frenzal rhomb Posted February 10, 2012 Share Posted February 10, 2012 can someone explain to me how it works ( pros / cons etc ) in nice simple terms? Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted February 10, 2012 Share Posted February 10, 2012 Pretty simple, but only available to homeowners 62 years old or older. There are a variety of variations to reverse mortgages (Jumbos, higher interest for loans over appraised value, lower interest if you agree to pay some principal back over the life of the loan, etc), but the basic parameters are as follows: Say your home is paid off, and is worth $200K. Under most reverse-loan programs, you have the ability to access up to 80% of that equity. In this example, you could "borrow" $160K. When you die or decide to move, and the home is sold, that $160K must be repaid (with interest, usually considerably higher than what you would incur in a home equity loan or traditional mortgage). The beauty of the loan is that, if you wish, you do not have to make any monthly payments on it. The principal you borrow just accumulates interest from the day you draw the funds. Its a decent option for seniors that have a decent sum of equity in their homes, but might be living small because their retirement funds have not stretched as far as they imagined. Another useful option that our family took advantage of: 8 years ago, my grandparents took a reverse mortgage on their $600K home, and took a lump-sum of $250K. They then gifted some of those funds to their grandkids to help eliminate some of our debt. It got many of us a fresh start, and gave us access to funds which we would have not received until they died. They figured "Why should our heirs have to live tightly waiting for us to pass away? Let them enjoy some of their inheritance when they need it most, and then still have some available when we finally do kick the bucket". Quote Link to comment Share on other sites More sharing options...
frenzal rhomb Posted February 10, 2012 Author Share Posted February 10, 2012 thats a great explanation and thanks - Im only 42 now and my home is paid - if I live to 62, I would definetly do that if available then cause I have no kids - and my wifes two kids can kiss my a r se - (well one of them) Ill take the 80 percent out and when i die, they can sort out the mess Quote Link to comment Share on other sites More sharing options...
matt770 Posted February 10, 2012 Share Posted February 10, 2012 thats a great explanation and thanks - Im only 42 now and my home is paid - if I live to 62, I would definetly do that if available then cause I have no kids - and my wifes two kids can kiss my a r se - (well one of them) Ill take the 80 percent out and when i die, they can sort out the mess Good for you. We always hear how important it is to take care of loved ones after we pass with life insurance and sound estate planning, while the need to really stick it to those we dislike is often overlooked. Quote Link to comment Share on other sites More sharing options...
Scooby's Hubby Posted February 10, 2012 Share Posted February 10, 2012 I have seen some crazy wills while doing mineral title work. Some of the wills go as far to explain why they only leave heirs $1. It does not pay to piss off your family. Old people never forget. Quote Link to comment Share on other sites More sharing options...
frenzal rhomb Posted February 10, 2012 Author Share Posted February 10, 2012 Good for you. We always hear how important it is to take care of loved ones after we pass with life insurance and sound estate planning, while the need to really stick it to those we dislike is often overlooked. Im sorry - instead of putting 500k into the hands of an addict - maybe I'll just buy him a gun and put it in his mouth for him Quote Link to comment Share on other sites More sharing options...
Big Country Posted February 10, 2012 Share Posted February 10, 2012 Im sorry - instead of putting 500k into the hands of an addict - maybe I'll just buy him a gun and put it in his mouth for him Why not at least direct the money go to a charity organization instead? Jus write up your will to state that upon your death you want the assets liquidated and the proceeds donated to a charity of your choice. Then you aren't paying a bank unneccessarily. Of course, you could also just sell the place at 62, get a rental and already have the assets liquid. Quote Link to comment Share on other sites More sharing options...
frenzal rhomb Posted February 10, 2012 Author Share Posted February 10, 2012 Why not at least direct the money go to a charity organization instead? Jus write up your will to state that upon your death you want the assets liquidated and the proceeds donated to a charity of your choice. Then you aren't paying a bank unneccessarily. Of course, you could also just sell the place at 62, get a rental and already have the assets liquid. cause I can have an extra 200 - 300k on hand (depending on the market for hookers blow and viagra) Quote Link to comment Share on other sites More sharing options...
Woodside Warriors Posted February 10, 2012 Share Posted February 10, 2012 cause I can have an extra 200 - 300k on hand (depending on the market for hookers blow and viagra) Very nice plan. Quote Link to comment Share on other sites More sharing options...
yo mama Posted February 10, 2012 Share Posted February 10, 2012 can someone explain to me how it works ( pros / cons etc ) in nice simple terms? I'm not a big fan of reverse mortgages. Reverse cowboys are a different story. Quote Link to comment Share on other sites More sharing options...
caddyman Posted February 10, 2012 Share Posted February 10, 2012 Very nice plan. I disagree. Why waste good money on blow? Viagra...hell yes. Hell you can talk your doctor into some real good drugs that have the same effect as blow. 20 bucks a month is a hell of a lot better than 150 a night! Quote Link to comment Share on other sites More sharing options...
frenzal rhomb Posted February 11, 2012 Author Share Posted February 11, 2012 I disagree. Why waste good money on blow? Viagra...hell yes. Hell you can talk your doctor into some real good drugs that have the same effect as blow. 20 bucks a month is a hell of a lot better than 150 a night! I agree - havent toched the stuff in years. Hate the after effect - guess it was just a figure of speech I have seen on the Huddle Quote Link to comment Share on other sites More sharing options...
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