My parents are inquiring about reverse mortgage. Any advice? - AgingCare.com

My parents are inquiring about reverse mortgage. Any advice?

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They have already been scammed into predatory loan. now they -want to do reverse mortgage to " get out of debt" (unsecured credit cards). My dad is drugged out of his mind half the time and my mom goes along with ANYTHING he says. I tried to create a budget for them do they could live comfortably within their means but they won't do it. I told my brother we really need to take over the finances because they clearly don't know how to manage money anymore. He lives in Md, and I am in SC taking care of them. They built this house 17 yrs ago and owed no one. Borrow do they can pay their credit cards. Paid cards note they have a mortgage. Got more credit cards. More they want to repeat the cycle, which will make me homeless and/or in debt! They have great insurance do they have NO MEDICAL BILLS. Thoughts?

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Agilmore, if your parents should bring up the reverse mortgage route again, please note if your parents do get the reverse mortgage, then your parents pass on leaving the house to either you or your brother....guess who will need to pay back that reverse mortgage loan immediately?.... it will be the child who inherited the house along with it's loan.
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Yes, I live in the home with them, do if I refused to pay the lights, etc. I would suffer too. I spoke with them about these stupid mistakes being made over and over. My mom told me she is not obligated to leave me the house. They want to" get out of debt" so they won't be a burden. The burden started two years ago when I moved 500 miles to be with them! It will be more of a burden when I'm stranded and homeless. My brother is coming to talk to them, we are really thinking about being conservators
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This is a bad situation. There is little you can do about their spending money beyond talking to them unless they are declared incompetent to handle their own finances. If your parents are like many, they won't listen to a daughter as well as they would a son. Maybe they would listen more to your brother. I take it that you are living with them at their home. Do they need help staying at home, or would they have to enter a facility if you left? Do they have any physical or mental impairments. I wondered because your father was always on drugs. If they need your help in order to stay in their own home, you hold a trump card by being the caregiver. Let your parents know that you were depending on the house to live in -- kind of like payment for your years of caregiving. But you are poor, so you couldn't afford to pay the home equity loan that would go with the reverse mortgage. So if they took one out, then you would have to leave to find a job, or a better job, to make sure you had a way to live.

Thinking about it, that last idea might not be such a bad one. You don't want your future to be dependent on the unstable behavior of your parents. That is a very bad situation to be in and I would be worried about it. Please let us know how it goes. They sound like they are still going down the road that got so many people in trouble.
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Agilmore1964, maybe you need to do some tough [finance] love. If your parents don't pay the light bill, let the lights be off for awhile. Whatever you do, don't pay their bill. It's not your responsibility. Even if this happens every 3 or 4 months. Credit card companies love your parents, massive interest rates for repeat offenders. Too bad you can't cut up the cards or call the credit card companies and ask to roll back the max credit limit down to $500 for each card. If the cards are rejected at the stores because they are maxed out, that will slow down the shopping until they drop outings.

As for a reverse mortgage, some people don't realize that that a reverse mortgage is a *loan* that will have to be paid back with interest and whatever fees are attached to this loan. And one has to qualify for this loan, thus you need good credit.... so tell your parents to forget about a reverse mortgage, they won't qualify.
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Bankruptcy is not an option for them unfortunately. They are simply living beyond their means, subject to asinine, impulse spending. That is too say, if they go into a dollar store, they will usea credit card, spend wwaaay to much on things no one will ever see, and not pay the light bill. Or pay me back for paying it.
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Reputable credit counseling would be a first step. I think you are right about taking over. Not likely, but remoately possible the scammers who did a loan under terms they did not comprehend could be gone after legally. This is swimming wtih the sharks for sure, there are a few honest helpers in a sea of predators who don't give a d@mn about their victims or families well being as long as they can make a few bucks.

Is bankruptcy an option?
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