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@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
Is there any good reason to have a reverse mortgage? The only situation I can think of where it sort of makes sense is from a survival standpoint. I'm sure some older people have lost their spouse and may not be able to make payments and still afford to live. It looks really predatory on paper. I'm curious if I am missing something here
A reverse mortgage allows you to access the equity of your home, without having to move. It's usually marketed to older people who aren't working, but need money (and some place to live). Because selling your house for the cash and not having anywhere to live doesn't really work.
This is why retirement communities exist though. You sell your house and move into a much less expensive house.
What do you define as a retirement community? Most senior housing is expensive or subsidzed for low income. Because Retirement communities almost always are assisted living.
In schaumburg, the top rated place is $40k down to get into an apartment that is then $3k-$5k/month.
We have communities here that are just 55+ houses. they are small ranches that are 130k to purchase.
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@wirestyle22 said in Random Thread - Anything Goes:
A lot of peoples wealth is tied up in their home equity. If you willingly give it away you are trading equity in a home that continues to go up in value (lets assume you are in a good area) for currency that gets pounded by inflation. This contract is a snapshot.
No, most older people live in outdated homes. The sale price of their homes will be much lower than retail. Because no one will by a house with 20+ year old decor and appliances for the same price as one recently remodeled.
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@wirestyle22 said in Random Thread - Anything Goes:
We have communities here that are just 55+ houses. they are small ranches that are 130k to purchase.
Is it private property or normal housing? Because if it is normal housing, there is no way to legally make it only available for 55+
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@DustinB3403 said in Random Thread - Anything Goes:
You aren't giving away the equity, you're slowly selling the property while you live there until death or you actually sell it. Whatever you may sell the house for, off the top covers the reverse mortgage to pay that back and then any outstanding debts.
It can make sense, in some cases. Single-non working childless person who is near that age. Wants to live in their house and have helping hands or whatever come over to assist.Anyway, this is what it is. A reverse mortgage, done properly, is a perfect way to stay in your house, and not need to worry about your heirs needing to sell it, etc.
Like anything else, the only problem with this is predatory lendors. Those people exist across the spectrum. But of course they are more prevalent around the low income people that re most likely not to plan ahead, read, or understand if they read, the contracts they are signing.
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@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
A lot of peoples wealth is tied up in their home equity. If you willingly give it away you are trading equity in a home that continues to go up in value (lets assume you are in a good area) for currency that gets pounded by inflation. This contract is a snapshot.
No, most older people live in outdated homes. The sale price of their homes will be much lower than retail. Because no one will by a house with 20+ year old decor and appliances for the same price as one recently remodeled.
It depends. I've seen a lot of areas where this doesn't apply in NJ. It's one of the reasons I decided to build
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@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
We have communities here that are just 55+ houses. they are small ranches that are 130k to purchase.
Is it private property or normal housing? Because if it is normal housing, there is no way to legally make it only available for 55+
Private
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@JaredBusch said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
You aren't giving away the equity, you're slowly selling the property while you live there until death or you actually sell it. Whatever you may sell the house for, off the top covers the reverse mortgage to pay that back and then any outstanding debts.
It can make sense, in some cases. Single-non working childless person who is near that age. Wants to live in their house and have helping hands or whatever come over to assist.Anyway, this is what it is. A reverse mortgage, done properly, is a perfect way to stay in your house, and not need to worry about your heirs needing to sell it, etc.
Like anything else, the only problem with this is predatory lendors. Those people exist across the spectrum. But of course they are more prevalent around the low income people that re most likely not to plan ahead, read, or understand if they read, the contracts they are signing.
That's a good point. I'm just curious what the hassle is worth to each person. I have heard of assets being unable to sell and draining the inheritors
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@wirestyle22 said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
Is there any good reason to have a reverse mortgage? The only situation I can think of where it sort of makes sense is from a survival standpoint. I'm sure some older people have lost their spouse and may not be able to make payments and still afford to live. It looks really predatory on paper. I'm curious if I am missing something here
A reverse mortgage allows you to access the equity of your home, without having to move. It's usually marketed to older people who aren't working, but need money (and some place to live). Because selling your house for the cash and not having anywhere to live doesn't really work.
