Check out our brand new Local Poker Communities! Get updates and interact with poker players in your area.
Visit the United States Poker Community | Visit the California Poker Community | Read more about the Launch of P5s Local

Reverse Mortgages

Reply to Thread
  1. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 9th, 2011 (2/9/2011 10:55pm)

    Any body familiar with these? My widowed mother is looking into this and what is sounds like is she is basically selling her house for market value to a finance company that let's her live there until she dies and then they take the house.

    It's a lake house on a beautiful lake, in the mountains surrounded by a national forest. The house is in my name and my sisters so we'll have to get it back in her name. I know my sister and I will get screwed on this deal but if everything else makes sense we are going to do it. I just don't know enough about these.

    I need pros and cons if you got any. Or really just cons, it's a big pro to put cash in mom's hands.
    thanks OT
  2. dolphin13 dolphin13 is online now OT Vice MVP

    Chicago, IL
    United States

    Posts: 23,740
    Joined: Jan 07

    Feb 9th, 2011 (2/9/2011 10:57pm) in reply to ginwilly

    why dont you and your sis give your mom some money each month and then get to keep the house.

    reverse mortgages should be avoided if at all possible
    Edited By: dolphin13 Feb 9th, 2011 at 10:57 PM
  3. phish42O phish42O is offline

    Houston, TX
    United States

    Posts: 3,728
    Joined: Jun 06

    Feb 9th, 2011 (2/9/2011 11:01pm) in reply to dolphin13


    Edited By: phish42O Feb 9th, 2011 at 11:03 PM
  4. coolhandkev coolhandkev is offline

    IL
    United States

    Posts: 5,974
    Joined: Aug 07

    Feb 9th, 2011 (2/9/2011 11:01pm) in reply to phish42O

    Cons - lots of fees and most of them upfront. Pretty much this is a last resort for retirees who need cash. I think you can run the numbers both ways against just doing a home equity loan and see that the loan is more attractive and you still own your house. Also I think there is insurance required with a reverse mortgage which is makes a line of credit or equity loan even more attractive because you don't need that extra insurance.
  5. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 9th, 2011 (2/9/2011 11:02pm) in reply to coolhandkev

    thanks Dolphin, I keep hearing they are bad but no details. She won't take money from us, we tried. Why should they be avoided?
    Thread Starter
  6. phish42O phish42O is offline

    Houston, TX
    United States

    Posts: 3,728
    Joined: Jun 06

    Feb 9th, 2011 (2/9/2011 11:09pm) in reply to ginwilly

     
    Originally Posted by ginwilly View Post

    thanks Dolphin, I keep hearing they are bad but no details. She won't take money from us, we tried. Why should they be avoided?


  7. NUTZREALHUGE NUTZREALHUGE is offline

    Houston, TX
    United States

    Posts: 3,329
    Joined: Oct 05

    Feb 9th, 2011 (2/9/2011 11:13pm) in reply to phish42O

    reverse mortgages are a ridiculously terrible deal and are predatory in nature.

    if she wants to get money out of the equity in her home, why not just approach a bank for a home equity loan? Id imagine youd get better terms.
  8. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 9th, 2011 (2/9/2011 11:17pm) in reply to NUTZREALHUGE

    thanks guys, a friend of hers did this and is trying to talk her into it so she'll have a travel buddy. I'm leaning toward my sis and I just getting 100k equity line and putting her name on it. I just need to convince the women in the family.
    Thread Starter
  9. dolphin13 dolphin13 is online now OT Vice MVP

    Chicago, IL
    United States

    Posts: 23,740
    Joined: Jan 07

    Feb 9th, 2011 (2/9/2011 11:23pm) in reply to ginwilly

    What they don't tell you is ... that the front load is very high," Basich says. He says lenders like reverse mortgages because "these (loans) are very profitable to write in the short term." Front-loading refers to upfront costs, paid out of the home's equity at closing. As with conventional mortgages, reverse mortgage lenders make money the old-fashioned way: through interest, origination fees and points. The interest rate varies according to the market. However, closing costs are significantly higher with reverse mortgages.

