quote:

Originally posted by jaaron11:
Sell the $500,000 house and buy a $200,000 house. No reverse mortgage needed, and the taxes and insurance are more affordable.

thank you -- some sanity suggested

times / situations change in a persons lifetime

deal with situation at hand or face the cold hard truth of a life of bad decisions

----------------------------------

I personally do not think a reverse mortgage is always the best option for everyone. Sometimes it is the only choice people have to stay in a house they have been in all their lives.

For my parents it is a different story. They do not need a reverse mortgage. They can afford their living expenses. My father has a great pension, their social security and substantial saving/investments.
My father bought the property when he was a teenager. He built the house himself from the ground up. He just wont move. It is getting harder for him and my mother to not only physically maintain the house but also physically get around the house. He just will not give up what he built.
I think this is why reverse mortgages are so popular. People just do not want to leave the home they may have built and have known all their lives.

not a fan and hate the selleck commercials. Turn it off if I see it.

Ramsey is like everyone else. Has something to sell. I think he has somethings right but not all by any means. Never felt compelled to spend time with him. Debt is not the devil, but it can be if you let it. And many do. The days of saving to buy something went away three of four decades ago for the most part. The want it now crowd took over.

I spent time early on with the radio way back when and really enjoyed listening to Bob Brinker. His show was "Money talk." He had an influence on me as a hard working young man many years ago.

This is America. We have choices. Don’t want a reverse? Don’t get one. Don’t like Tom Sellick? Change the channel. Some of you like to bitch for the sake of bitching.

quote:

Originally posted by jaaron11:
Sell the $500,000 house and buy a $200,000 house. No reverse mortgage needed, and the taxes and insurance are more affordable. The reverse mortgage enables you to maintain a standard of living that you can no longer afford, with the huge penalty of zero assets at the end.

The reverse mortgage is not a smart financial move no doubt about it for the exact reason you have listed. The reality is that once people get to a certain age and they have lived in the house a certain amount of time they don't want to move. So in reality Dave is right it's a poor financial decision.

Several of Dave's ideas are not based on smart math and he mentions it often. If you only had a math problem you wouldn't be in the position you're in. Like paying off debt. If you have 4 credit cards it would make the most mathematical sense to start with the highest percentage rate first. His system is start with the smallest balance first because you get a "win" after paying one off and on and on. By the time you had the first 3 payed off you can attack the last one vigorously because all the extra money is now going to one bill.

Credit score is the most overrated financial metric there is. We are all brain washed by the banks into thinking we have to be concerned about it. I remember when I was in college and on the first day there was table after table of credit card companies trying to set everyone up with credit cards. I don't know if that's still the case. If you are even halfway responsible with money your credit score will alway allow you to buy way more than you should.

I kinda disagreed with him on credit cards because to my thinking I wasn't paying any interest so I though who cares. Then I found out the average person spends 18% more per year using a credit card because it doesn't register as pain like cash does. A simple example is if you look at a vending machine credit purchases are over 100% larger than cash purchases.

About the only thing I disagree with Dave about is not investing until you are out of debt besides your house. If you have a company match in your 401k I would at least do that. I get that the concept is your biggest wealth building tool is your income so you don't want to be giving it away to banks any longer than you have to but a match is truly free money.

quote:

Originally posted by Rustyblade:
Except for a very few a reverse mortgage is not in a home-owners best interest.

Yet between Ft Lauderdale & w. Palm Beach there seem to be many doing it.

Among a few different social groups(billiard clubs, shooting events, golf...) a great many doing it are retired (often both) from The Public Sector. Teachers and police especially.

Just an observation.

Who have a nice pension AND social security.

quote:

Originally posted by NK402:
I have been disappointed to see Selleck doing those ads.

Does anyone else notice that it appears Selleck is dying his hair (and moustache)?

quote:

Originally posted by jimmy123x:

quote:

Originally posted by Rustyblade:
Except for a very few a reverse mortgage is not in a home-owners best interest.

Yet between Ft Lauderdale & w. Palm Beach there seem to be many doing it.

Among a few different social groups(billiard clubs, shooting events, golf...) a great many doing it are retired (often both) from The Public Sector. Teachers and police especially.

Just an observation.

Who have a nice pension AND social security.

Er no...you are incorrect.

At least in MN, we (cops) do not get SS, that is why we pay into PERA, the Public Employees Retirement Association. We do get medicare when we qualify, but then we've paid for that, just like everyone else.

The only way you'd get SS as well, is if you worked long enough outside LE to qualify by paying in enough, just like everyone else, and that takes some doing.

quote:

Originally posted by Pyker:
At least in MN, we (cops) do not get SS, that is why we pay into PERA, the Public Employees Retirement Association. We do get medicare when we qualify, but then we've paid for that, just like everyone else.

The only way you'd get SS as well, is if you worked long enough outside LE to qualify by paying in enough, just like everyone else, and that takes some doing.

Municipal workers who have not paid into SS but collect SS because of work seperate from their municipal career collect at a vastly lower rate.

so you get $ taken out of your check for SS. I am guessing that with your pera they are calculating that figure into your retirement using some magicalformula. It is a semantic deal no doubt which is how they like it.
Makes it easier for the collective to say we pay into ss but do not get any benefit.

The reason the public retirement shams are slowly get adjusted and or phased out is that the burden is continually pushed further and further down the hill to the younger workers to fund the benefits. The plan just a soon you die once you start to recieve benefits. That benefits the program the most.

Unfortunately allowing members to retire in their fifties and many sooner on disabilities are bankrupting them or forcing them to slowly reduce benefits they promised in their heyday.
That is why most who retire on these programs spend a good portion of their retirement years hating the program they loved getting to retirement. That would suck.

quote:

Originally posted by jimmy123x:

quote:

Originally posted by Rustyblade:
Except for a very few a reverse mortgage is not in a home-owners best interest.

