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Started By
Message
IS A REVERSE MORTGAGE A GOOD IDEA? Need Help deciding
Posted on 9/26/23 at 8:14 am
Posted on 9/26/23 at 8:14 am
Hi fam,
I’m 63 wife is 66, wife retired from FETI at LSU. Me social security I was self employed until a year ago.
We live in Tara subdivision only owe 110k on a house with a 300k valuation.
Anyone with financial knowledge think a reverse mortgage is a good idea to eliminate a house note of 1035.00 a month?
It’s our forever home and plan on staying in it till the end.
Thanks fam,
I’m 63 wife is 66, wife retired from FETI at LSU. Me social security I was self employed until a year ago.
We live in Tara subdivision only owe 110k on a house with a 300k valuation.
Anyone with financial knowledge think a reverse mortgage is a good idea to eliminate a house note of 1035.00 a month?
It’s our forever home and plan on staying in it till the end.
Thanks fam,
10
Posted on 9/26/23 at 8:28 am to Oneulus
quote:Unless you tap out all the equity and are forced to sell in your late 70s or early eighties
It’s our forever home and plan on staying in it till the end.
Posted on 9/26/23 at 9:00 am to Oneulus
How much do you have saved for retirement?
Posted on 9/26/23 at 9:13 am to Oneulus
This is a much more detailed discussion than the information provided. Do you have kids? How much saved? Monthly expenses? Total monthly income? Health?
Posted on 9/26/23 at 9:51 am to Oneulus
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.
Are you having a hard time making ends.meet or just looking to buy extra room in your budget?
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.
Are you having a hard time making ends.meet or just looking to buy extra room in your budget?
Posted on 9/26/23 at 11:06 am to TorchtheFlyingTiger
Hard to have an informed opinion with knowing the value of other assets, passive retirement income and debt. That said, I consider the equity in my home to be my long-term care insurance. According to AARP, 70% of people reaching age 65 will require long-term care. Average cost of that care is about $70,000 per year.
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).
Posted on 9/26/23 at 12:40 pm to Oneulus
quote:
I’m 63 wife is 66
quote:
Hi fam,
Suspect.
What do you have coming in retirement wise each month?
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.
Posted on 9/26/23 at 1:29 pm to Billy Blanks
(no message)
This post was edited on 9/26/23 at 1:31 pm
Posted on 9/26/23 at 4:20 pm to Oneulus
Should not retire when still paying a note on home. Go back to work until paid off
Posted on 9/26/23 at 4:40 pm to WDE24
quote:
Unless you tap out all the equity and are forced to sell in your late 70s or early eighties
Thats not how it works
Yes get a Reverse and enjoy. Cant wait till I turn 62 to get one
But rates are high so benefit isnt as much
Posted on 9/26/23 at 5:15 pm to SDVTiger
My bad. I shouldn’t have commented.
Posted on 9/26/23 at 5:25 pm to WDE24
a friend up in Tenn did a reverse 5 years ago on a 900k paid for house. the equity left is only 400k. its a loan and a payment with interest accrues till you have no more equity left. problem is they have a hard time with upkeep of the house, insurance, maintenance, utilities and property taxes on their fixed income. so now they are trying to sell the house to at least get their remaining 400k equity thats left.
Posted on 9/26/23 at 6:56 pm to TIGA 80
quote:
a friend up in Tenn did a reverse 5 years ago on a 900k paid for house
Yeah he also got like 300-400k in his pocket
Posted on 9/26/23 at 9:08 pm to Oneulus
Never! If the lender default and they do a lot, you'll lose it all.
Posted on 9/27/23 at 12:51 am to Oneulus
Refi the 110k for 15-20 years. Refi again when rates drop.
Posted on 9/27/23 at 7:33 am to LatinTiger30
quote:
Never! If the lender default and they do a lot, you'll lose it all.
What? The loan is insured and guaranteed by HUD
So this cannot happen
Posted on 9/27/23 at 8:00 am to SDVTiger
I think if you have no family and you want to use up the equity to help retire, is should work. Some people say it's good.
I had my parents refi at 3% with a big cash out to help with living cost for the next 8-10 years. They are older than you though.
At that time we figure out another plan.
I had my parents refi at 3% with a big cash out to help with living cost for the next 8-10 years. They are older than you though.
At that time we figure out another plan.
Posted on 9/27/23 at 8:03 am to Oneulus
This seems like something made for a person who did a shitty job of saving and investing while in their working years.
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