    http://www.bankrate.com/brm/news/mor...ortgage_a1.asp

    i would just stay away from it, if at all possible.
  10. vewysneeeaky vewysneeeaky is offline

    Posts: 296
    Joined: Jan 11

    Feb 9th, 2011 (2/9/2011 11:28pm) in reply to dolphin13

    http://www.marketwatch.com/story/som...h?pagenumber=1

    I wouldn't do it for one of my parents. There are plenty of programs available for helping elderly with their finances
  11. buchiYAYO buchiYAYO is offline

    Hampton, VA
    United States

    Posts: 9,218
    Joined: May 06

    Feb 9th, 2011 (2/9/2011 11:43pm) in reply to vewysneeeaky

    Why dont you just let her live in you and your sisters house and keep it when she dies? Give her a pitcher with a brita filter and 7000 ramen noodle packs and tell her you'll be by in the summer with the kids to visit.
  12. norcaljeff norcaljeff is offline 2010 OT Thread Kill Leader

    San Francisco, CA
    United States

    Posts: 36,709
    Joined: Sep 07

    Feb 10th, 2011 (2/10/2011 12:03am) in reply to ginwilly

     
    Originally Posted by ginwilly View Post

    The house is in my name and my sisters so we'll have to get it back in her name. I know my sister and I will get screwed on this deal but if everything else makes sense we are going to do it.

    uh-oh. why is it in your names anyways? the ideal is for it to be in her name so you get it on a stepped-up basis when she dies.

    I don't think you can just put it in her name and have her sell/reverse mortgage it. pretty sure there are big tax implications. pm shortyjacksn or willywoo imo

    also, if she "won't accept money" from you two, tell her it's better than costing you money and you losing the house.
  13. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 10th, 2011 (2/10/2011 12:03am) in reply to norcaljeff

    oh shit buchi, I bought her a brita pitcher for Christmas, half way there, now I just need the noodles and to clean out a bedroom for her.
    Thread Starter
  14. joeykukzMSU joeykukzMSU is offline

    Peoria, IL
    United States

    Posts: 2,406
    Joined: Mar 08

    Feb 10th, 2011 (2/10/2011 12:09am) in reply to ginwilly

    reverse mortgage is like the " we settle your credit card debt for half the cost" but for your home. Sounds good but sucks balls and last resort only,.
  15. sol160 sol160 is offline

    Lagrangeville, NY
    United States

    Posts: 4,342
    Joined: Oct 05

    Feb 10th, 2011 (2/10/2011 12:10am) in reply to joeykukzMSU

    i talked my parents out of doing it a few years ago. glad I did.
  16. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 10th, 2011 (2/10/2011 12:12am) in reply to buchiYAYO

    Jeff it went into our names years ago. The main reason is a house has to be out of your name for at least 5 years or it's fair game to a nursing home (this was over 10 years ago, don't know what the laws are now). She is uber independent and says she never wants to live with any of her kids. My parents left their MI house to my brother, my sis and I got this one.

    It's also safer than trying to guess what inheritance tax will be by eliminating this little problem.

    My plans were to buy out my sister and retire in this house some day but I'm trying to do what's best for my mother and put my wants away. That's the only reason we even considered this. Her friend thinks it's the best thing ever and wants a travel buddy.

    Mom is 76 and still works full time as a counselor for teen druggies. She's thinking of retiring (lol) and was thinking along the lines of hitting the lottery with this.

    Good advice ITT, I'll try to talk her into avoiding rape and reverse mortgages.
    Thread Starter
  17. buchiYAYO buchiYAYO is offline

    Hampton, VA
    United States

    Posts: 9,218
    Joined: May 06

    Feb 10th, 2011 (2/10/2011 12:15am) in reply to ginwilly

     
    Originally Posted by ginwilly View Post

    .

    Good advice ITT, I'll try to talk her into avoiding rape and reverse mortgages.

    and pick up some noodles
  18. Underdog Underdog is offline MVP of OT (self-proclaimed)

    Posts: 20,067
    Joined: Jan 05

    Feb 10th, 2011 (2/10/2011 12:16am) in reply to buchiYAYO

    pm Fred Thompson.

