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Pauline Said:

CAn someone explain a reverse mortgage purchase when buying a home?

We Answered:

A reverse mortgage is not a purchase at all it is a refinance of his current home. There MuST be a lot of equity in the home in order to make this one work. It is an FHA product for the elderly that allows them to take cash out of their home and never pay on the money. It just sits there and collects interest and at the time of their death the property must be refinanced by the estate or sold to satisfy the loan. If there is no equity in the home FHA takes the home and sell it on their own and takes the loss with the mortgage insurance making up the rest.
Hope this answers your question
I am a mortgage banker in TN & KY

Velma Said:

Has anyone purchased a reverse mortgage? What are the pitfalls?

We Answered:

Reverse mortgages are for people over 62 who are "house rich" meaning they have a lot of equity and they need a constant stream of income. This is good for people who need the money and maybe don't have any heirs. The problem with this is that when you die, guess who gets the house? Not your heirs, the insurance company or your heirs have to buy them out.

When we pushed reverse mortgages, one of ours sales techniques was "don't your kids want you to enjoy the rest of your life?". I didn't like doing that.

But if you don't care about leaving anything after you die, then go for it. But if you want to leave your property to your heirs, don't do it.

Kent Said:

Is a reverse mortgage a good safe way to go right now?

We Answered:

As of April 1, 2009, all reverse mortgages went to "live pricing," meaning interest rates and margins will be fixed daily, not weekly. Thus, when seniors are shopping for reverse mortgages, they must be sure to compare apples to apples because originators (salespeople) may try to hoodwink even the sophisticated potential borrowers by backdating their Good Faith Estimates and quoting products that are not even available on the market any longer. Make sure to do your homework and read up on what is current, as real estate loans of any kind are changing rapidly with the times.

Douglas Said:

can i purchase my dads reverse mortgage home?

We Answered:

There are extreme fees to pay if you back out of a reverse mortgage.
Not to mention, you'll have to pay back everything they paid your dad.

I'm disspointed on all these commercials that make reverse mortgages sound so good.
When in fact, it is one of the worst financial decisions a person can make.
I would consider letting him keep his reverse mortgage, and then buy the house when it goes in the market many years from now.

Research - breaking the reverse mortgage contract fees.
The house will be sold at appraised value or higher when he passes.
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Sally Said:

Reverse Mortgage value Bankers will consider?

We Answered:

In the US a year after purchase the purchase price makes no difference anymore. They would only consider the current market value (for good or bad).

I don't imagine your country would be much different.

Marlene Said:

Can you use a reverse mortgage for a purchase of a home and get down payment assistance?

We Answered:

No, I see why you think nobody will understand. A reverse mortgage is only for the elderly who already own a home so why they would be wanting to pay a down payment is the main confusion.

Veronica Said:

Can I file bankrupty if I have my home in a reverse mortgage? I have a business building that I can't sell.?

We Answered:

yes but all assets will be tabled and your reverse mortgage may go out the window!!! talk to a lawyer!!!