Wednesday, April 24, 2019

Reverse Mortgage You really want it?

An Excellent perspective.

Reverse Mortgage
A reverse mortgage is simple. You get a bag of money to spend on anything and never have to pay it back. In return the lender goes on the title of your house and charges you interest and fees that you never really see. So over time the debt grows – the opposite of a conventional mortgage. The money is eventually returned to the lender when you sell the property or croak, in which case your estate pays.
The advantage is tax-free funds and no payments. The disadvantage is you’re eating up your real estate equity every month. For example, a 70-year-old living in a paid-for $1 million house, qualifies for a reverse mortgage of about $350,000. If that cash lasts for ten years of expenses, at age 80 the reverse mortgage debt will have grown to $670,000. Seven years later it will top $1 million. The heirs will be pissed.Want it?

What you want can bite you later

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