This is why retirement communities exist though. You sell your house and move into a much less expensive house.
Are they though? People that find themselves in that situation likely don't have 500K homes (well unless you're in CA where a shoebox is $500K)
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@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@PhlipElder said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
Is there any good reason to have a reverse mortgage? The only situation I can think of where it sort of makes sense is from a survival standpoint. I'm sure some older people have lost their spouse and may not be able to make payments and still afford to live. It looks really predatory on paper. I'm curious if I am missing something here
A reverse mortgage allows you to access the equity of your home, without having to move. It's usually marketed to older people who aren't working, but need money (and some place to live). Because selling your house for the cash and not having anywhere to live doesn't really work.
This is why retirement communities exist though. You sell your house and move into a much less expensive house.
It's very traumatizing for folks to move after being in the same home for so long. They raised their kids there, they broke bread together there, they had their highs and lows there, and so on.
Change is hard. It's even harder at that age.
A lot of peoples wealth is tied up in their home equity. If you willingly give it away you are trading equity in a home that continues to go up in value (lets assume you are in a good area) for currency that gets pounded by inflation. This contract is a snapshot.
You aren't giving away the equity, you're slowly selling the property while you live there until death or you actually sell it. Whatever you may sell the house for, off the top covers the reverse mortgage to pay that back and then any outstanding debts.
It can make sense, in some cases. Single-non working childless person who is near that age. Wants to live in their house and have helping hands or whatever come over to assist.
The interest rate is what can kill ya. I'm assuming it's just like a real mortgage, the amount of the money given to you is reduced by the interest, and that interest just goes up up up! so what might start at $1000/m in a few years is only $750/m, etc.
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@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
Is there any good reason to have a reverse mortgage? The only situation I can think of where it sort of makes sense is from a survival standpoint. I'm sure some older people have lost their spouse and may not be able to make payments and still afford to live. It looks really predatory on paper. I'm curious if I am missing something here
A reverse mortgage allows you to access the equity of your home, without having to move. It's usually marketed to older people who aren't working, but need money (and some place to live). Because selling your house for the cash and not having anywhere to live doesn't really work.
This is why retirement communities exist though. You sell your house and move into a much less expensive house.
What do you define as a retirement community? Most senior housing is expensive or subsidzed for low income. Because Retirement communities almost always are assisted living.
In schaumburg, the top rated place is $40k down to get into an apartment that is then $3k-$5k/month.
My mother just moved into a Skilled Nursing facility - $132/day... $46,992/year... this is surprisingly low, I was expecting it to be over $80K/year..
For this she gets a room with a roommate/closet/dresser/3 meals a day/general nursing assistance -
@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
A lot of peoples wealth is tied up in their home equity. If you willingly give it away you are trading equity in a home that continues to go up in value (lets assume you are in a good area) for currency that gets pounded by inflation. This contract is a snapshot.
No, most older people live in outdated homes. The sale price of their homes will be much lower than retail. Because no one will by a house with 20+ year old decor and appliances for the same price as one recently remodeled.
I have no idea what your comment has to do with the quoted bit.
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@JaredBusch said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
You aren't giving away the equity, you're slowly selling the property while you live there until death or you actually sell it. Whatever you may sell the house for, off the top covers the reverse mortgage to pay that back and then any outstanding debts.
It can make sense, in some cases. Single-non working childless person who is near that age. Wants to live in their house and have helping hands or whatever come over to assist.Anyway, this is what it is. A reverse mortgage, done properly, is a perfect way to stay in your house, and not need to worry about your heirs needing to sell it, etc.
Like anything else, the only problem with this is predatory lendors. Those people exist across the spectrum. But of course they are more prevalent around the low income people that re most likely not to plan ahead, read, or understand if they read, the contracts they are signing.
