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

lets hear some informed opinions....and uninformed as its going to happen anyway.....bob

I've never looked into the reverse mortgage in any depth at all, and rarely even think of it except when I see promotions and marketing for "the product." For some reason, when I saw it mentioned here this morning the first thing that popped into my head was "you will own nothing and you will be happy." That's not an indictment, it's not an accusation, it's not even an opinion...just a statement.

Would be helpful to understand what you are trying to solve for first. That added context would be helpful, as in most instances RM’s are far from ideal.

probably not far off about anything in life...bob

cfran...not really try to solve anything, just wondering why they are so bad as a lot make them out to be....bob

It would probably depend to a great degree on whether you have family and wish to leave them any type of estate.

Pay now or pay later.

this....also you would probably still leave something, just not as much......bob

From what I have read and heard you need to be very careful about the fees charged to maintain the loan.

Imagine it's like everything else...people too dumb to understand and don't bother to read the contract and then bitch later about how they were taken advantage of

They're popular with old folks who didn't plan ahead for retirement or have outlived their savings. They own a house and an RM allows them to borrow against it for money to live on. It all has to be paid back, though, and their heirs usually end up selling the house to pay it off. There's no end to the ways that a scammer can get to them, though. A person considering one needs to be careful about who they go to.

more than likely...bob

Not for everyone. Looks like a great deal - get your money now, owe nothing when you die.

Problem is, it's a very costly type of loan and the occupant still must maintain the property and make repairs as needed. Not like you're living there for free. Most are better off either taking out a home loan or selling and downsizing.

A friend's mother had one. She had a leak in the kitchen, mold, water damage, etc and died without fixing the damage. The originator somehow put a lean on her estate to repair the damage. Made the whole probate process drag on for months on end.

Its a mortgage like any other, to make money for the bank. The bank makes that money from the equity from your property instead of regular interest. That percentage of equity goes to the bank, not you. Might be better to sell the property and downsize, keeping that equity for you self. My folks took out a reverse when they ran out of money for retirement. They missed the real estate market back in 07' 08' when they had offers of over $1.5 mil. Mom wanted to sell , step dad didn't. They ended up with about $400k after it was said and done.
Ya gotta know when to hold em' and when to fold em'.

My uncle did one. Developed terminal cancer and on his death his wife had 30 days to vacate. He had to keep her separated from his money because she would spent twice what he made so there is that.

Do a little more research, this is a very expensive way to tap liquidity and as others have mentioned it’s horrible from an estate planning perspective. In a way it’s similar to buying annuities, given most aren’t smart enough to fully comprehend the hidden costs/fees.

Ironically when people ask about them, and pardon me but I’m generalizing, it’s usually asked by those that have made poor financial planning decisions and now need money. It’s that simple.

so she had to vacate because her name wasn't on the property/loan...sucks but not the banks fault...bob

good points....I will give you my situation.....I don't "need" a reverse mortgage...I own my home, cars, boats...and not talking about old stuff, all 2022 low miles....trailers, tractor etc. don't take ss yet...64+ have money saved to live on ..no debt except living expenses.

going to downsize again. why not take one out? shhitload of equity, don't care if there is anything left, to be used for more hunting/fishing trips. trying to see the downside here....bob
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Seems to me, that a reverse mortgage would be the very last resort.

+1 cfran.

In general, a reverse mortgage is going to be the worst solution to a problem.

I don't have any horror stories. However, I did know a guy who took one out. He died within the year, and the wife was put in an apartment by her relatives and the house was sold. I don't she lasted another year. This was one of those "Apres moi, le Deluge" situations. The old couple was at the end of their ropes and just needed some operating capital to get to the end of the line.

Nobody in this deal was financially literate. However, if it had been me, I'd have pulled my own head off before I signed up for a reverse mortgage.