Yet between Ft Lauderdale & w. Palm Beach there seem to be many doing it.

Among a few different social groups(billiard clubs, shooting events, golf...) a great many doing it are retired (often both) from The Public Sector. Teachers and police especially.

Just an observation.

Who have a nice pension AND social security.

I have pension of ~50k plus SS. Worked 44 years in industry as an engineer. Wife has SS based on my earnings. She was a housewife since '68.

quote:

Originally posted by smschulz:
More of just a bad business deal than a scam.

This is probably accurate. You are, in essence borrowing money against the house, which is given to the lender at your death to pay off the loan. But the rates are bad, and the projected price is also low. It is my feeling that they are almost always a poor way to borrow, but not a scam per se.

What happens to the house on the owner's death? Does it revert back to the lender? If it does, one had better not plan to leave the house to their heirs (if any).

quote:

Originally posted by old rugged cross:
so you get $ taken out of your check for SS. I am guessing that with your pera they are calculating that figure into your retirement using some magicalformula. It is a semantic deal no doubt which is how they like it.
Makes it easier for the collective to say we pay into ss but do not get any benefit.

The reason the public retirement shams are slowly get adjusted and or phased out is that the burden is continually pushed further and further down the hill to the younger workers to fund the benefits. The plan just a soon you die once you start to recieve benefits. That benefits the program the most.

Unfortunately allowing members to retire in their fifties and many sooner on disabilities are bankrupting them or forcing them to slowly reduce benefits they promised in their heyday.
That is why most who retire on these programs spend a good portion of their retirement years hating the program they loved getting to retirement. That would suck.

This is so garbled, I find it hard to understand what you mean.

In MN, we all (LE) pay into PERA, we do not pay into SS. My retirement is based entirely on the payout from PERA. Even at 65 I will not get SS. This is not optional.

The only way I could qualify for SS is by working another job, outside of public employment and contribute enough $$ to earn sufficient credits. I can't live long enough for that to happen.

I get a monthly stipend based on the amount of $$ paid in and the length of service. If I live long enough, I'll use up my contributions and they'll have to pay me from the investments or whatever it is they use the contributions for.

Retirement funds are not infinite, and they are effectively financed in the end by those still working in order to pay out those who have retired and exhausted their own 'pot'. Much the same as SS really.

quote:

Originally posted by egregore:
What happens to the house on the owner's death? Does it revert back to the lender? If it does, one had better not plan to leave the house to their heirs (if any).

No the heirs have 180 days to sell the property or refinance it, they can also request up to two 90 day extensions. Essentially you have a year to resolve the debt.

Ill go on to say that is someone is considering a reverse mortgage on this board, feel free to send me a private message. I would be happy to discuss it with you and talk about whether it may or may not be right for you or your family.

FURTHERMORE, I AM NOT SELLING ANYTHING I AM AN ATTORNEY NOT LENDER OR LOAN OFFICER.

[
In MN, we all (LE) pay into PERA, we do not pay into SS. My retirement is based entirely on the payout from PERA. Even at 65 I will not get SS. This is not optional.

i had no idea that having ss taken out of ones check was optional. That is a new one on me.
I thought everyone had to pay it.

quote:

Originally posted by old rugged cross:
[
In MN, we all (LE) pay into PERA, we do not pay into SS. My retirement is based entirely on the payout from PERA. Even at 65 I will not get SS. This is not optional.

i had no idea that having ss taken out of ones check was optional. That is a new one on me.
I thought everyone had to pay it.

Sorry, I garbled my own transmission there. I meant to say: Paying into PERA is a requirement and you cannot elect to pay into SS instead as an option. It's PERA or nothing.

If you have a second job, or work after your retirement, you have to pay into SS like everyone else, but you ain't ever going to get enough credits, under normal conditions, to draw SS at 65.

I suppose if you got kicked on disability of some kind, in effect an early retirement, you might creep under the SS wire if you worked long enough, but it would be the absolute minimum payout.

quote:

Originally posted by old rugged cross:
[
In MN, we all (LE) pay into PERA, we do not pay into SS. My retirement is based entirely on the payout from PERA. Even at 65 I will not get SS. This is not optional.

i had no idea that having ss taken out of ones check was optional. That is a new one on me.
I thought everyone had to pay it.

If you thought everyone had to pay it.....why didn't you have to pay it??? Are you some kind of Social Security Tax cheater?

quote:

Originally posted by Timdogg6:

quote:

Originally posted by egregore:
What happens to the house on the owner's death? Does it revert back to the lender? If it does, one had better not plan to leave the house to their heirs (if any).

No the heirs have 180 days to sell the property or refinance it, they can also request up to two 90 day extensions. Essentially you have a year to resolve the debt.

And the heirs/estate can’t owe more than what it sells for. So if a 90 year old took a big reverse in 2000 at higher rates than today and died in 2010 during the bottom of the housing market and his reverse mortgage including interest due was greater than the sale house the estate is not due the difference. Bank eats it. This is not the usual case but it happens

My grandma was 94 or 95 years old and had been drawing down savings for about a decade with full time kick in nurses. She was adamant she wants to stay in her home. Mentally she was sharp as a tack but her legs had long given out. So my mom and aunt arranged a reverse mortgage for her she lived in her house until 100 and only went to hospice about 2 days before she passed. My mom and aunt sold the home and settled the estate and split the remainder according to the will. Would it have been nice to see my mom and aunt end up with another few hundred $k ? Maybe. But also I’m happy I had my grandma around to 100 and that’s that. She lived just a few miles away and I saw her and my grandpa pretty often my entire life.