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Parents considering Reverse Mortgage
Posted on 1/12/23 at 10:27 am
Posted on 1/12/23 at 10:27 am
Aside from Magnum PI saying a reverse mortgage is an option for aging couples to get a little cash, what should I tell my parents before they consider getting a reverse mortgage? Here's the situation. They own all their property outright. They have spent most their retirement savings keeping the business open. There is no one interested in inheriting their property. Both of them are approaching 80 years old. Not sure what other factors need to be addressed.
8
Posted on 1/12/23 at 10:43 am to coverboy
What's the purpose of the mortgage? Is it to support the business that they spent most of their retirement on?
I'd say that's a solid pass for me. They would be creating additional debt right to follow spent money.
Do they own the building where their business is located? They could sell the building provided it isn't based out of their home.
I'd say that's a solid pass for me. They would be creating additional debt right to follow spent money.
Do they own the building where their business is located? They could sell the building provided it isn't based out of their home.
This post was edited on 1/12/23 at 10:44 am
Posted on 1/12/23 at 10:46 am to hey benji
The business is totally separate and run by the family. The money from the reverse mortgage would be for them to enjoy their remaining years basically.
Posted on 1/12/23 at 10:51 am to coverboy
And the family no longer wants to run the business?
Posted on 1/12/23 at 10:54 am to lsu13lsu
The family is running it without my parents' input or financial assistance. They are no longer involved or being paid, etc.
Posted on 1/12/23 at 10:56 am to coverboy
So they invested their life's savings into it and now get nothing from it?
Posted on 1/12/23 at 10:59 am to lsu13lsu
Let's reel the question back in.
Is the business being run out of their primary residence or can that property be sold? If so, there is value there even if there is no interest in the business.
Depending on that value, they could reach the same goal without creating debt.
Is the business being run out of their primary residence or can that property be sold? If so, there is value there even if there is no interest in the business.
Depending on that value, they could reach the same goal without creating debt.
Posted on 1/12/23 at 11:01 am to lsu13lsu
There's nothing to give them. Struggling to keep the doors open as it is.
Posted on 1/12/23 at 11:01 am to coverboy
quote:
There is no one interested in inheriting their property.
Serious, Clark?
Posted on 1/12/23 at 11:01 am to hey benji
Business is not being run out of their residence.
Posted on 1/12/23 at 11:22 am to coverboy
quote:
There's nothing to give them. Struggling to keep the doors open as it is.
Would a family member be willing to buy their house from them at a discounted rate and then rent it to them?
I feel like that would be a better deal for everyone. Maybe the entire family could form an entity to do this.
Instead of them paying a monthly rent, discount the purchase price by monthly rents not paid based on their average life expectancy.
Simple example:
$300,000 Value Home
10 years of life left
Average rental rate of $1,000 per month for 10 years = $120,000
Purchase Price $300,000 less $120,000 = $180,000
Family purchases it for $180,000 and they get to live their till they die then family can sell the house.
Posted on 1/12/23 at 11:25 am to coverboy
I have thought about this recently. I'm not in retirement but if I want to access the equity of my home but I love my home too much to move away, it seems like an option to investigate.
I think this is also could be good in situations where you dont want to burden your kids with having to deal with the house when you are gone. If you know the house isn't going to stay in the family, it makes sense. Now if you know that one of the kids or other family want to have the house when you are gone, then obviously it may not be a great choice.
I think this is also could be good in situations where you dont want to burden your kids with having to deal with the house when you are gone. If you know the house isn't going to stay in the family, it makes sense. Now if you know that one of the kids or other family want to have the house when you are gone, then obviously it may not be a great choice.
Posted on 1/12/23 at 11:26 am to lsu13lsu
I am the entire family. Nobody else. I don't want their property. I have my own to worry about.
Posted on 1/12/23 at 11:27 am to coverboy
Fred Thompson also said to get the information kit.
Your parents need to obtain quotes from differing lenders. Help them with evaluating the information. Also compare to a cash-out refinance calculation.
If you're parents can use the equity of their property, it's an option they can consider. This statement does not indicate intent of support or nonsupport by bestbanker. Information is the key to knowledge.
Your parents need to obtain quotes from differing lenders. Help them with evaluating the information. Also compare to a cash-out refinance calculation.
If you're parents can use the equity of their property, it's an option they can consider. This statement does not indicate intent of support or nonsupport by bestbanker. Information is the key to knowledge.
Posted on 1/12/23 at 11:28 am to coverboy
quote:
I am the entire family. Nobody else. I don't want their property. I have my own to worry about.
Three options I can think of:
Sell and rent a new property
Sell to an investor who will then rent it back to them
Reverse Mortgage (I have no insight here, I was just brainstorming options for you)
Posted on 1/12/23 at 11:29 am to BestBanker
quote:
If you're parents can use the equity of their property, it's an option they can consider. This statement does not indicate intent of support or nonsupport by bestbanker. Information is the key to knowledge.
Will banks lend to retirees with basically just social security income?
Posted on 1/12/23 at 11:30 am to lsu13lsu
Appreciate all the input. I'll make sure they consider all of these options before committing to anything.
Posted on 1/12/23 at 11:35 am to coverboy
Sell the property, move in with you until they die since they gave you money to keep the business going.
Posted on 1/12/23 at 12:48 pm to coverboy
quote:
They have spent most their retirement savings keeping the business open.
That's not how businesses work. Is this a hobby? Or a profitable business prior to COVID that you all have hung onto out of sentiment?
Regardless, they (and maybe you) do not appear to be very good with money at this point.
quote:
Both of them are approaching 80 years old.
Sell the house and move them to an assisted living facility.
(ETA: I'm not derogating, either, my guy. I had a business go absolutely tits up. And I mean all the way. I learned from it. You may, too. I'm just offering the good medicine. Seriously, best of luck.)
This post was edited on 1/12/23 at 12:52 pm
Posted on 1/12/23 at 1:34 pm to coverboy
quote:
Aside from Magnum PI saying a reverse mortgage is an option for aging couples to get a little cash,
That's all I need to hear.
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