Eli5: What is a reverse mortgage?
In: 308
[removed]
[removed]
I see a reverse mortgage as slowly giving your house away.
Another question is, can you undo a reverse mortgage? Meaning, buy back the the amount you gave away so you can own 100% again. And if you can, you now probably have a mortgage again as an elderly person.
The whole idea of a reverse mortgage sounds unscrupulous.
The bank gives you money from the equity in your house.
When you die, the bank either gets the money back from your estate or, if there’s not enough without the house, they get and then sell the house.
Did you just see The State?
Reverse mortgages are a bad idea and should only be used as a last resort.
They can use some crazy eviction strategies that are within the limits of the contract. You just never know when that reputable company will sell your mortgage to some less scrupulous organization and now you are at their mercy.
Grandma and grandpa got tricked by some bad guys while watching Matlock reruns and now daddy isn’t talking to them.
Your name is Hank. You are 75 years old. Your only child died in a horrible blender accident. You’re estranged from all your other family and have no one you would want to give your belongings too.
You get a social security check every month and some of your pension. And it covers all your bills. Nothing more. Just the bills. You’re doing ok, it’s not a glorious life but you’re living well.
A nice man from the bank offers to buy your house. You tell him you’re not interested in moving. Here’s the best part! You don’t have to. They decide to pay you 5000$ a month, and in exchange, when you die (remember you’re 75) they get the house! They own it! But until then it’s still your house. Now you have social security and your pension and a 5000$ check from the bank. A check you will recieve every day until you die. Garuantee d. Now you can live life VERY comfortably, maybe go on a cruise or buy a fancy car.
That’s a reverse mortgage. You sign the house over to the bank. In exchange the previous home owner gets a hefty monthly check, and to live in the home until they die. If you have no heirs it’s a phenomenal deal.
Pretty much same as normal mortgage but bank will take ur property and sell it and pay off whatever u borrow. Its always higher interest than normal mortgages. Only do this if u ran outta options
They charge you interest to buy your house. My mom got one and the interest rate has ballooned to 10%. I have no idea how to help her get out from underneath at this point.
Latest Answers