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GardenArtist, you are so right about projects around the house. My projects are gathering major dust because I am just too tired to even think about calling someone to come out to fix something.... [sigh].

Yes, I want to sell my home eventually and downsize to something easier to take care of. I am exhausted worrying about wind storms and what tree will come down next and land where... worried about what major appliance will break next [already installed a new furnace/air conditioning unit.. new deck as the old one broke away from the house... replaced all the windows a couple years ago as I could no longer open the old ones... etc].

If I had really deep pockets and wanted to invest more into the stock market, maybe I would use the money from a Reverse Mortgage if I knew my stock investment would be a high return compared to the monthly mortgage payback.
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Torie, I'm in the same position as FreqFlyer. I suspect she also lives in a state in which there is always something to be done on either house, but it's unlikely to get done.

The travel as well as sitting in doctor's offices is monotonous, tiring and boring. These are passive, not active chores, and they're fatiguing physically and mentally. It's primarily a chauffeur's function.

A lot of time is also spent on anxiety - such as when I can't get ahold of my father and have to call the neighbors for reports or drive close to 60 miles to ensure that he's safe, as just happened.

I'm only 70 going on 71 and I've already decided that I want a different retirement home; the house size is manageable but 1.5 stories isn't practical any more. I can't lug furniture up and down stairs as easily as I could 10 years ago.

There's also the issue of the increasing burden of keeping up 2 houses as the parent(s) grow older. Men of the age of FF's and my father don't see that women can do DIY projects, so it either has to be a friend or the chore doesn't get done. That can lead to some safety as well as discomfort issues.


Windy, well, seeing some of the other posts today, I guess people have passions for different things. I have heard the commissions on reverse mortgages are pretty good though. Given all the so-called movie stars hawking these products, maybe there's something that especially appeals to washed-up actors as well.
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Tori, isn't it better moving now while your Mom still has clear thinking, so she could form new friendships [bet she didn't know anyone in her neighborhood when she and your Dad first moved in]. Your Mom has lived in her neighborhood for 60 years, bet that would be the case for others who already are living in that ALF, wouldn't surprised me she might find someone she knew from her past.

Moving her later will become much more difficult, especially if her memory has failed. I am dealing with that with my parents, who are in their 90's and won't budge from their home. I can't make them understand that they would have MORE freedom and MORE choices if they moved to a retirement village. I desperately want to return to be their "daughter" instead of "chauffeur/errand boy", six years is wearing on me, I can't maintain two large homes, and I am in my own age related health decline :(
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You have a "Passion" for reverse mortgages? Really Dude........
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Briefly - Mom has lived in the same house for 60 years. She has neighbors who visit daily and are happy to run errands here and there if I won't be there for a day or two. I live 35 miles away, which in our area is a minimum45 minute drive, and 1 1/2 to 2 hrs. during commute times. Mom is mentally competent to make decisions. She does not want to move. An ALF would be almost the same cost when I add in help with bathing, toileting, dressing, and medications, plus sometimes needing a transport chair instead of her walker. She is starting to have short term memory issues. At this point moving her to an ALF or other facility, in my opinion and that of her medical providers, could easily be a mental break for her. Selling her home and moving to a cheaper place to live would be even further away from me than she is now, where she would know no one, need all new medical providers, and there would be no support network.

Mom and Dad worked hard to buy and pay for the house and now the house is paying her back and providing for her care.
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Hello Garden; not sure where you are coming from, and it was never my intention to "hunt" for business here. I am purely telling some facts on reverse mortgages which happens to be my second career and passion. So it is never my intentions to "hunt" for prospects here, just answering some questions. Now for the point you are challenging me on; a reserve line of credit will grow by 1.25% over the current interest rate of the variable loan, and will grow every year until utilized. No negative amortization is accrued until funds are drawn and the reserve line is started to be used. Then of course you have no payment and the interest does compound and the "negative amortization grows" with no payments. Now, if you like, you can actually make payments and dollar for dollar of your payment goes back to the reserve line of credit. Again, it is not my intention to do anything else than give my opinion and hopefully facts of reverse mortgages and yes I am a Reverse Mortgage Professional. I never tried to hide that and put my name and bio and picture on the response. Just the facts. Thanks so much and sorry if I upset you.
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I don't think reverse mortgage is a good idea. Get good advice. If at all possible, try to pay more than the requirement. Get it paid off. When you want to sell it, you will get a lot more than with the RM folks. Don't ask anyone who might have an interest in your property.
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TorieJ - Out of curiosity, just how is the math working for this?
If mom has 2,500 as mo. income between SS & annuity, that's 30K a year income. If she has & paying for 24/7 caregivers, at $ 15 hr = 131K a year plus taxes, FICA; or if its through an agency it would be more like $ 25 hr = 218K a year at least. Whether 131K or 218K to pay a caregiver, it's still a huge amount of $ to be paying for caregivers in a non skilled nursing situation. More than the average cost of a NH @ 8K a mo (96K yr).

