DISQUS

SavingDiva · 2 years ago

I think a reverse mortgage is a worse case scenerio. No one should plan on doing it...I think it's much smarter to save for retirement now.

FourPillars · 2 years ago

I don't think reverse mortgages are a horrible deal but I don't understand why your parents don't just sell the house? What is their logic for keeping it? The whole point of a rm is to be able to stay in the same house even if you can't really afford it.
They should sell it, invest the $$ and just rent an apartment if they need to have their own place to call home.

Mike

bripblap · 2 years ago

I guess my parents' argument for keeping it would be that they still use it several times per year. It doesn't cost anything to maintain (practically) and since they are actually living in an apartment in my brother's house, they don't need the cash immediately for a down payment.

It's actually a very pleasant problem to have, really - not to have to worry about selling your house. Here in the New York area property taxes alone would force you to a decision extremely quickly.

dong · 2 years ago

I don't think reverse mortgages are a terrible idea for certain people. I would actually encourage my parents to look into if they were set in being exactly where they wanted to be. Obviously you want to save for retirement, but even if you have reverse mortgage can be a good idea to juice up how you're living without effecting your circumstances too much. For example I have no desire to inherit anything from my parents, I would like to extract everything out there assets while there living so they can enjoy life.

bripblap · 2 years ago

Actually one other important piece of information, specific to my parents, is that my dad - by virtue of working as a professor at a state university for his entire career - has a pension that easily covers their expenses. This is very different from my situation, for example, because even once I retire I won't have a pension so I'll be seeking any way possible to maximize my cash flow at a minimum cost to my saved capital at that point. So the reverse mortgage would be extra income but not necessary income.

Their situation often makes me really irritated about the times I was born in - having a defined benefit pension removes a LOT of worries about the future, particularly if your employer is a state (not a company) so you don't have to worry too much about them being unable to meet your payments. Unless your employer was New Jersey....

bubelah · 2 years ago

One fact is overlooked about "the Parents" is that they love their house and it is a not a financial drain for them. So, why everything in this life has to be measured as "financial" loss or gain or good or bad investments, sound financial decisions, etc.?
I only wish they had the house in some apealing location, somewhere on the beach, somewhere in Florida or Bahamas ;o) Ahhhhhhh (that's just me, I love warm weather, sand beaches and blue water - the ultimate getaway for me).

reverse mortgage · 9 months ago

Sounds complicated As the financial mess grows, more and more seniors are more and more desperate to find ways, not just to keep their property, but to survive. It is imperative that whoever advises them has altruistic motives.