Should a 72y/o widow w/no other assets sell home pay off reverse mortgage take remaining equity and rent apt?
Redbird asked:
Home is paid off except for reverse mortgage. Home’s market value is more than enough to pay off reverse mortgage and have more than adequate income for life expectancy.
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on Monday, January 12th, 2009 at 11:16 pm and is filed under Reverse Mortgages.
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Home is paid off except for reverse mortgage. Home’s market value is more than enough to pay off reverse mortgage and have more than adequate income for life expectancy.
January 13th, 2009 at 1:02 am
If she doesn’t do that, every bit of equity in her house will belong to the bank when she dies so she won’t be able to leave any money to anyone in her family. Of course, I don’t really like reverse mortgages. The only reason banks do them is because in the end it benefits them so much. However, she also may live longer than expected and run into financial problems later.
January 13th, 2009 at 10:00 pm
it would free you of taking care of house
not everyone should be a homeowner through all of life
January 16th, 2009 at 11:56 am
Why? Is she having trouble getting around? Does she want to stay in her home until she passes? A reverse mortgage is usually setup to give her income through the end of her life and when someone sets this up they usually have considered the impact on their estate. I suspect that her husband helped with decision and you may have an extremely hard time convincing her that moving to an apartment is a good idea when her loved on (who is no longer here to advise her) thought this would be the best protection that he could give her. Reverse mortgages are not a bad thing at her age only if you do it in your 30′s should you really consider the life impact. Find a way to let her be happy in her final days, let her finish her life feeling like she still has some control and value (to be respected!) Good luck honey-just walk carefully one this one.
January 18th, 2009 at 5:12 am
No, that’s a bad idea.
Once she ends the reverse mortgage, and gets rid of the house, and goes through her savings (and she could very well live that long), then she could easily be cash strapped.
Why create a monthly payment when she doesn’t need to?
Reverse mortgages are also a risk for the lender…the payments must continue and the house is sold AFTER she dies.
I think to do what you described would be a huge mistake and it sounds like someone is trying to talk her into making a bad financial decision. You can live on an extremely small income if you don’t have to pay for a place to live.
January 21st, 2009 at 7:50 am
Reverse mortgages aren’t bad for the right people and it sounds like she might be a good candidate. Just to sell it for the sake of paying off the mortgage solely doesn’t make sense to me unless she needs to move into hospic care of something.
Is there is a lot of debt she needs to pay and would benefit from a cash out? If she is happy there, and the terms are good…let her stay.