[Stu from NYC]

Originally Posted by Topspinmo

IMO there is no good financial loan. You going to pay lot more than you borrow. It’s way system set up.

Home equity lines have worked well for us in the past. Cost to set it up were zero and only paid when used.

[valuemkt]

Originally Posted by manaboutown

So we taxpayers are left holding the bag again. I wonder if the condominium association fees, property taxes and utilities are being paid.

Yea, you know .. Do it to the Man .. Nobody gets hurt .. right ?? Maybe the commenters NJ tells you something

[Plinker]

I suspect that the appraiser is under pressure to “hit the number”. Over valuing a property was a common practice around 2006. If the property doesn’t appraise high enough then the lender doesn’t get paid, commission-based salesman doesn’t collect exorbitant fee and appraiser may be out of a job.
Obviously, none of this is a concern to them as the taxpayer is on the hook to make them whole to the tune of billions of dollars every year. This product needs to be thru private lenders and let them take the risk

[Bjeanj]

Originally Posted by EdFNJ

... but on an attorney's advice I just ignored it since I had nothing legally to do with it. Just walked away from it Went into foreclosure and has sat empty since then. The RM was great for him in the years he had it. When he took it out in 2006 the bank valued the $60K property at $170,000 !!!!!! The $600/month + SS helped him "live" by himself especially after my mother passed well before that. They netted well over $100,000 on it. The Feds got it and still own it.

If that were to happen here, I would imagine the maintenance wouldn’t get done, mold and mildew would set in, the yard would get weedy and not mown, the neighbors would rightly complain, the district would impose fines that wouldn’t get paid, and eventually (months?), the lender/Feds would try to sell it.

[Plinker]

Excellent points! I was approached by a RM salesman that tried to convince me that this product would provide me a line of credit should I encounter a financial “crisis”. I suggested I would opt for a HELOC or downsize in a worst case scenario. I did a a little research and found the following article published by Forbes. Truly frightening!

“THE HIDDEN TRUTHS ABOUT REVERSE MORTGAGES:

The ads make them look so great. Vacations, living a great lifestyle, happy couples, smiling at their good fortune. Sincere movie stars of a certain age make the commercials believable. You can get cash now. It's so easy. Just get your reverse mortgage and your problems will be solved. Pay off debt. Have fun. What's wrong with this picture?
A reverse mortgage is more debt and one of the most expensive forms of credit you can get.
It Can Affect Any Dependent in the Home
If the elder who needs care in a facility has non-borrowing family members in that home, the loan is still due. Anyone left in the home must move out, go to a care facility or be taken in by someone else.
The Amount the Lender Will Loan is Limited
If the elder borrows, say, $200,000, and ends up needing care 24/7, that reverse mortgage cash she got will be exhausted in about two years or less. Then what? Default, foreclosure and Medicaid paid nursing home. All seniors need truthful counseling to warn of the negative consequences and potential harm of reverse mortgage products.
So what's the bottom line? Consider a reverse mortgage an option of last resort. If you or your aging parent gets charmed by the TV ads, get advice from a competent financial planner and elder law attorney before doing anything.”
BUYER BEWARE!!!

[John_W]

Originally Posted by Plinker

It Can Affect Any Dependent in the Home.



If the elder who needs care in a facility has non-borrowing family members in that home, the loan is still due. Anyone left in the home must move out, go to a care facility or be taken in by someone else.


The Amount the Lender Will Loan is Limited
If the elder borrows, say, $200,000, and ends up needing care 24/7, that reverse mortgage cash she got will be exhausted in about two years or less.

You can think of any scenario and pull out the worse points and say, this terrible. What if there are no dependents living in the home? What if there no children or any other heirs to leave your home to? What if this will be your last home and you plan never to move again.

If you borrow $200K, then your home was appraised for about $450K, someone didn't plan to well if they need $200K on their first draw, maybe they bought too much home. Second, a home worth $450K in TV could be sold and you can downsize easily to a cottage, a CYV or a patio villa, something they should have done to begin with and had more cash on hand. There's 3 BR 2 BA 2 Car cottage in St. James right now for $267K.

What I always find odd are people who don't know another persons situation giving them advice!

[Plinker]

Originally Posted by John_W

You can think of any scenario and pull out the worse points and say, this terrible. What if there are no dependents living in the home? What if there no children or any other heirs to leave your home to? What if this will be your last home and you plan never to move again.

If you borrow $200K, then your home was appraised for about $450K, someone didn't plan to well if they need $200K on their first draw, maybe they bought too much home. Second, a home worth $450K in TV could be sold and you can downsize easily to a cottage, a CYV or a patio villa, something they should have done to begin with and had more cash on hand. There's 3 BR 2 BA 2 Car cottage in St. James right now for $267K.

