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re: IS A REVERSE MORTGAGE A GOOD IDEA? Need Help deciding
Posted on 9/26/23 at 12:33 pm to TorchtheFlyingTiger
Posted on 9/26/23 at 12:33 pm to TorchtheFlyingTiger
quote:
I've always heard they are a bad idea and should only used when really needed.
You're going to get hit with origination fees and closing costs up front then ongoing interest expenses.
Current fixed rates for reverse mortgages appear to be just over 7%. So you'd be borrowing at 7% plus fees (likely 8+% APR) to pay off a mortgage you took out years ago at I'd guess a much lower rate.
Every state is different.
But your post sounds nothing like the reverse mortgages that I've seen in Georgia.
No fees. No points. No mortgage payment.
You are basically trading the ability to sell, refinance, or pass the home to an heir in exchange for a lump sum of money. You retain the opportunity to live there or rent out the property (usage).
1
Posted on 9/26/23 at 1:24 pm to meansonny
quote:GA Attorney General Consumer Protection Div
Costs, Fees and Interest - A reverse mortgage comes with closing costs, just like a regular mortgage, as well as servicing fees over the life of the mortgage. In addition, interest will be added onto the balance of the loan each month, so the amount you owe keeps increasing over time. However, with most reverse mortgages, you cannot owe more than the value of the home when the loan becomes due.
You dont make mortgage payments but the balance accumulates and accrues interest. It is a way to stay in home if in financial distress but very costly.
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