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| Reverse Mortgages; Good Idea? Bonehead Stunt? | |
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| Tweet Topic Started: Jan 7 2007, 07:22 PM (368 Views) | |
| George K | Jan 7 2007, 07:22 PM Post #1 |
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Finally
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Hmmm? |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| kenny | Jan 7 2007, 07:32 PM Post #2 |
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HOLY CARP!!!
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The concept is great. Live in home till you die no matter how long your live, and get a check every month. Every month your equity does down a little, as the bank's equity ( IOW your loan balance) goes up. If your kids think they have some right to your money after you die then they'll be pissed. But if a kid is bothered by this then they don't deserve an inheritance AFAIC. Screw the selfish bastards; it is YOUR money. When you die the home is sold to pay off the loan balance, and the heirs get what's left. That said I know know the details or if you have to shop very carefully to prevent getting ripped off. Overall I like the idea, but I only know that basic concept. |
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| apple | Jan 7 2007, 07:34 PM Post #3 |
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one of the angels
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good for the retired |
| it behooves me to behold | |
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| BeeLady | Jan 7 2007, 07:48 PM Post #4 |
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Middle Aged Carp
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I would approach this in the same manner as consumer with a broker trying to sell the elderly a return on investment for the rest of their days....with extreme caution. Equity is something that does not always go UP. Interest charged does not neccesarily go down......Kenny, in CA you have to account for the elder property tax as well. Elders can defer some of their taxes due until the estate is settled (at least it was such when we lived there.) It all depends on your property, age, living situation, location, the current economy etc....... Get a professional opinon and then, get a second.
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"My wheel shall sing responsive to my tread, And I will spin so fine, so strong a thread Fate shall not cut it, nor Time's forces break" "Distaff and Spindle: Sonnets by Mary Ashley Townsend" 1895 | |
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| kenny | Jan 7 2007, 07:52 PM Post #5 |
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HOLY CARP!!!
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Sounds like good advice. I'd certainly research the hell out of it first. I just think the basic idea is great. There are lots of poor old folks with a ton of equity who think they have to eat cat food and think there is no choice but to leave their million dollar house to their kids, sell it and move out, or that having a paid off house is always best. |
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| George K | Jan 7 2007, 08:04 PM Post #6 |
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Finally
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I'll be 57 in April. Here's the plan: I have no mortgage on the home I plan to retire into (in Wisconsin). I have a moderate mortgage on my home in Chicago. I will sell that home and get a fair amount of return on it. I have retirement plans through my job. At age 60, I plan to go "part time" at work: no call, no weekends, and work about 30 weeks a year on a per-diem basis. I can do that for 2 years by contract, or longer if my group and I agree. At age 62, Social Security will kick in, and the reverse mortgage may be a nice way to supplement that, as well as beginning to tap into my retirement plans. By that time, no kids in college, and I'm done. I'll build furniture and play my piano(s).
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| kenny | Jan 7 2007, 08:06 PM Post #7 |
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HOLY CARP!!!
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AARP's reverse mortgage page http://www.aarp.org/money/revmort/ |
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| Riley | Jan 7 2007, 08:09 PM Post #8 |
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HOLY CARP!!!
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http://www.cbc.ca/consumers/market/files/h...age/index2.html |
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| JBryan | Jan 7 2007, 08:18 PM Post #9 |
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I am the grey one
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A reverse mortgage is a great way to cash in on your equity in your home especially if you have no one you would like to pass it on to. They will only have to pay taxes on it anyway. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| George K | Jan 7 2007, 08:24 PM Post #10 |
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Finally
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Just looked at the AARP stuff. For my age, at my location, a reverse mortgage will give me about $550 a month. Is that enough to buy a piano with? |
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A guide to GKSR: Click "Now look here, you Baltic gas passer... " - Mik, 6/14/08 Nothing is as effective as homeopathy. I'd rather listen to an hour of Abba than an hour of The Beatles. - Klaus, 4/29/18 | |
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| Mark | Jan 7 2007, 09:55 PM Post #11 |
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HOLY CARP!!!
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When a person reaches "retirement age" as designated by Socialist Security, they should be tax exempt (property and income) for the rest of their days. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| Mark | Jan 7 2007, 09:56 PM Post #12 |
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HOLY CARP!!!
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Weird. Double post. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| QuirtEvans | Jan 7 2007, 11:23 PM Post #13 |
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I Owe It All To John D'Oh
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The real worry about reverse mortgages is that you'll outlive the equity in your home. In which case, you're up a creek, because, when the equity is used up, out you go. Like anything else, it's a useful idea, but it's subject to real risk. Plan carefully, and examine your assumptions about how long you'll live. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| jon-nyc | Jan 8 2007, 02:01 AM Post #14 |
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Cheers
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I think they're a good idea in concept, especially since for most americans their house is the biggest component of their net worth. I would really go through the numbers to make sure you're getting a good deal, though. I suspect many of these are probably paying below market rates. |
| In my defense, I was left unsupervised. | |
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| jon-nyc | Jan 8 2007, 02:11 AM Post #15 |
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Cheers
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Sounds like a great plan, George. |
| In my defense, I was left unsupervised. | |
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| kenny | Jan 8 2007, 04:29 AM Post #16 |
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HOLY CARP!!!
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I thought they paid till you croak no matter what, but this makes more sense. But nobody knows how long they will live. You could live to 115. Then what.
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| Jolly | Jan 8 2007, 10:45 AM Post #17 |
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Geaux Tigers!
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Sorry, bud. Unlike almost any other profession, when they hang M.D. behind your name, you die with M.D. behind your name. You can slow down, but you can never retire.... |
| The main obstacle to a stable and just world order is the United States.- George Soros | |
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| The 89th Key | Jan 8 2007, 10:58 AM Post #18 |
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I'd like to own a home.
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| Jack Frost | Jan 8 2007, 12:58 PM Post #19 |
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Bull-Carp
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They are most commonly packaged with an annuity so the payments do not run out during your lifetime. The interest rate that you are "charged" on the withdrawals is often quite high. Not for the uneducated. jf |
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| taiwan_girl | Jan 8 2007, 01:08 PM Post #20 |
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Fulla-Carp
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There was a case in France where a gentleman signed up a lady for a "reverse mortgage". At the time this was done, she was like 70 and he was 30 or 40. She did end up living until something like 115. He died before her, and his kids had to continue to pay her. Edit: below is the actual situation: ""In 1965, at age 90, with no living heirs, Calment signed a deal, common in France, to sell her condominium apartment...to a lawyer, Francois Raffray. Raffray, then aged 47, agreed to pay a monthly sum until she died, an agreement sometimes called a "reverse mortgage." At the time of the deal the value of the apartment was equal to ten years of payments. Unfortunately for Raffray, not only did she survive more than thirty years, but he died first... at the age of 77." |
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