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Marcia Said:

Reverse Mortgage, Good or Bad idea?

We Answered:

You want to get it through a reputable mortgage lender. I'd be very worried about the fine print. The AARP has good advice on this.

In general it seems like a good idea. You've spent your life building up equity in the house. You might as well spend that money, but you don't want to move. So you sell your house to the bank, who has a contract to let you live there as long as you want. (That's why you'd better make sure it's a good lender, who's not going to screw you at a bad time.)

If you don't want to sell the house to the bank, you can take a Home Equity Loan, which is similar: they loan you the money in exchange for a lien on your house. With the home equity loan you have to keep making mortgage payments, and with the reverse mortgage they just send you money. The Home Equity Loan requires a lot more management on your part, but you keep owning your house. The loan eventually has to be paid off, and that usually comes when they sell the house. If they live a long time... well, that can become a problem.

Shop around for the cheapest reverse mortgage. There can be considerable up-front costs and you want to minimize those.

Once you've got it all set up, though, your parents get their money and can really enjoy their retirement.

Of course every dollar they spend is money you don't get in inheritance, but I say, good for them. Blow the wad. You only live once.

Margie Said:

Reverse Mortgage, Good or Bad idea?

We Answered:

A reverse mortgage is good or bad based on the financial condition or situation of the seniors.

If they are in a good financial condition and have planned well for retirement there is no need for a reverse mortgage.

A reverse mortgage is sort of expensive to obtain, so one of the first things you would want to do is find out the cost of your parents getting this reverse mortgage. You would also be required to get and pay for an FHA appraisal. All repairs to the house found by the appraiser will have to be repaired prior to the mortgage closing.

You might also want to know the amount of funds that would actually land in your parents hand. We do know one thing the $50,000 mortgage would be paid off, as well as any other liens found on the property, plus the expense of the reverse mortgage, so on a good day your parents would wind up with approximately $45,000 in their hands.

They can receive this in one lump sum or spread out over a period of time.

They no longer will be required to pay a monthly mortgage, they could payoff any debts that are owed, with the remainder of the funds being placed in a bank account of some other account.

The other part to this reverse mortgage is that your parents will be able to stay in the house as long as they both are alive.

Once they are no longer with us the heirs of your parents would have to decide if you wanted the house or not. If you decide you want to keep the house then you would be required to pay off the mortgage company that gave your parents the reverse mortgage.

If you decide you did not want or could not afford the house then the bank would take legal action to secure the property.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

Yolanda Said:

I have a problem with my mortgage company and loan. How do I sue them?

We Answered:

Your motgage company gave you ESTIMATES. They are not liable.

Note that it is very very common (when buying a new home) for the taxes to be estimated on the unimproved land, then for it to go through the roof a year later. This happens to every new home buyer I know if they don't have a good realtor or advice before hand.

Nothing in your post is a law suit. People constantly try to sue their way out of everything.


They did make some mistakes, but suing is not the answer. Get in their office and sit down with a person and get it fixed.