    LOL. What a fucking lowlife pos he turned out to be.

  19. ace bentley ace bentley is offline

    Marble Falls, TX
    United States

    Posts: 1,009
    Joined: Mar 07

    Feb 10th, 2011 (2/10/2011 12:23am) in reply to Underdog

    Don't know what the property tax situation is like where this house is located, but in Texas I'd rather have my elderly mom homestead a property than have it in my name without the homestead exemption.
  20. emcee21 emcee21 is offline

    Orlando, FL
    United States

    Posts: 15,891
    Joined: Feb 06

    Feb 10th, 2011 (2/10/2011 12:58am) in reply to ace bentley

    Eh, can't say I really know what I'm talking about, but I've given some thought to the question of reverse mortgages, and my instinct is that there's a bit of unjustified FUD in this thread. Reverse mortgages aren't as good a deal as say, having a bunch of money saved up and not needing one, but they're not as bad as pissing away your SS making mortgage payments on a house that you're just going to pass on to your rotten kids who never call and you don't even like. The bank's got money, they will give you that money, and you can spend it, then die happy. The idea has its appeal.
  21. coolhandkev coolhandkev is offline

    IL
    United States

    Posts: 5,974
    Joined: Aug 07

    Feb 10th, 2011 (2/10/2011 1:11am) in reply to emcee21

     
    Originally Posted by emcee21 View Post

    Eh, can't say I really know what I'm talking about, but I've given some thought to the question of reverse mortgages, and my instinct is that there's a bit of unjustified FUD in this thread. Reverse mortgages aren't as good a deal as say, having a bunch of money saved up and not needing one, but they're not as bad as pissing away your SS making mortgage payments on a house that you're just going to pass on to your rotten kids who never call and you don't even like. The bank's got money, they will give you that money, and you can spend it, then die happy. The idea has its appeal.

    In your scenario it makes more sense. The biggest negative effect of a reverse mortgage is long term net worth and that doesn't matter to people who really don't care about passing down any money or don't have anyone to pass down money to. Not only are you losing initial equity (by paying fees up the ass) but you are losing tons of future equity if say you live another 25 years. That's 25 years of home appreciation that is not in your estate but again that only affects those who care about having an estate. If I had no kids or hated my kids I would play to die with my last penny in my grave and a reverse mortgage is a great way to do that.
  22. ginwilly ginwilly is offline

    Dublin, GA
    United States

    Posts: 8,167
    Joined: Jan 06

    Feb 10th, 2011 (2/10/2011 3:27am) in reply to emcee21

    That was my initial reaction when it was brought up. I thought why shouldn't she try to die even and have a blast?

    I started the thread during the call with my sister and she was leaning toward doing this because it would be really cool to have a couple hundred grand to go play with while Mom is still healthy and vibrant, she's getting up there.

    My mother would never use an equity line of credit, she doesn't need the money but she's definitely earned the right. She'll have 2 pensions and SSI whenever or if ever she retires. It's definitely not a need thing, I was just wanting her to spend my inheritance.
    Thread Starter
  23. tieful tieful is offline

    Posts: 1,822
    Joined: Jan 06

    Feb 10th, 2011 (2/10/2011 4:12pm) in reply to ginwilly

    If she's stuck on having a reverse mortgage why don't you be the "bank". Give her the same terms she would get from a commercial bank - win/win.
  24. michlad michlad is offline

    Bloomington, IN
    United States

    Posts: 1,476
    Joined: Apr 06

    Feb 10th, 2011 (2/10/2011 4:15pm) in reply to buchiYAYO

     
    Originally Posted by buchiYAYO View Post

    Why dont you just let her live in you and your sisters house and keep it when she dies? Give her a pitcher with a brita filter and 7000 ramen noodle packs and tell her you'll be by in the summer with the kids to visit.

    Weeeeee! looool
Reply to Thread

Similar Threads