What I always find odd are people who don't know another persons situation giving them advice!

I agree that in the scenario you describe that a RM may very well be appropriate. Prior to making such a life changing decision, I would contact a qualified professional to help me review my options. If I had no legacy desires, my goal would be to bounce only one check - the mortician!

[akerwin1909]

Originally Posted by Dotneko

What bank will loan to a retiree with no income other than ss? The banks we spoke with didnt care how much cash on hand we had. With no income, no mortgage.
The closing costs for a reverse werent huge either.

Again, reverse mortgages can
Be a great financial tool.
The huge commissions are a myth! All loan officers make a pretty good commission. It is not an easy
Job being a loan officer, I’ve done it and there is a lot of training and knowledge necessary to be a loan officer. Reverse Loans are getting better and far more main stream.
Banks that do reverse will foreclose if the money owned is higher than the actual value. A good thing for the next person/investor to buy.
It’s important to do comparisons on costs but closings are expensive
No matter what kind of loan you use.
I’m planning to do a reverse refi when I turn 62 and I know more than most about loans and real estate!

[rlcooper70]

Reverse Mortgages. Don't take one. Just Spend less. Live on what you can - not what you want. Very simple concept.

[fastboat]

Originally Posted by graciegirl

I think much of the property tax increase is because our homes have escalated so much in value. And that is true almost everywhere in the U.S. Just to see if I may be right, remember how much you paid for your property and see what the three usual places to check consider the value. (Redfin, Realtor.com and Zillow) They are fairly close to the amount it will sell for in my opinion.

I am not a realtor, never have been and really am not crazy about them.

I don't know about that. The spread on my home is $118K between the 3 of them.

[Topspinmo]

Originally Posted by Stu from NYC

Home equity lines have worked well for us in the past. Cost to set it up were zero and only paid when used.

So what you saying the lender didn’t make no money off the loan

[Topspinmo]

Originally Posted by rlcooper70

Reverse Mortgages. Don't take one. Just Spend less. Live on what you can - not what you want. Very simple concept.

Most buy over their head why they get into money problems.

[oneclickplus]

Originally Posted by Plinker

It seems, in my opinion, there have been a lot of posts about reverse mortgages. Apparently, there are many inconvenient truths that you may be unaware of. The following I found to be particularly egregious.
Why should taxpayers be on the hook when a reverse mortgage turns toxic?

This from the Heritage Foundation

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

That's because they guy posting is a TOTV sponsor. So, he is PAYING to be here and his posts, while meant to look informative, are basically advertisements.

Try putting up your own ad here for any service watch it get removed. He basically has a license to advertise.

[Petersweeney]

I used to like Tom Selleck ... is he that broke that he has to hawk this crap?

[joseppe]

Originally Posted by Plinker

It seems, in my opinion, there have been a lot of posts about reverse mortgages. Apparently, there are many inconvenient truths that you may be unaware of. The following I found to be particularly egregious.
Why should taxpayers be on the hook when a reverse mortgage turns toxic?

This from the Heritage Foundation

“Because of the largesse of federally financed subsidies in the Federal Housing Administration’s reverse-mortgage program, the federal government has gradually crowded out private insurers from the market for these financial products since the program began in the late 1980s.
Indeed, amid the multi trillion-dollar maze of federal insurance and guarantee programs lies the Federal Housing Administration Home Equity Conversion Mortgage program—an insurance program providing loss coverage on reverse-mortgage originations backed by federal taxpayers.
The loan program simply has become a severe financial burden for federal taxpayers. The Federal Housing Administration reports that the Home Equity Conversion Mortgage program faces a financial shortfall totaling roughly $14 billion in fiscal year 2017.
To avoid any further compounding of the fiscal fiasco, policy leaders should wind down the federal Home Equity Conversion Mortgage program, and in the interim certainly refrain from any misguided reforms that would increase moral hazard, put more taxpayer money at risk, and ultimately continue to crowd out private mortgage insurers from the market for reverse mortgages.”

There's nothing wrong with Reverse Mortgages if you understand what they are and how they work. There are situations with any financing that can put you into an unfavorable condition. Most of the NaySayers don't understand what a RM is or how it works. I've had many mortgages and one reverse mortgage. Even though I should not have used the reverse mortgage when I did it did not turn out bad for me. In fact it worked out quite well and gave me some advantage over having a regular mortgage.

I find that people tend to label things they don't understand as 'Wrong' or 'Bad' and sadly many other people adopt that opinion rather than taking the time to find out for themselves.

I'm not an advocate of Reverse Mortgage, but I would not say there's anything wrong with them.