1 Reply Latest reply on May 7, 2011 5:40 PM by Chrysalis

    Reverse Mortgage

    Cuteypie

       

      Is it a good idea to get a Reverse Mortgage,since selling a home is so difficult these days ?

        • Re: Reverse Mortgage
          Chrysalis

          Like any financial option, a reverse mortgage is a good choice for some people but not for everyone. The good news is that you can get most of your equity out of your house (is it 60% or 70% of the appraised value?) so you can use the money when you need it. You don't have to make payments, and you get to live in the house forever.

          The bad news is that, despite what the reverse mortgage salesmen tell you, you should consider that you just sold your house to the bank. The costs are very high and they compound quickly, so in 2 or 3 years you will owe more than the house is worth. As I said, you can stay in your home forever, but your heirs might be a little disappointed. (Phooey on them, I say!)

          My 89-year-old mother waffled for 2 years between a reverse mortgage and a home equity loan. She finally decided that she couldn't stomach the thought of trying to repay a home equity loan and perhaps losing her home some day because of missed payments. She got a reverse mortgage and is happy with it.

          There is a lot to think about and many options for you to consider. Don't rush into any such decision.