What's the deal with Reverse Mortgages?

are they a good thing - who benefits - are they a bad idea - is it an option for someone with no savings or cash on hand but plenty of equity in their house (and they need cash) - will they lose their home - how does it work - I'd like a response from someone who doesn't provide these services. Thanks!!What's the deal with Reverse Mortgages?
These are now the new best way to screw your kids of their inheritance. Basically a reverse mortgage allows you to sell your house to a lending institution that will then make payments to you until you die. They will also allow you to continue living in the house. So it is a way for someone to claim some of the equity from their house.


People using their houses like ATM Machines is one reason the country is in such a financial crisis today.What's the deal with Reverse Mortgages?
in theory they are good for old people who have no money except for their home equity. say your house is worth $100k and it's paid off and you're 75 years old. the bank will figure that you'll live another 7 years and then they'll figure that they can ';pay you'; monthly based on that equity. so when you die, they've ';paid you'; say $75k and assuming that the market stays flat, and you die at 82, your equity is now $25k. that's because the lender has fronted you $75k of that $100k that it was worth at the time. then your heirs or whomever would get the rest. the whole point is to tap into your equity.





now i do not sell these and this is just a 10,000 foot overview. there are a ton of companies that do them and if you are interested (and only if you ask), then i can provide you with an excellent company.
People that own their homes (they own it; not the bank) and there is no mortgage or a very small mortgage on the property have the opportunity to take cash out for a mortgage lien on the home.





Depending upon what you are doing with the cash they can be quite benefical with interest rates being so low at the bank. Say you have such a new mortgage and are paying anywhere between 5 - 10 % as a rate; and investing the money and getting a return of 30 - 30 % or higher . . . then, you prosper with the difference in the borrowing rate and the rate of return from the investment.





Its when people take funds from their homes to cover other consumer debt that wasn't necessary in the first place that things can go sideways. Usually the people who have paid for their houses and have no mortgage on their properties don't have these kinds of problems.





For the most part ~ people that own their homes know how to manage their money and wouldn't engage with a reverse mortgage without high probability of increasing their wealth position in the overall transaction.
You'll only lose your home if you decide not to live


in it ,circumstances prevent you from living in it,or


you die.My mother just went through the process


and I was VERY skeptical at first but they have


lived up to everything promised.My mother's home


has been improved,she has funds to draw from and


she now has no concerns about upkeep and taxes'


You can order a free DVD from US government with


all the details.It sounds sooooo strange at first but


it's true and it's done all the time.


**Your property goes to the mortgage company at


death but


your children can purchase it from the company.I


have no interest in my mother's property----I have my


own.My mom's home has been paid off for 15-20 yrs.


so why shouldn't she enjoy some of it's equity?


Hope I helped in some way. Good luck