Word Wednesday: Reverse Mortgage

I often have heard the negative about reverse mortgages, never a positive until today Carol Williams, thank you!

 Make this an extra special day...

A reverse mortgage can improve the quality of life for some seniors. If you have seen seniors walk away from the pharmacy without their prescriptions because of the lack of funds, you can understand that many are struggling.

HI Carol Williams - I will be looking forward to seeing your future posts.  I hope Janice takes you up on that offer.  I have had a few listings with reverse mortgages and had many challenges to deal with. 

From my personal experience of helping sellers, I am not a fan. But I know that this is a financial tool that may benefit a certain consumer with certain needs.

I hope that she will indeed take you up on that and write some posts about it, I would like to learn more about reverse mortgages too!  I will look for a CE class that discusses the topic.

Good morning Carol. I hope that Janice takes you up on your offer. I would enjoy learning more.

Carol, I did the same with a local lender a couple of years back.  While they're not the right loan tool for everyone, they do have some upside in the right circumstances (especially if one isn't worried about leaving a large asset for heirs).  There's potential to use a HECM loan to basically double a buyer's buying power.  I've not had a client opt that route yet, although I know some local builders make use of them. Bill

Hello Carol, I know of three lenders that are featuring them all the time at our local board.  More people should look into them.

HI Carol  - the 'girls' got together the other night for HH and this is one of the subjects we discussed. I've always been a bit skeptical of reverse mortgages but apparently there are sound reasons to consider it. I also look forward to reading a series of posts on reverse mortgages. And starting with how they can be used for wealth building is intriquing to me.

BTW the gals say hi

Hi Carol- I know very little about them but I've always been skeptical of them, and not for a particular reason. I too hope that Janice will write some posts for us here and share her knowledge. 

Carol, I'm interested! Similar to 1031 exchanges, only in that they keep changing and are misunderstood. I have come upon reverse mortgages occasionally in my past work, but the buyers of our very expensive home had (have) gobs of money and did a "reverse mortgage for purchase". They just sold it for about $200K more than they paid, 4ish years ago. The husband has made lots of money in his businesses and he knows money so I'm sure he chose to do this to "keep" his money and maybe not pay capital gains tax. Who knows? Let's hope that your friend, Janice can clear up some of those mysteries. I had never heard of a reverse mortgage for purchase (and oddly enough, the first company this couple went with, it didn't fly and we had already moved out and they had already moved in! Talk about some stressful moments!!) 

My personal feeling about reverse mortgages is they are expensive and often seniors are hoodwinked into taking them out without truly understanding how they work. I don't like the people who sell them, either, because so many take advantage of people in distress, and the whole thing doesn't sit well with me.

On the other hand, I have a few friends who have benefited from a reverse mortgage because they had no other option. A friend in Hawaii used a reverse mortgage to buy her house because it preserved cash and she has no heirs.  But those are few in the overall scheme of things.