Reverse mortgage
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Daren Todd
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I have had my reservations about them. I've had one relative look into it and not qualify.
And another relative that probably went through with one. But I had a falling out with that relative so I couldn't tell you for sure.
My main concern would be with the estate if you have children and were planning on passing down to your kids.
At some point they would have to pay that money back if they were looking to keep the property.
Now if your not planning on passing it on to your kids........ then I would probably look into it.
And another relative that probably went through with one. But I had a falling out with that relative so I couldn't tell you for sure.
My main concern would be with the estate if you have children and were planning on passing down to your kids.
At some point they would have to pay that money back if they were looking to keep the property.
Now if your not planning on passing it on to your kids........ then I would probably look into it.
They are VERY expensive loans with fees and complicated pitfalls.
No tax deduction: Interest paid on a reverse mortgage can't be deducted on your annual tax return until the loan is paid off. Less equity: A reverse mortgage can siphon equity from your home, resulting in a lower asset value for you and your heirs.
Normally, when you take out a mortgage, if you pay 20% down you don’t have to carry mortgage insurance. But since this is a loan on which no down payment is made...YOU have to still pay for the mortgage insurance.
Here’s a brief rundown on the disadvantages: https://www.businessinsider.com/reverse-mortgage-what-it-is-and-why-its-a-bad-idea-2018-4
No tax deduction: Interest paid on a reverse mortgage can't be deducted on your annual tax return until the loan is paid off. Less equity: A reverse mortgage can siphon equity from your home, resulting in a lower asset value for you and your heirs.
Normally, when you take out a mortgage, if you pay 20% down you don’t have to carry mortgage insurance. But since this is a loan on which no down payment is made...YOU have to still pay for the mortgage insurance.
Here’s a brief rundown on the disadvantages: https://www.businessinsider.com/reverse-mortgage-what-it-is-and-why-its-a-bad-idea-2018-4
Poohbear
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I can't get away from my raising. I was taught very very young to get your house paid for and then never borrow against it. I would have to be very desperate for a large sum of cash.
But ole Tom Selleck swears they are great. Oh that's right, he gets paid to read a script no matter what it says
NCL4701
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You’re pretty much, as a practical matter, selling your house before you’re done with it so if you want to pass it down to heirs it doesn’t really work. There are a lot of smaller but still concerning issues as pointed out by GeoHorn. Shockingly it isn’t as simple as it looks in those commercials.
They might be a good product for somebody who really needs cash and isn’t concerned about asset transfer to heirs. Unless you’re in a pretty unique situation it looks to me like a next to last resort option, possibly slightly ahead of bankruptcy. I hope I’m never desperate enough to ever have to consider it seriously.
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(off topic I know) I saw my older sister steal my parents property when my mother passed away she pulled out a 'secret Last Will' the day of moms funeral my siblings and I got a call from a lawyer saying the next day was the reading of my mothers Will. I replied she didn't have a Will. The woman laughed "oh Yes she did"...I replied mail me a copy and tell my sister I'll see her in court" and hung up. It runied my mothers funeral and my oldest sister got my mothers estate in the end. The last time she stopped here. I pointed out the driveway and told her to Never Stop Here Again, 11 yrs ago.
That made me get all my paperwork in order. Who gets this and that, where I'll be planted and what my kids and family will gets.
Alot of hard work to earn what I have. Nothing given. Being poor growing up I never relized we were poor until I got older.
That made me get all my paperwork in order. Who gets this and that, where I'll be planted and what my kids and family will gets.
Alot of hard work to earn what I have. Nothing given. Being poor growing up I never relized we were poor until I got older.
GreensvilleJay
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reverse mortgages are in tha same boat as 'payday loans'.....
some scammer figured a LEGAL way to steal your money
if you need money, get a real loan better yet THINK and WRITE DOWN why you 'need' the money.
The thing I see is people getting the reverse mortgage, fixing up their house, die, then the loan company gets ALL their money AND interest, kids get MAYBE pennies on a dollar....
some scammer figured a LEGAL way to steal your money
if you need money, get a real loan better yet THINK and WRITE DOWN why you 'need' the money.
The thing I see is people getting the reverse mortgage, fixing up their house, die, then the loan company gets ALL their money AND interest, kids get MAYBE pennies on a dollar....
Thanks for all the comments. I'm not considering one, just looking for knowledge. I was sure they were bad.
My MIL has one but will not talk about it... We are not expecting (nor need) anything from her estate. She has a reverse mortgage and needed money for a new roof and several more things.... we know there is not enough money to fix the house enough to actually put on the market. Them taking the house is going to make it easier for us.
As long as we don't end up $12k in the hole (like my side of the family).
As long as we don't end up $12k in the hole (like my side of the family).
About 25 years ago I thought I had a great business idea and I shared it with my extended family at Thanksgiving dinner. Offer to buy out old peoples homes in town for a nominal amount with an agreement that they get to live their rent/property tax free for the rest of their lives.
When they moved out or died the property was mine to do with as I sought fit. In the older parts of town there were a lot of old tiny houses on huge lots which today are considered to be "estate lots" that capture a premium. You could either build monster McMansions or multiplexes easily for a good return. Everyone told me I was being ghoulish and no-one in their right minds would sign up for such a deal.
Now it's a mainstream idea and called a reverse mortgage.
When they moved out or died the property was mine to do with as I sought fit. In the older parts of town there were a lot of old tiny houses on huge lots which today are considered to be "estate lots" that capture a premium. You could either build monster McMansions or multiplexes easily for a good return. Everyone told me I was being ghoulish and no-one in their right minds would sign up for such a deal.
Now it's a mainstream idea and called a reverse mortgage.
I own my own business and when it came time to pay off the house, my accountant actually had me keep a loan on it. Much smaller than before but still a loan.
He had a bunch of reasons but the main one was protection from law suits. If the bank owns part of your house it is harder for someone to sue/take it out from under you.
He had a bunch of reasons but the main one was protection from law suits. If the bank owns part of your house it is harder for someone to sue/take it out from under you.
RCW
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Hmm...that's an interesting angle I'd never heard before.
It does seem logical, since the lien brings the bank into the action.
Seems to me a better option would be a cash-out refinance. What am I missing?
Of course it is. But Tom Selleck and his buddies prey upon people who may not by able to refinance a mortgage based on age and/or income.
I don't know much about them, but the concept just turns me off.
Mortgage: you buy your house from the bank over time.
Reverse mortgage: the bank buys your house from you over time.
Mortgage: you buy your house from the bank over time.
Reverse mortgage: the bank buys your house from you over time.
Poohbear
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You probably get a substantial under value price when going reverse mortgage
If your business is in a LLC then any lawsuit against your business is the assets of the business. If landscaping company then like truck, trailer, skidsteer, rakes shovels ect. Its what the business owns is at risk. If property is in business name then property. But if the garage or shop space is rented by or too the LLC no property is involved. The lawyer who sit up mine owned the building where his pratice was and rented it to his law firm.
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