What are the negative consequences of reverse mortgage on my house?
b.welte@sbcglobal.net asked:
It sounds like a good solution to our problem of not enough money to enjoy retirement. The salesman assures us we can never have to pay more than the house is worth.
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It sounds like a good solution to our problem of not enough money to enjoy retirement. The salesman assures us we can never have to pay more than the house is worth.
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April 4th, 2010 at 12:21 am
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The only negative I can see is that your children will not get rich by selling your home. I would carefully estimate my life span for payments based on factual medical information and not on my wants….!!
April 6th, 2010 at 8:27 pm
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thats a bunch of BS… you have to pay extra in fees and interests… doesn’t help you in the long run
April 7th, 2010 at 1:42 am
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You are selling your future to the bank. The bank will earn all of your future equity that would have been yours.
Reverse mortgages are great if you plan on dying while you still live there.
April 9th, 2010 at 7:56 am
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Here’s a great article that can help you:
Reverse mortgages can be confusing. Never sign anything, especially if it seems too good to be true.
Here’s another place to look for more info on the topic:
Good luck!
April 11th, 2010 at 1:05 am
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The banks DO NOT earn all your future equity!!! Sale of your home after your death will provide the funds necessary to pay off the reverse mortgage, but any equity over and above the reverse mortgage will go to your heirs.
The biggest disadvantage are the fees that must be paid to take out the reverse mortgage. Although you don’t front the fees, they ARE included in the reverse mortgage and, therefore, reduce the ultimate amount of equity in the home.
Assuming you don’t take a fixed amount of cash from the reverse mortgage up front, the reverse mortgages provides a guaranteed stream of cash for your lifetime (the reverse mortgage increases as you receive the cash – that’s why it’s called a reverse mortgage-the bank gives you money and increases the mortgage, instead of you making payments and reducing the mortgage). If you live a long time after taking out the reverse mortgage, that stream of income might actually cause the reverse mortgage to increase to an amount which exceeds the value of your home at the time of your death — in which case, the bank loses and you win (so to speak).
April 11th, 2010 at 1:33 pm
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The balance of the Reverse Mortgage can never exceed the value of the home. That is the definition of a “no recourse loan”. Reverse Mortgages fall into this category. Keep in mind that the sale of a home is not a free transaction so a cost could be incurred to complete the transaction.
The purpose of a Reverse Mortgage is to help the Seniors who own and live in the home by allowing them to use their equity, without having to sell the home.
Best of luck – ask a lot of questions of your salesperson, ask to talk with his prior clients, look at the Reverse Mortgage information at
You are welcome to contact me as well through the answers link on my profle.