# What about reverse mortgages? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [August 11, 2012, 8:56pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216 "2012-08-11T20:56:06Z")\ **Posts on this page:** 8\ **Page:** 2
**Author:** ![FairyChatMom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fairychatmom/32/21906_2.png) [@FairyChatMom](https://boards.straightdope.com/u/FairyChatMom)\ **Post date:** [August 14, 2012, 12:23pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/23 "2012-08-14T12:23:25Z")
My totally unscientific and uneducated opinion is that reverse mortgages are really good for the companies who now own the homes. This is based on the number of TV commercials with celebrity spokespersons who are advocating reverse mortgages. It’s the same reason I’d never go to J.G. Wentworth because I “need cash now” - what’s good for the company is less good for the customer. I figure this opinion should at least rank up there with the barber’s advice. 😉 As I said in my earlier post, friends of mine are in the middle of the process and they believe for them it’s a valid option. I would not do it, based purely on my gut feeling that it’s a bad idea. I don’t think my gut would steer me wrong… I think this is an illustration of free advice being worth exactly what you pay for it. 😃 ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [August 14, 2012, 1:13pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/24 "2012-08-14T13:13:24Z")
> [@Musicat](#): > > Are you talking about a charity receiving a reverse-mortgaged home as a donation? Or a charity providing a reverse mortgage for a homeowner? I’m trying to wrap my mind around what you are talking about. It acts more like a gift annuity if you’re familiar with those. It works as follows: You find an organization that wants your giant mansion, they purchase it from you, you continue to live in it until you croak, and each month, you get a check. The amount of that check is based on the value of your home at the time of sale, and actuarily calculated out to the time the actuaries believe you should die. The longer you live, the more you get. FairyChatMom - the reason reverse mortgages are all over late-night television is because housing costs are rock bottom, and the risk is therefore much lower that the value of the house will have tanked by the time everyone dies off - simply because the value of the house has, most likely, _already_ tanked. All in all, if you don’t have any significant heirs that are lusting after your shanty, or your budget is tight and you need additional income to get you through your retirement years, AND you want to keep living in your house until the cleaning lady finds you dead on the kitchen floor, then a reverse mortgage is a decent deal. Of course, it’s a WAY better deal if you do it when the value of your home is higher, but them’s the breaks. ---
**Author:** ![VinylTurnip](https://avatars.discourse-cdn.com/v4/letter/v/b2d939/32.png) [@VinylTurnip](https://boards.straightdope.com/u/VinylTurnip)\ **Post date:** [August 14, 2012, 1:34pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/25 "2012-08-14T13:34:23Z")
> [@Chessic\_Sense](#): > > I don’t understand what’s happening in this thread. You’re answering your own questions? And why does he keep calling himself “Mr. Durden”? ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [August 14, 2012, 1:50pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/26 "2012-08-14T13:50:15Z")
> [@Musicat](#): > > Exactly, Sir! 🙂 You do realize you have to qualify, right? ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [August 14, 2012, 2:55pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/27 "2012-08-14T14:55:41Z")
> [@Derleth](#): > > You do realize you have to qualify, right? I do, 120%. In my case, I qualify better for a reverse mortgage than some conventional ones. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [August 14, 2012, 3:07pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/28 "2012-08-14T15:07:57Z")
> [@ZipperJJ](#): > > Doper **Athena** has good things to say about the reverse mortgage her mother got, IIRC. Or her mother-in-law. PM her if she doesn’t show up on her own. Here’s the 2011 thread where **Athena** describes her family’s experience: > **[reverse mortgages](https://boards.straightdope.com/sdmb/showthread.php?t=635579)** > > Let me see if I get this straight… (very high level summary) The investment banks in this country made very poor investment decisions, including but not limited to giving mortgages to anyone with a pulse that couldn’t afford the house or the... ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [August 15, 2012, 1:22am UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/29 "2012-08-15T01:22:31Z")
> [@Derleth](#): > > You do realize you have to qualify, right? Would a pre-qualification letter do for now? Because I have one. ---
**Author:** ![Athena](https://avatars.discourse-cdn.com/v4/letter/a/35a633/32.png) [@Athena](https://boards.straightdope.com/u/Athena)\ **Post date:** [August 16, 2012, 6:23pm UTC](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216/30 "2012-08-16T18:23:21Z")
Sorry I haven’t responded to this thread - I was out of town. But my post in the thread **Musicat** linked is still valid. As with any financial transaction, the specifics will vary, and I’m sure there are people out there selling not-so-great reverse mortgages. But my Gram’s worked out the way I describe, with no “gotchas” after she died or anything like that. The house sold, there was a little bit left over that her children divided up, and everyone was happy. Most of the stuff I read against reverse mortgages either state things that aren’t the case (at least in my parent’s situation) like once the bank pays the entire worth of the home, they quit paying or sell the house or something, or they look at a reverse mortgage as an investment, which it’s absolutely not. Assuming you do your homework and read the fine print and all that, I don’t see an issue with it. You get extra money to spend when you’re retired yet still healthy enough to enjoy spending money and you’ll never get kicked out of your house. I don’t see the downside, other than you do pay a bit up front to set it up. [Previous page](https://boards.straightdope.com/t/what-about-reverse-mortgages/631216.md?page=1)