Reverse Mortgage

[TR25]

Anyone have one? Any experience with them?

I'm a retired widower, no kids, siblings are all OK and their spawn are either also OK or lazy adults who don't have much interest in working. I have a fair amount of equity in the house I'm living in at present with a token loan payment on a small mortgage. I don't need any additional income for living.

The 'problem' comes in is what will become of all of that cash in my house once I get hit by the proverbial bus? Wife and I worked too hard for too long, sacrificed much to wind up in this good position. With no one needing or deserving of cash, the only alternative I see is to get a reverse mortgage. And the type I'd be looking at would be monthly payments, sort of like an 'annuity'.

The reasoning for the monthlies rather than the lump sum would be due to the interest rate I'll be charged. I'd rather have my debt growing, interest wise, indexed to a gradual increase in principle over the period versus the interest portion indexed to a lump sum at the start of the term. The interest load is much higher, longer with the latter.

Or I could just sell the house and live FT in an RV and/or rent, the latter I'm not too fond of.

So, anyone have any input? Experiences?

 

[Underboss]

My friend got one. He figured he would live to 75. He got it at 65 and died at 68. He had zero complaints about the process or the money

 

[Phillbo]

Bad idea unless you need the income stream. Even then they sound and feel shifty... anything being sold by old actors on tv at 2am never sits well with me.

But wait, there's more........... act now and get a gold coin .........

 

[Kevin D Pem]

The clause you should be investigating is the one about requiring you to reside in the house.

Most of the time duration of vacancy is subjective. Meaning a vacation of any meaningful duration,and you could loose your house while still alive.

Consult a lawyer you really trust.

 

[Jim]

Anyone have one? Any experience with them?

I'm a retired widower, no kids, siblings are all OK and their spawn are either also OK or lazy adults who don't have much interest in working. I have a fair amount of equity in the house I'm living in at present with a token loan payment on a small mortgage. I don't need any additional income for living.

The 'problem' comes in is what will become of all of that cash in my house once I get hit by the proverbial bus? Wife and I worked too hard for too long, sacrificed much to wind up in this good position. With no one needing or deserving of cash, the only alternative I see is to get a reverse mortgage. And the type I'd be looking at would be monthly payments, sort of like an 'annuity'.

The reasoning for the monthlies rather than the lump sum would be due to the interest rate I'll be charged. I'd rather have my debt growing, interest wise, indexed to a gradual increase in principle over the period versus the interest portion indexed to a lump sum at the start of the term. The interest load is much higher, longer with the latter.

Or I could just sell the house and live FT in an RV and/or rent, the latter I'm not too fond of.

So, anyone have any input? Experiences?

Didn't even know how they work until I just googled it. If it were me, I'd sell the house and spend the money on what I guess could be referred to as your "last hurrah". The trick is to gauge the spending with the estimate of life expectancy, and hope that you don't run out of money.

If you own the home, have no one to leave it it to, then I can't think of any reason to keep it. You earned it, so spend the money, enjoy your life.

I can help if you want.

 

[JBright11]

I will be using a HECM as a hedge against sequence of return risks when I retire.
There are valid uses for a reverse mortgage if managed properly, eyes wide open, and the circumstances lend themselves to it.

 

[TR25]

Bad idea unless you need the income stream. Even then they sound and feel shifty... anything being sold by old actors on tv at 2am never sits well with me.

But wait, there's more........... act now and get a gold coin .........

I just started to look into them and it seems there are govt connected ones and private ones. Private ones can be like private anything....a contract between parties. Govt involvement 'should' keep the shysters/snakes out.....I think.

Govt got involved in that IMO due to all that money sitting there and not in circulation. There are a lot of boomers who are sort of stuck in their house with a lot of equity. If they get another house, it'll be a lot more expensive, probably crappy/cheap work/materials, and higher interest rate. So for us, selling it doesn't make any economic sense. So we sit on it and keep all that money out of circulation, not even investing it.

 

[TR25]

The clause you should be investigating is the one about requiring you to reside in the house.

Most of the time duration of vacancy is subjective. Meaning a vacation of any meaningful duration,and you could loose your house while still alive.

Consult a lawyer you really trust.

Dang, I didn't know about the residency time requirement. I'll be travelling about half the year, at least as I have been using this house as a base of operation.
Gonna have to look into that.

 

[TR25]

I can help if you want.

lol, get in line. There's a young woman that seems to be interested in me...and I have NO idea why other than I'm a nice person. I needed to get up to speed on this 'widower' status after one of my relatives said I'd have a big target on my back. I told her I've changed, but she filled me in on the older women looking for security. Then I did the yootoob thing and found a whole lot of information out there on that, older single men and widowers as targets for the calculating females. Opened my eyes.

 

[TR25]

I will be using a HECM as a hedge against sequence of return risks when I retire.
There are valid uses for a reverse mortgage if managed properly, eyes wide open, and the circumstances lend themselves to it.

Yeah, I see it as a tool, as with any financial instrument. Financially I'm OK until I die whenever that will be, so I don't need any additional income in the meantime. It truly is me wanting to do something with that money instead of leaving it there for others who aren't exactly worthy of it. Be different if they had jobs......

 

[JBright11]

Yes, you must maintain the house as your "full time residence".
We plan to travel for 2-3 months at a time, return, wash/risne/repeat. No change in residency, will have arrangements to care for the house, pay utilities, etc. This will satisfy those requirements in my state.

When I need / want to, the equity in my home will be available to me....if not, that's cool too.
When I choose to sell, well, that's what I'll do with knowledge of the impact of any draws I may have taken.
I too am interested in having that equity available for other uses, one being a buffer for down markets.
We have no heirs and intend to enjoy every bit of what we have earned.

Reverse mortgages have use, both as a last resort and as a strategic tool.