Home Forums Hunting & Shooting Hunter's Campfire reverse mortgage good and bad

One of my uncles took one out. Both son's have passed away and daughter told him she didn't want the house and 3 or 4 acres that goes with it.

He took the money, bought a new truck and traveled. He's made trips all over the continental US and went to Alaska. Been doing this for the last 10 years or so. Still lives in the house and all is fine. According to him, when he passes away, his daughter will have 2 options. One, pay the company back their money and the place is hers, or two, let the company have the place.

It's working for him, but he's the only person I know that has gone that route. I might add that he didn't owe and hasn't owed anything on the house for 40 years or more. That might make a difference, I dont know.

Up front costs can be expensive.

Loan origination fees as much as $6,000.

You pay the full mortgage insurance premium up front, about 3% of the total amount.

Same normal closing fees, as much as $5,000

You may have to pay for any repairs needed up front if the house doesn’t meet inspection or HUD guidelines.

They get mostly desperate, house rich low income owners.

the bank is not entitled to more than what is owed to them......even if they sell it. good for your uncle...bob

Any chance of selling out, moving into a 55+ retirement community with low property taxes and having enough cash to do what you want to do? Or would that be a fate worse than death!?

One thing to consider.....is that children are not entitled to shìt.

What purpose is this?

You don't have any children or grand children to leave it to?

As Calvin pointed out it all depends on the terms. I would talk to a professional ( realtor, Banker etc ) that I trusted if I was not sure I could live with the terms.

You don't leave an inheritance to your children because they are entitled, you leave them an inheritance because you love them and they love you.

I agree....bob

Calvin....I would still want the money from my house, no matter were it was located....the question is do I die with a paid off house and leave it to kids or my wife and I enjoy the extra money as we slip/dive into older age?

they would sell it anyway....I have busted my ass to get what I have.....they can bust theirs too if its important enough for them to get ahead.....bob

with out question.....bob

...this is the time for my wife and me.....let them work hard, didn't kill me.....bob

Perhaps but this isn’t a one size fits all answer. Some people like me will choose to leave my kids something upon death, but it’s not their God given right, it’s what we want to do as a couple. Seems like you have a chip on your shoulder.

True, but I cannot think of anyone I would rather help out than my 3 children and our 5 grandchildren. As long as they are living responsibly.

We aren't wealthy but are completely debt free and have enough income for our lifestyle which doesn't include island resorts, jewelry, or casinos. We do travel, mostly to the western U.S.

My wife is a certified financial advisor and she states a reverse mortage is a poor choice. She also doesn't recommend annuities or life insurance.

so how else do you tap the equity in your home?.....if you have read from the beginning than you know I don't have to do it......bob

If an elderly home owner is struggling due to not enough money coming in, it could make sense for him/her to get a reverse mortgage, but there are pitfalls that one needs to be careful of, such as the duty to maintain the value of the house (upkeep, repair) as it was when the reverse mortgage began, and you must actually live in the home (not in a nursing home for any long stretch). There are clauses in the contracts that allow the banks to steal the home and kick you out should these terms be violated.

banks steal the home....you are smarter than that thr.....bob

Good post. Specifics are nice. We always hear that RM are bad, but rarely are reasons given



Harsh, but another good post. I'd hate the thought of an elderly parent doing without in order to pass and inheritance to me. I'd rather they spend their home equity to improve their quality of life.