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Thinking of a Reverse Mortgage
Posted on 10/10/23 at 3:17 pm
Posted on 10/10/23 at 3:17 pm
Does anyone here have any experience with a reverse mortgage?
Thinking of getting one to use the money we are putting out on our mortgage,
$1035.00 into our monthly budget going forward with our retirement.
I’m 63, wife is 66, she’s retired from LSU.
Just wondering if anyone has better knowledge than searching around on the internet for information.
Thanks in advance
Thinking of getting one to use the money we are putting out on our mortgage,
$1035.00 into our monthly budget going forward with our retirement.
I’m 63, wife is 66, she’s retired from LSU.
Just wondering if anyone has better knowledge than searching around on the internet for information.
Thanks in advance
9
Posted on 10/10/23 at 5:19 pm to Oneulus
What are your current retirement accounts, life expectancy, equity in the house, and retirement goals? Impossible to answer without knowing some information
Posted on 10/10/23 at 5:32 pm to Oneulus
Unless you really need the cash flow, I hate reverse mortgages. You are simply increasing your debt. What interest rate are they quoting?
Posted on 10/10/23 at 5:45 pm to Oneulus
This is the way!
Posted on 10/10/23 at 6:31 pm to Oneulus
We covered this 2 weeks ago your previous thread asking same ?
It's still typically a bad a idea unless you have few other options and dont mind depleting your estate. Not to mention interest rates are high now so you'd be borrowing high interest to pay an old mortgage (presumably lower rate). Did you ever mention your current mortgage rate?
It's still typically a bad a idea unless you have few other options and dont mind depleting your estate. Not to mention interest rates are high now so you'd be borrowing high interest to pay an old mortgage (presumably lower rate). Did you ever mention your current mortgage rate?
Posted on 10/10/23 at 6:45 pm to Oneulus
Lots of reasons not to. One is that you are relatively young and may decide or need to sell and move (bad neighbors, need better accessibility for aged, downsize for manageability, etc.).
You can sell a house with a reverse mortgage, but the debt is then due. You will have to pay the balance borrowed plus interest, so you likely will have no equity to put in your pocket and go toward a new home. That could trap you in the house forever even in crackheads move in all around and the neighborhood starts flooding every year.
You can sell a house with a reverse mortgage, but the debt is then due. You will have to pay the balance borrowed plus interest, so you likely will have no equity to put in your pocket and go toward a new home. That could trap you in the house forever even in crackheads move in all around and the neighborhood starts flooding every year.
Posted on 10/10/23 at 6:50 pm to TorchtheFlyingTiger
quote:
It's still typically a bad a idea
Why is it typically a bad idea?
Op get it an enjoy life!
Posted on 10/10/23 at 7:43 pm to TorchtheFlyingTiger
Hey sorry wife asking me to ask again
3.25%, remaining mortgage is 110k, house estimate 325k.
Thanks
Just thinking of trying to generate an extra 1k a month for enjoying our retirement a little more.
Reverse mortgages have many reviews but still seems mixed opinions.
3.25%, remaining mortgage is 110k, house estimate 325k.
Thanks
Just thinking of trying to generate an extra 1k a month for enjoying our retirement a little more.
Reverse mortgages have many reviews but still seems mixed opinions.
Posted on 10/10/23 at 8:03 pm to Oneulus
You're looking at borrowing at 8-10% APR to pay a 3.25% mortgage and interest free tax/insurance.
Unlike a regular loan you dont gradually pay it down. Instead you gradually borrow more each month and the debt and interest compound.
I would consider it as only a near last resort especially at current rates.
What is your monthly cash flow? Are you depleting savings/investments at an unsustainable rate?
Unlike a regular loan you dont gradually pay it down. Instead you gradually borrow more each month and the debt and interest compound.
I would consider it as only a near last resort especially at current rates.
What is your monthly cash flow? Are you depleting savings/investments at an unsustainable rate?
Posted on 10/11/23 at 6:04 am to Oneulus
You’d be committing one of the top financial faux pas’s possible.
1. Reverse Mortgage
2. Indexed Annuity
3. Timeshare
1. Reverse Mortgage
2. Indexed Annuity
3. Timeshare
Posted on 10/11/23 at 6:27 am to Oneulus
Personally I wouldn't consider a reverse mortgage until you're 80 at least or have absolutely no other options. End of life health for one of you will come up at some point and bite the majority of that money out of your pocket and the other will be left with close to nothing. . . or worse. You say it's to "enjoy retirement more" which doesn't scream to me like a necessity. Just my $.02. Find a way to enjoy yourself within your current budget.
