reverse mortgages

[Munch]

@ReticulatingSplines

Huh, wow. I’ll be damned.

I know, right?

12/16 Stink Fish Pot: What’s this Occupy movement I’ve been hearing about?
12/16 The SDMB: It’s a bunch of people in the country who are pissed off at the unequal distribution of wealth who are all up in arms and protesting.

12/20 Stink Fish Pot: Why aren’t people all up in arms and protesting about the unequal distribution of wealth in this country?

Uh…

[crypto]

@Munch

I know, right?

12/16 Stink Fish Pot: What’s this Occupy movement I’ve been hearing about?
12/16 The SDMB: It’s a bunch of people in the country who are pissed off at the unequal distribution of wealth who are all up in arms and protesting.

12/20 Stink Fish Pot: Why aren’t people all up in arms and protesting about the unequal distribution of wealth in this country?

Uh…

Hey, at least I’m trying to learn what I clearly don’t know.

Truth is, I didn’t know reverse mortgages existed before, so for those of you that have replied and have seen family members benefit from having the extra money, I appreciate the POV.

The Occupy Movement (to me) doesn’t seem to have much in the way of leadership, so even though they can get people to “occupy” something or some place, I haven’t heard anywhere or anything that they’ve made a change in. It seems disjointed, like they are people for whatever reason don’t see themselves as tea-baggers, but don’t want to make a LOT of noise either.

OK, I’ll admit it. I’m behind the times. My folks got hit pretty hard in their 401K and they are thinking of a reverse mortgage. Before everyone starts assuming I’ve lost my millions I was depending on, it’s not like that. My folks are in their 70’s and haven’t made very many wise financial decisions. Like buying a home in their 60’s right before retiring. They have a 30 year mortgage, so I can’t imagine they have a lot of equity built up yet… so I don’t know what kind of monthly check they’d receive.

Anyway, thank you all for your patience and understanding. The holidays tend to stress me out anyway, but having my mother calling me on the phone to tell her what to do when I don’t understand them much myself is a real downer.

SFP - who is embarrassed to have asked these questions, but not enough to say I wouldn’t ask them again. I’ve learned a lot in both threads.

[chizzuk]

My grandfather has a reverse mortgage. He is 87 and has been retired for many years, so he was out of the market and didn’t lose his shirt in the recession. But his wife has fallen on ill health and now he needs more money than he thought he would. He is using the cash to pay for her nursing home and the assisted living apartment he’s going to move into. The house is too much for him to take care of at this point, so being able to get funds out of it is just what he needs. My dad doesn’t particularly care that he’s not going to inherit it: he’s already got a house, doesn’t need another one far away to deal with, and is glad that his father can get these funds because if he couldn’t then my dad would be having to help pay for the nursing facility, thus largely negating the value of any inheritance. I think it makes a lot of sense.

[USCDiver]

For an amusing anecdote regarding reverse mortgages, see the case of Jeanne Calment (aka The Oldest Person Ever). From here:

In 1965 at age 90, with no heirs, Calment signed a deal to sell her former apartment to lawyer Andre-Francois Raffray on a contingency contract. Raffray, who was 47 at the time, agreed to pay her a sum of 2500 francs every month until she died. This is often referred to as a reverse mortgage. Raffray ended up paying Jeanne Calment the equivalent of US$180,000, which was more than double the apartment’s value. After Raffray’s death at age 77, his widow continued the payments until Calment passed away. This is a story I find rather amusing. He thought he was making a clever deal. What a surprise when she was still kicking for a further 32 years.

[Becky2844]

Here’s what I found out:

Only the partner who is 62 years old or older can be on the reverse mortgage. That means, if “he” dies, the wife is out on her butt unless she can come up with the money to pay off the “loan.”

Same goes for if “he” goes into a nursing home for more than a year.

If both parties are old enough to be on the reservse mortgage, the heirs can choose to pay off the loan or sell the house. Or they can get a completely new loan on it.

We were considering it because the 401K disappeared. And some folks are even trying to call Social Security an entitlement?

[Gary_Robson]

@bengangmo

It’s a way of monetising an asset without having to sell it.

No, it’s not. It’s a way of selling your house.

[kiz]

@Becky2844

Here’s what I found out:

Only the partner who is 62 years old or older can be on the reverse mortgage. That means, if “he” dies, the wife is out on her butt unless she can come up with the money to pay off the “loan.”

Same goes for if “he” goes into a nursing home for more than a year.

If both parties are old enough to be on the reservse mortgage, the heirs can choose to pay off the loan or sell the house. Or they can get a completely new loan on it.

My mother had been considering one until she happened upon the same information. Nope, no way, no how would she take the risk and leave her heir (that’s me) saddled with a debt I could never pay off.