OT Any experience with reverse mortgage?

I just got a brochure from a lender regarding the Home Equity Conversion Mortgage (HECM), says they're issued through HUD approved lenders. I'm sure it"s not something for everyone, some have heirs to leave the property to but others have not. Also the property needs to be kept to HUDs standards or rules and that in itself may be no big deal but the inspections may be a major pain in the ass. I don't know the first thing about how these actually work so I'd really like to get some input from others who have researched these or have actual experience with them.

There a mortgage. You borrow the money it's paid out every month and at some point in the future you have to start paying back. Interest rates are much higher than conventional mortgages.

I've looked into this for my mother and the phrase that best describes them "Is nothing but another god damn scam praying on the elderly"

i like Monthly Annuities
.
for every $100,000 you can get $400/month for life. usually can get more the older you are and i have one where if i die my wife gets 75% for the rest of her life. they are often sold by life insurance companies. you get more per month if you start one older as they calculate the age you probably will live too. they keep money when you and your wife die so bad thing is nothing for children
.
i get $1300/month annuity from a former employer rest of my life. takes worry about job no longer a concern.
.
if you get annuity you can rent a place. no land taxes, insurance, maintenance upkeep worries that drain money plus when you own house the house its not giving money per month but costing money per month. basically if you got $200,000 in a house thats $800/month loss of income from not having in an annuity AND its costing you money every month maybe $400 to %800. so rather than $800 coming in you got $800 going out monthy thats a $1600 difference
.
and i am not talking about paying over $300,000 for a $200,000 house once mortgage interest counted. that $100,000 loss is a $400 monthly loss the rest of your life. in total $200,000 house can be a $2400/month loss the rest of your life
.
they never mention that when you want to buy a house. AND if you rent for less than $2400/month and invest in 401K that will grow over time. to me the greatest con is convincing people they are saving money buying a house

I have no experience with them and I hope and pray that I never do.

Just judging by the number of TV commercials that are touting them, I would say it is a total fraud. Another way to take money away from "we the people".

If you or someone you know needs money, go to a reputable bank and talk to them. Talk to several. You may wind up with the reverse mortgage, but save it for a last, last resort. And get a lawyer to read any papers before signing them.

A reverse mortgage is basically a greedy scumbag banker placing a bet on how long your going to live.

SIP6A said:

I've looked into this for my mother and the phrase that best describes them "Is nothing but another god damn scam praying on the elderly"

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Same here, less than two years back.

WORSE than most because they are EVER sooo 'credible' in their presentations. Former Senator Fred Thomson was it?

And you don't HAVE to be elderly to be taken advantage of.

Vanilla gullible works, too.

Bill

I like the commercials which have Morgan Freeman and Henry Winkler as presenters. Supposed to give the old person that warm and comfortable feeling about a reverse mortgage. You won't see either of them signing up for a reverse mortgage.

It is a good way to give the title of the property to a lending agency with them only having to give you a little bit of money each month. Yes it is a bad deal.

You are paying taxes, upkeep, utilities, and accruing interest. You get to live in the house for a while until either the mortgage balance and accrued interest equal the loan value or you pay the total amount due. These loans are structured to separate you from your property with minimal effort on the lenders part.

The loan is marketed as a way to keep your house and have money too. Exactly like keeping your cake and eating it too. Can't be done.

This is right next to pay day loans and title loans for ethics and usury laws abuse.

The tragic thing is that it gives the existing home owner the feeling that they still own the house and since there are no monthly payments due, everything is fine but in reality, the accruing interest combined with the pittance for a monthly cash payment are rapidly consuming the equity in the property.

I am hard pressed to think of any situation in which this is a good way for someone to get some equity out of their house. As others have stated, a traditional mortgage would be much better in that you get a lump sum up front and know what all of the costs are.

Many times it is also possible to sell a house with lease back privileges if that is what is desired or needed.

A good thing to keep in mind is that usually unsolicited offers for loans are not designed to be in your best interest, not that any loan is.

Ziggy2 said:

A good thing to keep in mind is that usually unsolicited offers for loans are not designed to be in your best interest.

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Too many people never understand this, it's why the asses are in business anyways.

SIP6A said:

There a mortgage. You borrow the money it's paid out every month and at some point in the future you have to start paying back. Interest rates are much higher than conventional mortgages.

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Their words; "Any current mortgage will be paid off. You will no longer have a monthly mortgage payment." Then it goes on "You and/or spouse can stay in your home the rest of your live(s) as long as you pay your property taxes, insurance, upkeep and comply with the terms of the loan. Any remaining equity in your home can be passed on to your heirs."
So this raises a question; After they give the last payment is the payback due then or is it after you cease to exist or no longer live there and then left to any heirs to satisfy the buy back? If it's the first case then what they said about NO mortgage payment is a lie and only be another name for a home equity loan? If it's the second scenario there is no payment, then it would be up to an heir if the property was desirable enough to go after. If that is the case then a mortgage at current interest rates could satisfy the debt and would have no bearing on any interest rate of the reverse mortgage? What say Ye?

