Seeking advice and unbiased information about reverse mortgages. Your personal advice, pros, cons, good, bad, and your experience or that of others you know who may have done it. Thank you all for your time and assistance
My wife was caring for a elderly lady who had several different medical problems, the time came where she had to be placed in a Care Home ... The home she had lived in had a Reverse Mortgage applied by her son who was her care taker until he died with Cancer (suddenly) so it all came back to my wife and I ... He had taken a lump sum of $30,000 when they set it up supposedly for up dating and remodeling the home, which never got done ( he pissed it away ) ... My wife being her care taker and Power of Attorney had to search and get all of the information from the bank who ended up holding the Mortgage of the balance so we could sell the house and pay it off ... The bank took several months to respond with what she needed to move ahead with the sale of the house (interest kept getting added @ the rate of $375.00 per month ) until they got off of their ass and gave us the answers we needed ... We listed the house at a fair market value for the area, once all was said and done there was almost $10,000 , left over once everyone else got paid ... The State is paying part of her monthly rent and they take her Social Security with the exception of $100 each month, so they demanded the overage on the money so she essentially has nothing but a place to stay, eat and live until she dies ... I have been told many times over the Reverse Mortgage is a catch 22 for people in the long run it does not really present the pretty pictures they paint you when they talk to you about it ... If you "Google" it you can read some of the horror stories and make up your own mind ... WPT ... (YAC) ...
A retired friend of mine did a reverse mortgage some years ago. Soon after he retired he passed away with advance diabetes problems. His widow being much younger somehow now was required to immediately repay the loan balance . They foreclosed on her and she lost the house.
Worked for a specialist after I retired for a short time, felt guilty even being a part of this scheme, unless you are desperate forget it, just makes the originator rich.
The cost upfront is terrible. $5000.00+ to the government to make up for forclosed loses 2.5% commission. A 150,000 reverse mortgage could easy cost $12-15,000 in upfront cost to you the borrower. However, if you got really old and didn't have anyone to leave your property to, you might as well take the cash out and travel around the world...LOL It costs the same and you get the same care in a nursing home whether you pay for it or Medicaid pays for it. I just went through that with my Mother-in-law. She was paying $4800 a month to stay there, and her roommate was paying nothing because she didn't have anything. State Medicaid paid her bill.
