How does a reverse mortgage work?
I have healthcare for life due to my 37 years as a public school teacher.
Should I use a reverse mortgage? How do they work exactly?
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M$3 Answers
When you die or sell the home
~quote
When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs.
~endquote
Just go for it. You will be able to work out a payment plan with the lender to keep you in the black and living out your retirement in the manner you wish. As in all financial scenarios you should contact a professional for advice and planning.
Click here for a basic model on the information you provided
It looks like a monthly payment of $932.00 is possible and likely given the info you have shown. If this seems like an amount you can live with than I would recommend getting started right away.
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M$
The basics are it a loan based on the partial equity you have in your house. It does not need to be repaid, unless your house is no longer your primary residence or you are no longer fit. You can have it paid out as needed like a line of credit, equal monthly payments, or combination.
If you are looking for any type of loans remember: loans are giving to those that don't need it, if you do need it they are hard to get or it is really expensive.
AARP calculator
http://rmc.ibisreverse.com//rmc_pages/rmc_aarp/aarp_index.aspx
Site from HUD
http://www.nls.gov/offices/hsg/sfh/hecm/rmtopten.cfm
From additional government sources.
http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea13.shtm
From Salespeople
https://www.wellsfargo.com/jump/mortgage/reverse.jhtml?dm=DMIGOREVB1
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M$
So if, for example, you were to take out a $100,000 mortgage, amortized over an estimated term (say 10 years) you would theoretically get back perhaps $1060/month. HOWEVER, you would have to pay a boatload of origination fees on that money (perhaps $15,000) AND you would have to continue paying your property and insurance costs (and you insurance costs would likely have to be above a floor set by your lender). The big advantage is that you would get the money tax free.
It's an attractive product, but it really isn't for everyone. You ought to talk to two people BEFORE you sign anything: First, your estate planning attorney. Second, a real estate attorney who can help you understand the risks involved (for example if there is a lien of some sort on the property). As a general rule, whenever you are dealing with a property transaction, call your real estate lawyer before you call any kind of broker or salesperson.
For your information. Not legal advice.
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M$
great answer
Hi Michael, sorry there is no way we can reverse votes, yet.
I agree, and I accidentally clicked the uninteresting button. Can someone at Mahalo please reverse that?