Posted on 10/11/23 at 8:23 am to TorchtheFlyingTiger
quote:
Unlike a regular loan you dont gradually pay it down
You realize you can pay the payment or the loan down whenever you want
Does this board not realize the loan is a HELOC on steroids
And no one has an issue with that loan despite it being the worst
Posted on 10/11/23 at 9:41 am to Oneulus
quote:
$1035.00 into our monthly budget going forward with our retirement.
Is that $1035 your existing mortgage payment including escrow for insurance and taxes? Because you're still going to have to pay for insurance and taxes, so now you might only be talking about a net gain of $600-700 in your monthly budget.
quote:I'm no reverse mortgage expert, but yall seem too young for one. Assuming you're both in good health, then you're looking at another 20 years each of life expectancy and a RM over that length of time is going to sap you of all your equity in the house.
I’m 63, wife is 66, she’s retired from LSU
Are you retired too or just your wife? Tell her to get a part time job working 1-2 days a week doing something she enjoys if you really need that extra $1000 a month or start selling for one of those MLM brands that the soccer moms love.
Posted on 10/11/23 at 10:03 am to SDVTiger
quote:
Does this board not realize the loan is a HELOC on steroids
And no one has an issue with that loan despite it being the worst
So you're agreeing that reverse mortgages are a bad idea, like HELOCs?
Posted on 10/11/23 at 10:06 am to Tiger Prawn
quote:
start selling for one of those MLM brands that the soccer moms love.
Posted on 10/11/23 at 10:43 am to TorchtheFlyingTiger
quote:
So you're agreeing that reverse mortgages are a bad idea, like HELOCs
No because its the best loan ever
Everyone on here loves HELOCs yet they are the worst
Its clear you have no idea how the loan works and are just the typical doom and gloom guy
Posted on 10/11/23 at 11:31 am to SDVTiger
In all seriousness, please enlighten me.
I'm not a HELOC fan and havent seen everyone here encpuraging them especially at current rates.
As for the technicality you could pay balance as you go, that's not what OP intends to do. He wants to pull equity to spend as I think most RM customers do.
I'm not a HELOC fan and havent seen everyone here encpuraging them especially at current rates.
As for the technicality you could pay balance as you go, that's not what OP intends to do. He wants to pull equity to spend as I think most RM customers do.
Posted on 10/11/23 at 11:33 am to TorchtheFlyingTiger
quote:
As for the technicality you could pay balance as you go, that's not what OP intends to do. He wants to pull equity to spend as I think most RM customers do.
And whats the issue with that?
Please enlighten me on why this is a last resort loan
Youbare just the typical doom and gloom guy who doesnt know how the loan works
You can just admit that
Posted on 10/11/23 at 11:54 am to SDVTiger
Perhaps I don't get how the loan works. Thus, I asked you to enlighten. Wasn't trying to start pissing match.
Am I wrong that interest will accrue on any proceeds at 8-10% APR and the balance typically is left to compound? I've also read there are usually high fees and a mortgage insurance element but don't know enough to comment further. Can you dispel that concern? Legit would like to learn other perspective/use case for sake of elderly relatives that may consider RM and for OP.
Am I wrong that interest will accrue on any proceeds at 8-10% APR and the balance typically is left to compound? I've also read there are usually high fees and a mortgage insurance element but don't know enough to comment further. Can you dispel that concern? Legit would like to learn other perspective/use case for sake of elderly relatives that may consider RM and for OP.
This post was edited on 10/11/23 at 12:48 pm
Posted on 10/11/23 at 1:13 pm to SDVTiger
quote:
And whats the issue with that?
Please enlighten me on why this is a last resort loan
Youbare just the typical doom and gloom guy who doesnt know how the loan works
You can just admit that
Like the previous guy, I don't know all the terms of a RM. Once the bank pays the value of the house, does the bank get to foreclose on the house or assume ownership? Are you allowed to live in the house once the bank pays for it? What happens to the appreciation of the property in the time the bank is making payments. I'm guessing the bank owns the appreciated value as well?
My objection is that the OP didn't really give a compelling reason to reduce equity. Wanting to "live better in retirement" is a reason of sorts, but assuming an extra grand moves the needle for the OPs situation, it sounds like it's more of a paycheck to paycheck situation and leaves no room for error or medical situations which inevitably come up in retirement.
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