you you die, just like a regular reverse mortgage the bank takes ownership and sells the home. If it sells for more than what you took out, your heirs get the difference.
|
Life is funny. Sometimes your last house will turn out not be your last house and you want to move and do not have much equity at that point.
Reverse mortgage can get people to live above their means and than if they need additional funds for something do not have a source of it.
People should think long and hard before adding to debt in their olden years.