Reverse mortgages

Anybody have thoughts or advice on reverse mortgages?
65 y/o single male with no debt, no heirs, own home out-right.
House needs some work but should appraise for around 80K when I'm ready in 18 to 24 months.

As it is I make enough from Social Security and a small pension to live comfortably but frugally.
Don't want to totally give up the security of owning my house even if it is somewhat neglected. In order to go as full time as I'd like to I'd require a pretty decent, reliable vehicle but wouldn't be able to afford payment's for that with current income. Since no one to leave anything to I'm thinking a reverse mortgage might be perfect for someone like me who doesn't want to fully divest from owning my house but allows me to access my equity.

Would like to get a reverse mortgage to buy a newer model but used GMC or Chevy truck. Right now I have a 2011 F-150 with 120k miles on it but want something newer that's more capable of towing the 7x16 cargo trailer I'd like to get eventually that hopefully would be trouble free for a good while.

Thanks in advance.
MTA

my older friend researched it quite in depth and had meetings and more and said in the end....no way.

but that was for her. She said what the pay back was counted as 'so over the top' it didn't suit her life.

So this is a very very personal issue in a way ya know. She had a 400K house and nearing 70 with her hubby and no extra income coming in and had some equity mortgage due thru borrowing on it and what she found for them personally was was the cost was way to high.

but again, that is a personal travel on it ya know.

IF IT SUITS YOU and WORKS in numbers for you the consider.....but CHECK real in depth on what you are signing.

sorry wish it could be more but that is all I got on it LOL

Yep there is no free access to money but with today's housing market I bet your property is worth a lot more than you think! There are options and property managers that for 7 to 15% will AirBnb it for you and you can block out the dates you want to be there even. Look closely as big corporations are starting to manipulate the markets to make a lot of money and inflate prices.

If the house would appraise for around $80k then the average reverse mortgage value might be about $40 thousand, maybe a bit more.

You do have to keep the house maintained and do repairs to keep the house in sellable condition and keep current on taxes, you have to remain in the house, and remain living there, with the house as your primary residence.  When you die, or move out, go full time, or maybe end up in a nursing home, (for example) the mortgage becomes due and they will foreclose on the house. If there are no beneficiaries, then that's not really a concern for you.

While living there, you can still travel for recreation, of course. The problem there is that a house that is not lived in for weeks, or months, at a time begins to have problems. You will have to keep returning to the house, and spend money on the house, keeping it up to par, as well as spending money on the rig you plan to travel in. 

Run the numbers to see if it suits you, but be skeptical and look for the fine print in any possible contract or offer.

Right now, the housing market is pretty solid, you might find an actual buyer to take it off your hands (possibly for even more than asking price) and then you will have a big fat wad of cash and you could buy your desired rig, fix it up as you see fit, and then rent a storage unit for awhile as a 'home base' for your belongings. 

As mentioned above, do your homework!

Would Tom Selleck steer you wrong?... actually, when I see out of work actors hawking any kind of product I get very cautious.

With interest rates so low maybe just take out a mortgage loan.

Guy

In some markets sellers are getting cash offers well over their asking price sight unseen and as part of the deal being allowed to stay in the home rent free for several months. It is a whole different market now as "big money" looks at single family dwellings as investing possibilities by leaving them empty and raising rents on working properties they own as new housing can not build fast enough. They are even buying those for asking price even though contractors have not even broken ground on those properties. It is just totally out of control. Gonna be a lot of people trying to afford a place to live and a few super wealthy corporations using their money they would normally have to pay in taxes to get very rich rather than paying taxes.

In general people will not offer you something that benefits you more than them.
They will not give you top dollar for your property to start with.
If you knew that you were dying in 6 months, maybe a good deal so that you could have some cash before you can't take it with you.
Long term, there are too many ways that you could suffer. There are many clauses where they can take possession of the property.

gsfish said:

Would Tom Selleck steer you wrong?... actually, when I see out of work actors hawking any kind of product I get very cautious.

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reason #3492 not to have cable. I didn't need to know that poor Magnum was doing this!

Lefty said:

2011 F-150

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You might need less money than you think if you consider an older 2500-series tow vehicle for your cargo trailer. It could be just as reliable (or even more so) than a newer truck. And certainly cheaper.

Lefty said:

Anybody have thoughts or advice on reverse mortgages?
65 y/o single male with no debt, no heirs, own home out-right.
...Would like to get a reverse mortgage to buy a newer model but used GMC or Chevy truck. Right now I have a 2011 F-150 with 120k miles on it but want something newer that's more capable of towing the 7x16 cargo trailer I'd like to get eventually that hopefully would be trouble free for a good while.

Thanks in advance.
MTA

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No. That's the short answer. There is no free lunch with reverse mortgages.
I just sold my house for way more than I expected and you can too.
Sell it, and buy a smaller/cheaper house somewhere warm and travel.

Sofisintown said:

Sell it, and buy a smaller/cheaper house somewhere warm and travel.

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Try not to live where it gets colder than your age. 60 years old, 60 degrees F. 70 years old, 70 degrees F.
Cold doesn't bother the young. They strap stuff to their feet and look for a hill.

