My mother and step father recently reversed the mortgage on their 200,000 dollar home, both are 72 years old with minimal income no debt, any hope for preserving the family home of over 70 years. Sincerely, scott
Dave Ramsey, What Is Your Opinion Of Reverse Mortgage?
I heard this on the dave ramsey show and dave isn't really sure about it and neither am I... Supposibly there is some sort of insurance to protect this and that but it sounds like a bad idea and there are probably loop holes in the paper work etc...
Dave Ramsey has had a somewhat negative view of reverse mortgages, however his view has been based on some out dated information as well. His criticism includes that the closing costs are high, there are no fixed rate reverse mortgages, and there is no equity to leave the kids. While those factors have played a role in the past, they have not been a hindrance for a number of years. Fixed rate reverse mortgages came out a few years ago, kids receiving any remaining equity has been in place for over a decade, and the closing costs are a little higher than a conventional mortgage, but not significantly higher.
I do agree that a reverse mortgage is not the right solution for all, however there is a lot more to them than many people realize. There are significant benefits, and the drawbacks of today's reverse mortgages are minimal in comparison to the past.
I do agree that a reverse mortgage is not the right solution for all, however there is a lot more to them than many people realize. There are significant benefits, and the drawbacks of today's reverse mortgages are minimal in comparison to the past.
A reverse mortgage is a loan for senior homeowners that uses a portion of the home's equity as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance.
All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.
All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.