Is your mom's house worth an enormous amount of $ - like 1M or more? so that the RM is actually a large amount of $$$. Is there a substantial amount of $$$ saved or invested, that is supplementing the RM and her $ 2500 mo.?
When RM $ runs dry, then what?

Did you look into Medicaid and found that mom would not qualify due to her annuity? or to owing a home that is over the Medicaid limits for property value (500K or 750K)? or other Medicaid compliance issue, so RM was only option?

So your RM allows for no repayment to be done for a full year after mom either dies or does something to have the RM come due? Really? Are there additional fees added onto this limbo period? I'm pretty sure the rules for federally backed RM has its so family have 30 days to let the mortgage holder know what they plan to do and up to 6 mo to arrange financing for 95% of FMV.

It's hard for me to imagine a mortgage holder allowing a year to go by on a property that does not have the mortgage holder homeowner living in it. How would vacant dwelling insurance get dealt with? You should look into that as it could be very, very costly.
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Torie, an RM is different from other kinds of loans, which typically are paid down through monthly payments. I reviewed the application materials for a friend and was shocked to see the payment schedule. Based on what I read, the loan isn't paid down (or amortized) unless you're making payments. And the interest is cumulative, and added to each payment. That means that the monthly calculation if payments aren't made, increases every month.

In the situation of which I'm particularly aware, given the life expectancy of the mortgagor, the initial loan amount together with accrued interest would over that person's anticipated lifetime exceed by several factors the amount of the original loan. It would exceed the value of the home. There's no way the individual could ever pay it off, and it would default on his death to the RM lender.

I only saw the schedule of that one lender, but from other information I've read, I don't believe that's unusual. If I'm wrong, I'm sure someone will point that out.

FF's suggestion of downsizing is a good alternative, even if it is hard for someone to leave a home of perhaps a lifetime.
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TorieJ, you are very lucky to have a 12 month window to get new financing or to sell the home. My boss wasn't that fortunate, he had only 30 days to find new financing or put the house on the market, after his wife had died [she had Alzheimer's for 15 years]. It became a nightmare for him because he had to sell, and the bank became like debt collectors hounding him day and night until the house went to settlement to new owners, and even calling him weeks after... and this was a well known bank, too.
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Another option? One option is to downsize the home.... sell and move into some more affordable. Less property taxes, less home owner's insurance, lower utilities, and easier to clean/maintain.
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We are using a reverse mortgage to allow my mother to stay in her home with a full time caregiver. There was an information process involved, including a telephone interview, where the details were explained to us - repeatedly. Once Mom passes or goes to a facility of some type to live and will not return home we have 12 month window before the mortgage must be paid back. We could apply for conventional financing of some type to pay back the reverse mortgage so that we retained the home and live there or rent it out. We already have EQ insurance so I don't know whether that was required or not.

What other options were there? Not much. I tried to obtain a large line of credit in my mother's name which we would use to pay her expenses and make the payments out her limited funds but she does not qualify. A reverse mortgage is a loan, and it has to be paid back when it is no longer needed. That is no different than buying a car and if you decide to sell the car prior to paying the loan in full, you will need to pay the loan prior to transferring title as the financing agency is technically the legal owner. If you know of other options that allow an elderly person who needs a full time caregiver to live in their home and pay their expenses with only social security and an additional small annuity, total $2,500, a month, please let me know.
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Two of the big RM players, Bank of America & Wells Fargo, got out of the new reverse business in 2012. They were like 50% of the market too - they still service & honor the old loans but do not write any new ones. MetLife exited RM in 2013. I would image they all did it because many RM homes now are negative-equity so they were taking losses on those RM's. What is left in are smaller lenders and brokers. Some are good but some did subprime mortgage lending.

Below are excepts from an article from the New York Times, October 14, 2012 by Jessica Silver Greenberg: “Reverse Mortgages Costing American Their Homes”
nytimes/.../reverse-mortgages-costing-some-seniors-their-h...

