Reverse Mortgage Loans

• 

  Michaelsgdec posted: 31 Aug at 7:08 am

  You can only use a reverse mortgage when you have equity in the home. How large is the down payment? In the grand scheme of things reverse mortgages are a bad idea, especially considering inheritance.

• 

  Speedy posted: 31 Aug at 7:47 am

  Not an expert on mortgage finance, but I believe he has to have the house first, in order to take out a reverse mortgage. Otherwise, what’s he borrowing against?

• 

  mark posted: 31 Aug at 8:19 am

  It wouldn’t make sense

  A reverse mortgage is for people that want to tap the equity that they have in their house. i.e. Your dad owns a house that is worth 200k. He gets a reverse mortgage that pays him a monthly payment for a certain number of years, and he gets to stay in the house. When he dies, the house is owned by the mortgage company.

  In your case, your dad would have to buy the house. He would need to incur closing costs and a down payment. And, he wouldn’t even have any equity (beyond the down payment) to tap into. If he has the money, have him keep it in a fixed investment and rent out a house or apartment.

• 

  pamelaonthego posted: 31 Aug at 8:35 am

  for a reverse mortgage he has to have a lot of equity on a house he already owns. They are not convenient. They give you maybe a third of what the current value is (assuming it is paid for) and charge you interest on it. By the end of the loan you have no equity and the bank owns it. The only time a reverse mortgage is convenient is when the person really does not want to leave the house they own; they do not care about leaving anything to their heirs, and they need cash to live that they cannot get anywhere else. AARP has some good information about it. I read about it because I was looking for a job and a reverse mortgage company was hiring. I did not apply for it because I thought it was a rip off.

You must be logged in to post a comment.