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I don’t know that much about them. If the bank pays you, does the bank pay the upkeep? The taxes, inurance ect?
Is it limited to who can get one? My daughter has PDD and I was thinking at some point, this might be an option for her to stay in her/our home.

3 Thoughts on Is there anyone here that understands reverse mortgages?
  1. Reply
    PooPooLaTrash
    February 12, 2014 at 12:50 pm

    You are responsible for paying the taxes, upkeep and insurance on the home. All a reverse mortgage does is give you a certain amount of money over a specified number of years. If you are still alive and in your home when the loan comes due, you either pay it back or turn your home over to the bank or other financing entity.

    More about reverse mortgages here: http://www.credit.com/life_stages/retirement/Making-Sense-of-Reverse-Mortgages.jsp

    Also, see this: http://www.aarp.org/money/personal/articles/5_questions_to_ask_before_considering_a_reverse_mo.html
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    The other poster’s statement about repayment is not true in all cases. The bank is not just going to give you money with nothing in return. At some point, the piper has to be paid. More here: http://www.bestreversemortgage.com/when-do-you-have-to-pay-back-a-reverse-mortgage/

  2. Reply
    Tom
    February 12, 2014 at 1:15 pm

    A reverse mortgage is a loan against the equity of your home. All owners of the home must be 62 or older and live in the home as their primary residence in order to qualify.

    You are still responsible for paying for taxes and homeowners insurance since you are still the owner of the home. As long as you continue to pay taxes, insurance and maintain the home as your primary residence, there is no repayment requirement. In addition, you can never owe more than your home is worth. In other words, a reverse mortgage is a non-recourse, negative amortizing loan.

    Reverse mortgages are popular with people who are “house rich but cash poor”. More and more people are incorporating these loans into their overall retirement planning. Closing costs for these loans can be high, but if you’re using it for long-term financing, the Total Annualized Loan Cost can be very competitive with other types of loans.

  3. Reply
    BC
    February 12, 2014 at 1:20 pm

    If you are eligible for a reverse mortgage ( all borrowers must be 62 years or older ), you have the option of the bank paying the taxes and insurance, or you can pay them yourself. They would be added to the outstanding loan balance, just like the interest is each month. Your daughter must be 62 or older to obtain a reverse mortgage.

    Many borrowers believe that a reverse mortgage is ‘free’ money, but it is not; at some time, the loan must be paid back, and in most cases, this occurs after the death of the borrower(s). There are other cases in which the loan becomes due, one of them is when the borrower(s) no longer occupy the home as the primary residence, or if the home is vacated for more than 12 months by all borrowers.

    For example, if there are two borrowers on the loan and one of them is permanently confined to a nursing home, the other borrower would remain in the home. If both borrowers were confined to a nursing home or assisted living facility for more than 12 months, the loan could also become due.

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