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Old 01-09-2009, 03:21 PM   #41
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buy one dozen free range farm eggs. candle them, keep the fertilized ones warm and eat the others. When the fertilized eggs hatch keep the hens and a rooster, eat the other roosters. continue as above with each clutch of eggs. within ten years you will have the biggest egg farm in your state or be dead from excessive cholesterol (too many egg yolks). either way...
Winlock, Washington - we got tours in grade school. After the egg business went bust - for a while they tryed to push it as 'the' place to retire.

heh heh heh - plan B, American passport, pssst Wellesley and the cheapest place to retire you can find.
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Old 01-09-2009, 11:37 PM   #42
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One major drawback to the RM is that you had better like where you RM or you will take another financial bath when your move (unless it is to the "hereafter")!

Explain, please......before it's too late to help my brother! Are you referring to the closing costs for the RM? I sortof think the RM might provide some protection against falling RE values. I do agree the RM is mostly for folks that want to stay in thier homes.
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Old 01-10-2009, 07:30 AM   #43
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Explain, please......before it's too late to help my brother! Are you referring to the closing costs for the RM? I sortof think the RM might provide some protection against falling RE values. I do agree the RM is mostly for folks that want to stay in thier homes.
From my investigation of RM's it is mostly the up front costs which can be up to about $20K coupled with the fact you do not get a great percentage of equity in the form of cash - maybe like about 60%. So as an example I would use a home, fully paid off, with an appraised market value of $200K. So you would get, maybe $115K Cash out. Then additionally the interest on the money, which you do not pay currently, but it is added (actually subtracted from the final balance) to the "balance" when the home is sold. With that kind of monetary encumbrance on the future sale of the property I doubt there will be much cash left in the end. That coupled with the fact that if a RM holder must move permanently to a Nursing Home or other care facility that would be, the way I read this stuff, an occasion to force the sale of the property. IMO it seems much better, financially, for other family members to purchase the home from the owner or for it to be set up as a life estate. Be careful here and let me point out clearly I AM NOT an EXPERT on the subject - you would need to get legal counsel to be sure it can work. In any even the RM MAY work for some but one needs to search out the alternatives.
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Old 01-10-2009, 08:51 AM   #44
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From my investigation of RM's it is mostly the up front costs which can be up to about $20K coupled with the fact you do not get a great percentage of equity in the form of cash - maybe like about 60%. So as an example I would use a home, fully paid off, with an appraised market value of $200K. So you would get, maybe $115K Cash out. Then additionally the interest on the money, which you do not pay currently, but it is added (actually subtracted from the final balance) to the "balance" when the home is sold. With that kind of monetary encumbrance on the future sale of the property I doubt there will be much cash left in the end. That coupled with the fact that if a RM holder must move permanently to a Nursing Home or other care facility that would be, the way I read this stuff, an occasion to force the sale of the property. IMO it seems much better, financially, for other family members to purchase the home from the owner or for it to be set up as a life estate. Be careful here and let me point out clearly I AM NOT an EXPERT on the subject - you would need to get legal counsel to be sure it can work. In any even the RM MAY work for some but one needs to search out the alternatives.
I agree with your assessment. It is much better to have somebody like family invest in the property, essentially setting up a low cost RM. Of course many people won't be able to set up a situation like that.

The RM can be a solution, but it's a rather high cost way to go. But if you really want to stay in the house and you really need the cash flow, and you don't care about the remaining value (and thus estate value), then it can be a way to access equity. Selling would be a better way to do it without giving up a large portion in fees and interest.
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Old 01-10-2009, 10:02 AM   #45
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Thanks for additonal comments on RM by OAG and Gardnr. I generally agree with your opinions which is why I called the Reverse Mortgage 'plan B'.......but still may be very suitable for the OP's hypothetical situation (or my brother.)
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