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Reverse Mortgages

Reverse Mortgages

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by: radiogirl30 Active Indicator LED Icon 3 OP 
~ 8 years ago   Jul 16, '15 11:08am  
My mother mentioned possibly getting a reverse mortgage.  Does anyone know anything about these? 4951
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ForeCPA90 Active Indicator LED Icon 9
~ 8 years ago   Jul 16, '15 11:16am  
Here is a pretty good outline on reverse mortgages.  There are pros and cons, but the basic idea is that she takes out a loan against the equity in her home, then that amount is repaid when she sells the house or dies.  Also, she must remain living in the home or the loan comes due.http://www.bankrate.com/finance/retirement/basics-of-reverse-mortgages-1.aspx 4951
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Retired_Engineer Active Indicator LED Icon 13
~ 8 years ago   Jul 16, '15 11:17am  
They can provide some extra income to people that own their homes; however, there are many negative results of getting a reverse mortgage, all of them in favor of the bank. 4951
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donnatella Active Indicator LED Icon 13 Forum Moderator
~ 8 years ago   Jul 16, '15 11:42am  
They can provide some extra income to people that own their homes; however, there are many negative results of getting a reverse mortgage, all of them in favor of the bank.
 
@Retired_Engineer:   Anyone getting one is basically spending their kid's inheritance while they are still living.  To some that's an issue, to others, it isn't.  Just have to determine what's right for you and your family.
4951
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dotti573 Active Indicator LED Icon 15
~ 8 years ago   Jul 16, '15 12:20pm  

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>> They can provide some extra income to people that own their homes; however, there are many negative results of getting a reverse mortgage, all of them in favor of the bank.
 
@Retired_Engineer:   Anyone getting one is basically spending their kid's inheritance while they are still living.  To some that's an issue, to others, it isn't.  Just have to determine what's right for you and your family.
 
@donnatella: Years ago my in laws asked if they could leave everything to us since my DH is an only child by his mother and his step father has other children they don't have contact with.  Does anyone know, now that we are in the will am I responsible for any debt or anything they incur since they did a reverse mortgage on their house?  I won't have to pay for any of that will I?  I am not familiar with it.  I just know my father in law loves to spend money and have debt and I don't want to be responsible for all that.  I have enough of my own to worry about.
4951
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thegoodwife Active Indicator LED Icon 10
~ 8 years ago   Jul 16, '15 12:26pm  

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>> They can provide some extra income to people that own their homes; however, there are many negative results of getting a reverse mortgage, all of them in favor of the bank.
 
@Retired_Engineer:   Anyone getting one is basically spending their kid's inheritance while they are still living.  To some that's an issue, to others, it isn't.  Just have to determine what's right for you and your family.
 
@donnatella: Years ago my in laws asked if they could leave everything to us since my DH is an only child by his mother and his step father has other children they don't have contact with.  Does anyone know, now that we are in the will am I responsible for any debt or anything they incur since they did a reverse mortgage on their house?  I won't have to pay for any of that will I?  I am not familiar with it.  I just know my father in law loves to spend money and have debt and I don't want to be responsible for all that.  I have enough of my own to worry about.
 
@dotti573: The Estate is responsible. Who is the executor? The house has to be sold and the loan paid off with all the interest, because with a reserve mortgage you make no payments. Also all debts must be paid, up to how much money the estate has. As a heir of the will you are not individually responsible for the estates debt.OH! just wanted to mention don't ever do a reverse mortgage!  Ya kind of telling your loved ones, ** we don't care what mess we're/I'm leaving you to deal with..............
4951
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Ray Active Indicator LED Icon 17
~ 8 years ago   Jul 16, '15 12:42pm  
OH! just wanted to mention don't ever do a reverse mortgage!
 
@thegoodwife: REPEATdon't ever do a reverse mortgage!
4951
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ForeCPA90 Active Indicator LED Icon 9
~ 8 years ago   Jul 16, '15 1:06pm  
heir
 
@Ray: Unless you dislike your heirs.
Joking (kind of), I agree with you.  Last resort situation only.  I would rather financially support my mother than let her take out a reverse mortgage. 4951
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Retired_Engineer Active Indicator LED Icon 13
~ 8 years ago   Jul 16, '15 1:08pm  

@dotti573: The Estate is responsible. Who is the executor? The house has to be sold and the loan paid off with all the interest, because with a reserve mortgage you make no payments. Also all debts must be paid, up to how much money the estate has. As a heir of the will you are not individually responsible for the estates debt.
 
@thegoodwife:   Good summary!  I can only add that ALL debts of the estate must be paid before any heirs get any inheritance from the estate (except for insurance, annuities, etc. In which you are designated as the beneficiary).  If the estate has more debts than assets, then the heirs won't get anything from the estate,  but the heirs also don't have to pay any of the estate's debt.When I lost my parents, I was fortunate that my parents had no debt and had a little money put away.  I sold my half ownership of their house/land to my sister at a greatly reduced price because she wanted to live there.
4951
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radiogirl30 Active Indicator LED Icon 3 OP 
~ 8 years ago   Jul 16, '15 1:26pm  
Thanks for all the advice!  I will tell her not to do it. 4951
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fcabanski Active Indicator LED Icon 16
~ 8 years ago   Jul 16, '15 1:49pm  
A sucker is born every minute. 4951
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GoldenGirl Active Indicator LED Icon 15
~ 8 years ago   Jul 16, '15 2:43pm  
I would avoid it at all costs.   That being said I would not give her advice from a chat forum, she needs to sit down with a financial advisory and review her options.  Good Luck !! 4951
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dotti573 Active Indicator LED Icon 15
~ 8 years ago   Jul 16, '15 4:07pm  

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>> OH! just wanted to mention don't ever do a reverse mortgage!
 
@thegoodwife: REPEATdon't ever do a reverse mortgage!
 
@Ray: We tried to tell them this but they did it anyway. I am not sure who the executor is.  I think it may be my DH.  I will have to ask one of these days.   As someone said above, we did feel like they were saying ** to us but it's their house, debt and they are adults so they can do whatever they want.  I'm sure if my father-in-law doesn't pass before my mother-in-law all that will be left is debt.  No assets since money can't stay in my father-in-laws pocket for more than 5 minutes.
4951
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Retired_Engineer Active Indicator LED Icon 13
~ 8 years ago   Jul 16, '15 4:29pm  
My mother predeceased my father and he was very frugal all his life.  If my father had predeceased my mother, she would have blown their money and/or given it to her leech nieces on her side of the family.  They were always kissing up to her with their hands out and she often gave them money.  Instead, they got squat after Mom, then Dad, died!  Their mother died 10 years ago and the four sisters are still fighting over her home and possessions.Parents don't OWE anything to their children in an inheritance, but it's nice to leave them something.  Neither of my parents got any inheritance (except for a few mementos) from their parents, so my sister and I were lucky to have gotten a small inheritance from our parents. 4951
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ForeCPA90 Active Indicator LED Icon 9
~ 8 years ago   Jul 16, '15 5:31pm  
It always strikes me as odd when people talk about an inheritance like it is a birth right and some sort of rip off if you don't get one.  My ex's family were like this, they all expected something and got upset when their parents would take an expensive vacation.  Parents don't owe their kids anything at that point. I would rather see my parents (just mom now sadly) enjoy themselves. 4951
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Stealth83 Active Indicator LED Icon 16
~ 8 years ago   Jul 16, '15 6:01pm  
Removed By Request 4951
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