Used to work for a reverse mortgage company.
I pre-qualified people before they spoke with one of our licensed loan agents.
Did well at that job because I grew up in the Deep South, so I am accustomed to being deferential when speaking to older people. And I could do a passable Bill Clinton, who was president when I had that job. People loved that accent.
It was a vicious predatory business. We sought out retired people who owned their homes as clientele. My job was to politely clarify what their health situation was. We didn't want to do a reverse mortgage with someone who had heart disease or cancer. We wanted a healthy person who would live long enough to sell us their entire home one month at a time, at a terrible rate. If they passed away too soon the heirs would step in and cancel the agreement, leaving us with nothing.
Reverse mortgages will never pay you what the property is worth.
It's better to do an outright sale and just get away from the property entirely.

Personal opinion, reverse mortgage is as bad as car title loans. I would like to see those legal loan sharks gone.
I hope to rent out my house when I go on the road. I bought during the slump and current rent cost are higher than my payments. I will use a management company and hope there will be enough to cover those cost plus a little extra.
Currently checking with my employer to see if they would be agreeable to seasonal employment since I plan to return to AZ in winter so I can spend time with my children.
I will still own my house when the time comes that I cannot drive anymore and by then I might have great grandchildren to watch grow.
Keep your house, fix it up and use it for income and a possible place to land if ever needed.

Lefty said:

Anybody have thoughts or advice on reverse mortgages?


As it is I make enough from Social Security and a small pension to live comfortably but frugally.
Don't want to totally give up the security of owning my house even if it is somewhat neglected.

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Lefty said:

Since no one to leave anything to I'm thinking a reverse mortgage might be perfect for someone like me who doesn't want to fully divest from owning my house but allows me to access my equity.


Thanks in advance.
MTA

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my older friend checked into and said NO WAY AT ALL!
but 'she has a beneficiary', her son and she wanted to leave him that home as inheritance to him.

You have NO ONE to benefactor to that home-----the big but here---you want it for future security??

I would truly say GO TO AN EXPERT' on this one. IT MIGHT truly fit your situation. But in the end, if you have no one to leave the home to it actually 'might be for that 'subset' of person' who needs that money for 'now life' and ya don't care one bit what happens to that home after and any of 'your estate' would be fair game to the reverse mortgage lender etc to attack......but if you are gone and don't care?

Best advice....massive research on this one

Back in the 2000s, becoming a landlord allowed me to stop working at a W-2 job a decade after my first job. I was not rich, I had an income stream that was sufficient to live on (~$30k) that wasn't dependent on hours worked. So here's my admittedly biased advice.

I think it's wise to retain ownership of your house. It's a good physical and financial safety net. While land doesn't depreciate, houses do deteriorate. Vacant houses deteriorate faster. And houses with existing deferred maintenance deteriorate even faster. This should be addressed as quickly as possible. Do it yourself or hire someone to do it. Take out a Home Equity Line of Credit (HELOC)* if necessary.

Rent out the house. Unless your house is in a desirable neighborhood in tourist destination, avoid short term, Airbnb stuff, it's too management intensive. There is good money made on regular, yearly leases. Hire out property management. Look for someone who will take their fee based on net (not gross) rent. Ideally, you want to avoid a traditional property management companies, they aren't good at minimizing maintenance expenses or selecting the best tenants. Try to find an ambitious young person who is interested in real estate investing or someone who is handy and wants to earn side income. Attend a few local real estate investment club meetings and ask around. If your house is in Chicago, Atlanta, or South Florida, send me a PM.

Use the income from the rental to pay your HELOC (if you took one out), your ongoing property expenses, and then yourself. You now have an income stream in addition to your social security. You can use it to pay off a vehicle note if you want.

Years ago, I wanted to buy a plane. I had saved $30k for this purpose. Instead of buying the plane outright, I used the money as a downpayment to buy a house. I used the rent from the house to make the monthly payments on the note for the plane. After it was paid off, the rent went to increasing my disposable income.

* The HELOC works like a credit card (with a high credit limit and a low interest rate). It is line of credit (using your home as collateral) that is available for you to access at will. Payments are based only on the proceeds that are withdrawn. Let's say your house is worth $80k and you get a HELOC from the bank of $40k at 8% interest. As the money sits in the account, no payments are due. If you remove $2k from the account (leaving you with $38k remaining available), the required interest only payment of $13 will be due the following month. Of course you can pay more, which is applied to reducing the outstanding principal. HELOCs have a predefined time period (called the draw period) of 5-20 years to use the funds, withdrawing and depositing at will. When it converts to the repayment period, the outstanding balance will convert into a 10-20 year, amortizing loan with a fixed monthly payment.

One thing to consider is that with a reverse mortgage, you can choose to receive the funds in different ways. You can opt for a lump sum payment, a line of credit, or monthly payments. This flexibility allows you to tailor the arrangement to your specific needs.

GoToxic said:

One thing to consider is that with a reverse mortgage, you can choose to receive the funds in different ways. You can opt for a lump sum payment, a line of credit, or monthly payments. This flexibility allows you to tailor the arrangement to your specific needs.

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If you get a home equity line of credit you can choose to use as much or as little as you want. It's much more flexible than a reverse mortgage.

An advantage to a reverse mortgage is the fact that the homeowner can live in the house way past when the loan is due and never worry about foreclosure or debt collections. (the loan is paid off, or the home is foreclosed on, after the borrower has passed)

Not saying it's a good idea, but that is one of the 'perks'.

VPN - is Texas but it does seem as if they are India since they put that as their location. Watch their posts, as they could come back and edit in a link for advertising.
I want to spam ban, but cannot quite justify it - yet.

Many banks are not offering HELOC anymore due to market conditions. It sounds like if an 80K house would only get 40K with a reverse mortgage, it would be better to
just sell at less than the home value. But many want the security of a place to go home to.