February 14, 2008
– Comments (8)
Does anyone know what is up with the reverse morages? I am seeing more and more comercials about this and it just seems to me like a new bank scam?
The mortgage "brokers" are following the money, trying to fid anyway to make a penny.
Reverse mortgage should read like this:" Did you work hard all your life and pay down your home? Well now is a chance to let us take up your equity little by little and run up a bill when you die. YES!!! Leave nothing to anyone and let us suck up your last bation of an asset you may have."
Some older people have huge medical bills, but are without a good income. To pay back the bills and get a "free" loan, in other words they don't pay it back until they die, they borrow money from the equity in the house. It is just a way to help some of them keep up and not starve to death.
It would suck to have a house worth a bit of money, but not be able to sell it to get to the money(our market that builders built). Don't just blame the banks. Especially if you are too old to work and rely on Social Security checks.
I'm with Monkey. 'Reverse' mortgages are nothing new, they used to be called '2nd' mortgages. They're a good option for people who are going to die soon and don't mind stiffing their kids of an inheritence (which should be everyone, right?). Don't take out a reverse mortgage to buy stocks or gamble, etc.
Just got done talking with my mortgage broker and he said that reverse mortgages are catching on, because there is a decent percentage of the housing population that is over 62, retired, and owns the home. Only a small percentage have been tapped for the reverse and the loan can only go to a certain % amount of what the house is worth.
There will still be some equity in your home after you die to take care of "ground maintenance"
Do the banks pay the taxes or does the homeowner.
As far as the taxes are concerned, my understanding is that it's a one-for-one trade: your home equity for the bank' cash money. No one has any 'income' on the deal, at least not until you 'buy the farm'. Thus, no taxes (at least not for the home 'owner').
Go to www.fool.com, and enter "reverse mortgage" in the search. You'll see there are plenty of articles already posted on the Fool website. These kinda articles are usually pretty informative and never dull.
thank you all so much for the info