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Old 12-07-04, 02:30 PM   #1
DnvrFox
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Who has knowledge and experience with reverse mortgages, especially HEMC? Minimum qualifying age is 62yo.

I am sitting on $325,000 of paid off house equity, and would like to use some of that money to make retirement a bit better. A reverse mortgage seems ideal.

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Old 12-07-04, 03:09 PM   #2
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I have been trying to get my father-in-law to go for one. I even offered to play bank and give him a monthly stipend in exchange for a gradually increasing interest in his house. (He is cash-poor and house-rich, i.e., a perfect candidate for a reverse mortgage, but he is too stubbornly Scotts-Irish to cash in his equity. I do understand the psychology, but don't know what to do about it.)
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Old 12-07-04, 03:13 PM   #3
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I have been trying to get my father-in-law to go for one. I even offered to play bank and give him a monthly stipend in exchange for a gradually increasing interest in his house. (He is cash-poor and house-rich, i.e., a perfect candidate for a reverse mortgage, but he is too stubbornly Scotts-Irish to cash in his equity. I do understand the psychology, but don't know what to do about it.)
Under the terms of a reverse mortgage, you still retain a large equity. The most I could get would be about $140,000, either lump sum or even installments, leaving $185,000 - and of course, the house will appreciate - likely by that much over ten years or so. And with even installments, you get 4.7% interest on the unused amount.
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Old 12-07-04, 03:43 PM   #4
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Originally Posted by DnvrFox
Under the terms of a reverse mortgage, you still retain a large equity. The most I could get would be about $140,000, either lump sum or even installments, leaving $185,000 - and of course, the house will appreciate - likely by that much over ten years or so. And with even installments, you get 4.7% interest on the unused amount.
Why on earth is this in the 50 plus section? I'm 40 and only have a year to go on my mortgage.
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Old 12-07-04, 03:51 PM   #5
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Why on earth is this in the 50 plus section? I'm 40 and only have a year to go on my mortgage.
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It will likely be moved. Congratulations on your mortgage payoff shortly! That is great planning.

I felt that 50+rs would most likely be in the same situation as I am, as you have to be at least 62 to qualify for a reverse mortgage. You are only 40, and it would not apply to the forum generally.
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Old 12-07-04, 03:53 PM   #6
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It will likely be moved. Congratulations on your mortgage payoff shortly! That is great planning.

My plan is to be able to retire early and bike for ten extra years (compared to retiring at 60)

....can't wait!!
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Old 12-07-04, 06:43 PM   #7
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Reverse mortages are great as long as you are not planning on giving your house to your kids. Count me in the group that says let the kids pay for their own house (same goes for cars, vacations, weddings and all the other stuff parents often get stuck for).
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Old 04-09-05, 03:55 PM   #8
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We went ahead and did the reverse mortgage. This will give us about $1,000 (paying the interest) or $1,500 (not paying the interest and letting the home equity and inflated value pay the interest) more a month to spend on BICYCLING!). We are planning on paying the interest so as to not lose any equity

Essentially, for us, we are going to use the reverse mortgage as a balloon loan with payoff deferred until death or sale of the home. It will stop our current payments. We could have paid the house off, but now we have an extra big bundle of money to invest. Others can use the reverse mortgage to actually draw down on the house equity. There is a tremendous amount of flexibility in the reverse mortgage program through HECM - and it is all nicely insured by the feds. You can't get upside down.

So, if you are land rich and would like more cash, it is certainly something to consider if you want to bicycle more and work less! You must be 62+ - one of the advantages of getting older, I guess.

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Old 04-09-05, 10:14 PM   #9
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Bravo! Enjoy it DenvrFox. You've given me something to look into awhile down the road.
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