“The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out. Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.”

“MetLife was the latest major player to exit the market, in April. That followed the departure last year of the two biggest reverse mortgage lenders, Bank of America and Wells Fargo, which cited falling housing prices and difficulty assessing borrowers’ ability to repay the loans.” “Reverse mortgages also have troublesome incentive structures that might encourage brokers to steer seniors toward lump-sum loans, which carry a fixed interest rate, rather than a line of credit with a variable interest rate, the bureau found. In a lump sum arrangement, the interest charges are added each month, and over time the total debt owed can far surpass the original loan. Brokers earn higher fees on these loans and even more money when they sell the loans into the secondary market, where they can get rates nearly double those for variable loans, according to rate sheets obtained by the consumer bureau.” If you want to read more the link to this article is:
nytimes.../reverse-mortgages-costing-some-seniors-their-h... Over 400 comments with lots of personal RM stories. It is a pretty sobering read.

Another article on RM and subprime is from the National Consumer Law Center, called “Subprime Revisted: How RM Lenders Put Older Homeovers” Equity at Risk” nclc/images/pdf/pr.../report-reverse-mortgages-2009.pdf
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RM is debt that HAS TO BE REPAID. If homeowners, their kids or heirs want the house (or worst case scenario - have been unpaid caregivers for their parents and have no other home), then the RM, it’s fees, interest and other expenses within the RM has to be repaid once the homeowner dies (or does something to cause RM come due). Under fed rules, lenders allow heirs up to 30 days to let them know what they plan to do and up to 6 mo to arrange financing for 95% of FMV of RM’d house. If not, property can be foreclosed on &/or sold on the open market. There is no gray area, the RM has to be repaid. If it’s an FHA/HUD backed RM & house sells for less than owed, feds pay the difference to the mortgage holder. Family doesn’t have to make up the difference. But if you want to keep the house, you have to pay the RM.

RM’s can work for some….like a healthy couple 63 & 65 which own 300K appraised home outright & plan 10 - 20 years there; home in an area of increasing value; & have guaranteed income to pay taxes, insurance, maintenance for 10 - 20 years; & they do line of credit RM. So when they move, home is 400K which repays RM & leaves $$ for downsized home or CCRC buy-in. But if that’s you, really you don’t need an RM as you can get HELOC or personal loan. Too often, RM is done by those in financial or health crisis who don’t understand what an RM involves. If RM’d home is lower value, the $ (may be less than 50% of value) is just a band-aid on a bigger $$ problem. They can’t pay for what is required for the RM; or end up moving to a NH. Either way RM default & foreclosure.

As of 2013 significant changes happened to FHA backed RM. Now you have to show ability to pay the “required” on the house, like insurance, taxes, etc for years. If not, then have an escrow-like account to cover these costs. If you are low income and struggling, you just can’t do this. No federally backed RM for you. Also now value & condition on house has to be verifiable.
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Robin, you wrote:

"Utilizing a reverse mortgage as a reserve line of credit is a great way to prepare for unexpected costs and events in the future and this amount grows each year and is not predicated on the future value of your home."

What grows is the amount of indebtedness that has to be paid. You failed to mention that reverse mortgages are negatively amortized
(bankrate/finance/mortgages/reverse-mortgage-payments-don-t-grow.aspx).

Gee, is it a coincidence that you state in your profile that you're selling reverse mortgages?

Your profile:

"I have been there and done that with my parent and in-laws. Now as a senior myself, I am looking for ways to help those elder homeowners with questions and needs on how a reverse mortgage can help. No candy coating, I tell it like it is. Here is my bio: The choice to become a reverse mortgage professional with AAG as a second career was motivated by my desire to help seniors understand all of the beneficial options available to them utilizing a reverse mortgage. As a senior myself, I realize the need for a solid understanding of how reverse mortgages are so much more than a last resort source of funds. I can show you how a reverse mortgage can help you eliminate monthly mortgage payments, make retirement savings longer, buy a home that better fits your needs or use a line of credit to build a safety net for emergencies, home repairs and health care expenses. I look forward to discussing these opportunities with you and helping you achieve the retirement life you want. "