I have one.
I took max cash at one time.
You or your spouse will live in the house until the survivor dies. If amount owed exceeds market value it makes no differencve.
Then it could be bought by someone paying off the mortgage. (assuming it is less than market value)

Before you enter into one there is a mandatory briefing via phone by a Govt. person.The Govt. keeps a close watch on the lenders
I talked to a very nice English speaking articulate lady.
I learned quite a bit for example there is a crapload of "fees" BUT they are negotiable. So I save d$$$
As mentioned it is not for everyone, but I took the max cash, am spending it!

I used a broker, I talked to a couple of banks, but the people were dumbskis,

The mortgage can come due and payable if the person does not pay the property taxes, have property ins. or maintain the property.

https://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten.

DMF_TomB said:

i like Monthly Annuities
.
for every $100,000 you can get $400/month for life. usually can get more the older you are and i have one where if i die my wife gets 75% for the rest of her life. they are often sold by life insurance companies. you get more per month if you start one older as they calculate the age you probably will live too. they keep money when you and your wife die so bad thing is nothing for children
.
i get $1300/month annuity from a former employer rest of my life. takes worry about job no longer a concern.
.
if you get annuity you can rent a place. no land taxes, insurance, maintenance upkeep worries that drain money plus when you own house the house its not giving money per month but costing money per month. basically if you got $200,000 in a house thats $800/month loss of income from not having in an annuity AND its costing you money every month maybe $400 to %800. so rather than $800 coming in you got $800 going out monthy thats a $1600 difference
.
and i am not talking about paying over $300,000 for a $200,000 house once mortgage interest counted. that $100,000 loss is a $400 monthly loss the rest of your life. in total $200,000 house can be a $2400/month loss the rest of your life
.
they never mention that when you want to buy a house. AND if you rent for less than $2400/month and invest in 401K that will grow over time. to me the greatest con is convincing people they are saving money buying a house

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I know a few landlords. They all are using the renters' payments to finance the mortgage and pay the insurance and taxes, with some left over for profit. That is why it can be smart to buy house. Only what I call someone with 'employee thinking' imagines that someone other than themselves are paying the overhead expenses on their behalf, for free.

Monarchist said:

Former Senator Fred Thomson was it?
Bill

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Yeah, Fred went from being a neo-free market presidential contender to a "government insured!" reverse mortgage peddler in a fucking nano second.

The OP asked for any persons with actual reverse mortgage experience. Only one poster with actual experience has responded and they don't sound unhappy with the product.

If you want a lump sum or monthly withdrawals from your reverse mortgage, not to make any payments on the reverse mortgage, don't have any heirs or don't care if they get the house and figure you will die when the money has all been used or withdrawn then what's the problem with a reverse mortgage? At the time you die it all someone else's problem.

Vlad

I am thinking of the one resonating sentence on almost every TV ad: "And best of all you still own the house". I bee thinking that should be changed to "And worst of all possible worlds is that you still own the house". Guess who gets to redo the new roof, puts in a new well or whole house plumbing after repairing the walls & flooring, new paint jobs, pays taxes, homeowners association fees, upkeeps the yard/trees/driveway, the list is endless, kind of like when you actually own the house. Good Luck.

Ziggy2 said:

like keeping your cake and eating it too. Can't be done.

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Of course it can, just took these clever "reverse lenders" to figure out how to do it. Well, you don't get to keep your cake and eat it, but they sure get to keep your cake AND eat it. They pay you next to nothing for your property, charge you interest and fees on money that they haven't even loaned you yet, and while they wait to actually take your property, YOU get to maintain it! Best of all, if you drop dead sooner rather than later, it's a real homerun for them!
An elderly woman I know signed up with one a few of years ago. Had she sold her house at the time, she would have been set for life. Over the last few years, she's received very little in payments, but now, that she wants to get away from the up keep of a house and move into an assisted living kind of thing, she has almost no equity left in her house. She also can not rent the house and use the rental income to pay for her apartment. Not good.

The real answer is it depends on how long you and you spouse plan to live after you sign the reverse mortage. I remember the oldest women in the world used to be French. She did something similar which was common in France when she was in her sixties.
She sold the house for monthly payments and got to live in it until she dies. If she dies in one month she gets one payment and the new owners own it free and clear. If they stop paying her she owns it free and clear and can sell it again. The family that bought it kept up the monthly payments until she got too sick to live by herself in the old house then they owned it.
I believe she moved out at age 112 and lived to 118.

As I understand the modern reverse mortgage there is no end date to the payments. They must keep paying the home owner until they die or get too sick and have to move out. If they stop payments they forfeit any claim to the property. If the homeowner dies young the bank has to refund any unpaid principle to the estate.
Of course this gives the loan company an incentive to make sure you die sooner rather then later.
Bil lD.

I took the lump sum 11 years ago . I still have to pay taxes and maintain the property same as if I was still paying a mortgage or owned it free and clear. Part of the fees is insurance for the lender that if you live forever and the mortgage amount due is greater the than the property value at your death it covers the diff to him. Have no heirs that need the house so I might as well benefit !!!
John