Hi, Newbie Wondering About Reverse Mortgages

[CaliGirl]

Hi Gang,
I am 61, no kids or heirs, and recently lost my job. A pension and SS at 62 equals my spending before losing my job. I have $150K in retirement accounts and no debts except for $90K on a $300K home. I also have long term care insurance, med and dental too.

If I decide to stay where I am and not buy a condo, why can't I get a good reverse mortgage to pay it off and just stop worrying?

 

[FinanceDude]

Does you have enough savings to get through until you can file for the pension and SS??

 

[lemming]

The more I looked at reverse mortgages the uglier they looked.

You would get a
terrible rate of return at your young age and it would eat up the equity you have in your place well before you would need to be out of it. Remember it would start out with the balance of your current mortgage, their fees, and possibly repairs as a interest accruing balance.That doesn't leave much for a payout.

If you are going to have a pension in another year spend out of your taxable portfolio until then. Maybe take out a HELOC and use that for medical and home costs to spread those costs over a few years.

 

[CaliGirl]

The more I looked at reverse mortgages the uglier they looked.

Right, I was thinking about HELOC just to get rid of the mortgage payment, if Medicare or whatever comes next, proves expensive.

I have savings to get thru the next year just fine. I would like to work part time and delay SS and have xlnt skills, but hiring is pretty slow around here.

 

[GregLee]

I've been pretty interested in a reverse mortgage and might get one, one of these days. It makes sense for me, because my wife and I never intend to move from our present house, and we have no reason to preserve our equity in our house --- in fact we'd like to spend it, without having to move away. I don't know of any alternative to a reverse mortgage that would let us spend that equity. I guess that the suitability for you of a reverse mortgage might depend on how closely your situation resembles mine.

 

[CaliGirl]

Wait, I didn't mean HELOC, I meant HECM, Saver Reverse Mortgage, a low cost version of the reverse mortgage.

 

[Sirka]

Reverse mortgage is BAD idea

The more I looked at reverse mortgages the uglier they looked.

You would get a terrible rate of return at your young age and it would eat up the equity you have in your place well before you would need to be out of it. Remember it would start out with the balance of your current mortgage, their fees, and possibly repairs as a interest accruing balance.That doesn't leave much for a payout.

ITA Unemployment should help with payments util you move on or what ever you decide. Don't through away you equity ($200K), it's hard to make it back.

 

[Sandhog]

The more I looked at reverse mortgages the uglier they looked.

You would get a
terrible rate of return at your young age and it would eat up the equity you have in your place well before you would need to be out of it. Remember it would start out with the balance of your current mortgage, their fees, and possibly repairs as a interest accruing balance.That doesn't leave much for a payout.

If you are going to have a pension in another year spend out of your taxable portfolio until then. Maybe take out a HELOC and use that for medical and home costs to spread those costs over a few years.

I agreed with you. It's sort of legal scam to tied people down to their house and can't move anywhere. Never mind about terrible ROR. If you move, you lose everything.

 

[CaliGirl]

True. It would make it harder to sell, should I want to do that or need to.