Exactly - what happens when you outlive your reverse mortgage?
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@wirestyle22 said in Random Thread - Anything Goes:
@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
A lot of peoples wealth is tied up in their home equity. If you willingly give it away you are trading equity in a home that continues to go up in value (lets assume you are in a good area) for currency that gets pounded by inflation. This contract is a snapshot.
No, most older people live in outdated homes. The sale price of their homes will be much lower than retail. Because no one will by a house with 20+ year old decor and appliances for the same price as one recently remodeled.
It depends. I've seen a lot of areas where this doesn't apply in NJ. It's one of the reasons I decided to build
Well, if that doesn't apply, that means there is a housing shortage, or the area is HIGHLY desirable.
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@wirestyle22 said in Random Thread - Anything Goes:
@JaredBusch said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
You aren't giving away the equity, you're slowly selling the property while you live there until death or you actually sell it. Whatever you may sell the house for, off the top covers the reverse mortgage to pay that back and then any outstanding debts.
It can make sense, in some cases. Single-non working childless person who is near that age. Wants to live in their house and have helping hands or whatever come over to assist.Anyway, this is what it is. A reverse mortgage, done properly, is a perfect way to stay in your house, and not need to worry about your heirs needing to sell it, etc.
Like anything else, the only problem with this is predatory lendors. Those people exist across the spectrum. But of course they are more prevalent around the low income people that re most likely not to plan ahead, read, or understand if they read, the contracts they are signing.
That's a good point. I'm just curious what the hassle is worth to each person. I have heard of assets being unable to sell and draining the inheritors
you can always forfeit the property to the county or state, then you're off the hook for the taxes - only part I could see that would force a person to be drained...
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@Dashrender said in Random Thread - Anything Goes:
@JaredBusch said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@DustinB3403 said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
Is there any good reason to have a reverse mortgage? The only situation I can think of where it sort of makes sense is from a survival standpoint. I'm sure some older people have lost their spouse and may not be able to make payments and still afford to live. It looks really predatory on paper. I'm curious if I am missing something here
A reverse mortgage allows you to access the equity of your home, without having to move. It's usually marketed to older people who aren't working, but need money (and some place to live). Because selling your house for the cash and not having anywhere to live doesn't really work.
This is why retirement communities exist though. You sell your house and move into a much less expensive house.
What do you define as a retirement community? Most senior housing is expensive or subsidzed for low income. Because Retirement communities almost always are assisted living.
In schaumburg, the top rated place is $40k down to get into an apartment that is then $3k-$5k/month.
My mother just moved into a Skilled Nursing facility - $132/day... $46,992/year... this is surprisingly low, I was expecting it to be over $80K/year..
For this she gets a room with a roommate/closet/dresser/3 meals a day/general nursing assistanceSounds like she's paying to be in prison..
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@RojoLoco Can't wait for 90 year olds to be playing gangster rap
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@wirestyle22 said in Random Thread - Anything Goes:
@RojoLoco Can't wait for 90 year olds to be playing gangster rap
Until last week, we had a drummer who was 62, still playing original metal. Hope I'm doing the same at that age.
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@RojoLoco said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@RojoLoco Can't wait for 90 year olds to be playing gangster rap
Until last week, we had a drummer who was 62, still playing original metal. Hope I'm doing the same at that age.
I used to work in the operating room of a major hospital and one of the general surgeons listened to metal while he was working. Great guy, very talented surgeon.
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@wirestyle22 said in Random Thread - Anything Goes:
@RojoLoco said in Random Thread - Anything Goes:
@wirestyle22 said in Random Thread - Anything Goes:
@RojoLoco Can't wait for 90 year olds to be playing gangster rap
Until last week, we had a drummer who was 62, still playing original metal. Hope I'm doing the same at that age.
I used to work in the operating room of a major hospital and one of the general surgeons listened to metal while he was working. Great guy, very talented surgeon.
People aren't plumbed like cat5. That must've been an awkward transition. Is Ethernet cable latex free?
