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Myrtle Said:

Reverse Mortgage Question?

We Answered:

There have been some recent changes in the law that makes reverse mortgages a much better deal than before.

For example, the fees that can be charged used to be VERY high; they are now capped.

For most older folks,who have no other reliable source of income, the Reverse Mortgage can be a good option. I have read up on this subject quite a bit, and my initial skepticism has been reduced quite a bit after the recent law changes.

I do not know personally for anyone doing this, but if you Google "Reverse Mortgage", there are quite a few articles on the pros & cons of it.

Duane Said:

Reverse mortgage question?

We Answered:

the intent of a RM is to use equity in a home as an adjunct to social security; pure and simple.

with a RM, the owner if a debt free home [the idea of a RM is almost exclusively for debt
free homes] would put a mortgage debt on the home and collect monthly payments
instead of getting a lump sum. IN 30 yrs, whomever owns the house would have to
re-finance the house or use other cash to pay off the debt the RM accumulates.

Since this house has little/ no equity, it would not qualify.

HOWEVER, if they are down to 15% OF what the mortgage debt was, I have good news
for you.

ONLY those indifferent about our economy don't know that property values crashed
last year. HOWEVER, excluding those areas awash in local political corruption and
environmental hazards, all real estate increases in value--that is a given.

In 1 yr, in the US, ALL real estate will begin a crawl back up--if it has not already
started in each city. 3-7 yrs ago, the increase was 3-10% a year, where the 10% was too much.

In 3-12 yrs, depending on where a person lives, the prices and values real estate
had before the crash occurred will have returned.

so, your parents only need wait. seriously. for now, they need to seek new
monthly revenue sources elsewhere.