I guess these forums seem like good hunting grounds. Shame on you.
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Wow, look at all the responses to your question in just a few hours. Very interesting on how sensitive reverse mortgages are to folks. You always need to look at your overall financial situation before considering a reverse mortgage. A Reverse Mortgage is, in most all situations an FHA/HUD Insured Loan with some Mortgage Insurance to support this insurance. Which makes them a non recourse loan to your heirs. And, nothing more than a loan on your home which needs to be paid off when you decide it is no longer your primary residence. You must commit to paying the property taxes, insurance and maintain your home. I can not answer for your state, but in California which some consider the EarthQuake Capital of the country, special earthquake insurance is not required. You still own the home and have a first mortgage on the property, we call them trust deeds in California. Utilizing a reverse mortgage as a reserve line of credit is a great way to prepare for unexpected costs and events in the future and this amount grows each year and is not predicated on the future value of your home. Good luck to you and sure love all the comments. .
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Sed - please think clearly & carefully before you or your elder sign off on a reverse mortgage. RM is debt. RM is a loan. RM is debt that has to be repaid if anyone wants to continue to live in the house or own it after the elders death. FHA backed RM limit the amount to about 50% of the value of a home AND the borrower has to have the ability to show they have the verifiable income to pay the required insurance, taxes, etc on the home. If they don't have the monthly income to show this ability, then either they don't get a RM or they need to place funds in an escrow-like account for those costs. RM has all sorts of fees - like since it's a new mortgage, Mortgage insurance premiums attached to the debt.

Also often elderly homeowners who have their home paid off, are underinsured. For those who get a RM, they now need to be fully insured - homeowners, flood, windstorm, earthquake or whatever coverage for their market - and homeowner needs to either pay for these directly or coverage will be force-placed with the costs added to the RM. If maw-maw's house is coastal, she may find that although she never had flood or windstorm insurance, she now is required to have both and the costs are thousands of $$ for a policy.

If you are going to do a RM anyways, the line of credit option is the better way to structure the loan.

Often RM are just a band-aid on a much bigger financial problem.
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No, the homestead exemption remains with the Florida homeowner. The reverse mortgage does not impact that. The only thing I'd suggest is to think about the long-term. Get advice from an elder law attorney. Be prepared to stay in the home for at least three years for the reverse mortgage to be worth it as there are up-front costs and finance charges for any draw downs made. It can all add up quite quickly.

To keep a reverse mortgage, you have to live in the home as your primary residence. If you end up having to leave permanently due to incapacity to remain there, the bank will require you to sell the property within as little as three months (but that may vary; check the fine print on your loan). It's great if you get to remain at home and die at home, but if you have to leave permanently, your loved ones will be under pressure to sell the house asap (at a time when the market may not be favorable), and those assets will become exposed and can be picked off by creditors/ALFs/NHs, etc.

But, again, I would talk to an elder law atty. There is a lot to consider and you should make a very informed decision.
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To original poster: the title to the home remains in your name and therefore does not effect a homeowner exemption. Here's more information: http://www.consumerfinance.gov/askcfpb/234/if-i-take-out-a-reverse-mortgage-loan-does-the-bank-own-my-home.html
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You get her up off the floor by calling paramedics. They will be absolutely delighted to help her. They will also confirm that she's okay.

I can hear you now, "She's NEVER let me do that!" It's not her call. she doesn't get a choice. Please to tell me how she will stop you. ;)
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Mom fell....again....she is OK but I am a wreck cause A) she fights me....cause she doesn't want me to hurt my back getting her up....and is really too feeble to get up on her own! and B) she REFUSES outside help...on the days I have to work or my monthly trek into another county where I have my Condo....to the point of being belligerent, nasty, and super angry! Even went so far as to throw out a friend who she suspected I'd hired "to check up on her"! Her reasoning is "God has and will take care of her and she could fall and die even with me in the other room!! Sigh.....
Soooo how DO I get her up off the floor when she does fall
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Think long and hard before getting a reverse mortgage. Its really a rip off. My aunt and uncle did a few years back. My uncle passed away a month ago, my aunt has Alzheimer's really bad and will never be able to return home. If the house doesn't not sale for enough to pay off the mortgage because she has a guardian they are responsible to pay the balance and any outstanding bills she may have. Of course the lawyers didn't tell the people that took guardian ship over her all the fine print before they signed. With reverse mortgage you never pay it off.
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If your home is getting too expensive to maintain or bothered by property taxes, why not just sell it and get a smaller place or apartment. investopedia/articles/personal-finance/101714/5-top-alternatives-reverse-mortgage.asp
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Ask the facility where you will get a reverse mortgage. However, think about it. If you agree to a reverse mortgage you no longer own the home. You can just live there until you sell it or pass away. You just handed it over to the facility otherwise.
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