Is a Reverse Mortgage Right for You?

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I rarely participate in these comments, but I really have to share my story with 1 company which has tremendously helped me. I just turned 74, many obstacles have come in the way of my retirement including a divorce a few years ago which really hurt me financially, to be honest I had this feeling that my savings and SS income were not going to be enough. Months and months of research and dealing with big banks - nothing but a big headache and they wanted to charge an arm and leg - I was considering a standard home equity loan but then I started reading about reverse mortgages. Long story short, i found this company while searching online - reverse mortgage lenders direct - they were able to automatically compare lenders for me and quote me a fantastic quote. I am not saying you need to do a reverse mortgage (for me this has been excellent and recommendable) but if you do here is their number 877 700 0534 - you can find the site online search for reverse mortgage lenders direct.

stephenwilliams2345 of NY 1:27AM May 30, 2012

I was really excited when I learned about reverse mortgage but I had a lot of doubts, how it works, if those thousands calculators are telling me the truth of it, etc .. What I needed was a honest lender with a nation-wide cover. Basic and simple information on reverse mortgage is what you are looking for? I spoke to Mike through the phone, he is from reverse mortgage lenders direct and I recommend you call him - 877-700-0534 Super-friendly and very knowledgeable guy! Check their website if you want more information reversemortgagelendersdirect.com

Steve Dale of LA 1:33AM December 15, 2011

options for family members after parents death. Does the son or daughter have to the amount the house is worth or the amount and all the interest and fees. If the house is worh valued at 80,000. what does the family pay???

ave pasho of NY 10:29PM July 26, 2009

We did the Reverse Mortgage to stay in our home and give us time to sell it with out having a FIRE SALE..Our home was worth about 525000 at the peak of the market.. It just got appraised for 345000. We paid 11750.00 up front in closing. Is it expensive? Yes!, however, compared to my home losing nearly 200k in Value and 40 percent in my 401k I really don't thing twice about the 11k!!. The peace of mind is well worth the thought that I can stay here until the house sells, and I can make up the closing costs on the sell of the home...

Dan of NV 11:00AM July 04, 2009

Because of their scrupulous practices of the last 5 years, Mortgage Brokers are looking for business. Seniors beware, they are preying on u!
The loans called reverse mortgages seem too good to be true. Do the math urself on AARP and u will learn that u only qualify for 1/3 of the value of ur house, even if the mortgage broker told u 1/2 of an overblown quick estimate.
U need counseling. So u pay the fee up front over the phone (from $75 to $125). While ur thinking ur going to go to a class with other seniors with whom u can exchange notes, a man comes on and speed reads a number of pros and cons u read already online and that is it.
A week later the appraiser arrives. Remember he depends entirely on the mortgage broker to make a living. Within 20 min he appraises ur home for far less than the broker estimated and recommends a new a/c, a new roof and new doors and windows and paint in and out. He demands his fee up front. If u pay him ur duped coz his fee is payable at the closing. If u don't follow that (or have an attorney follow that) u'll pay twice. So u pay him up front thinking that the loan will arrive next. Wrong.
Next inspectors arrive and give a quote for the roof, the a/c, the painting and repairs. The sum of these quotes cover most of ur anticipated loan. Desperate, u sign the repair contracts, hoping the closing will be soon.
The closing comes and woopdeedoo the broker shows u a clear report on all the repairs. Ur stunned coz no repairs were ever done. The broker deducts the sum of repairs and gives u the rest of the loan. Not enough to pay the real estate taxes for the next 5 years.
The broker lies about the inspection fees being payable up front. They are not. All fees are payable at the closing. The broker lies that if u do the repairs urself and do the painting urself, the contractor can give u a clear report for free. Sure. Who would make a free inspection and give a free clear report and make no money on the job?
I tell u, Reverse Mortgages are a perverse scam. It puts the mortgage broker in a position of power. Like never before, he brokers that power over appraiser and contractors alike to fleece the senile citizens, and the government guarantees it.

KingBee of FL 12:24PM June 28, 2009

that loose home equity loans were not really such a good idea for many folks. I think the same caveat should be applied to HECM loans. If you don't HAVE to do this to survive, don't do it.
As for the the #8 point, where some families have informal reverse mortgage loans with younger relatives helping elders stay in a house until repayment to heirs by sale of the house at someone's death, I say "great" (as long as it's not overdone). YOU DO HAVE TO ALL LOVE AND TRUST EACH OTHER AND DO RIGHT to make this work, of course, but you are not giving a slice of family money to corporations for all kinds of fees--and that's always the goal to try for.

Muser of NM 12:57PM June 17, 2009

Dear Mr. Moeller,
I was enjoying your article until I read your example of closing costs and you included the servicing set-aside. This is a common misperception and overstatement of the actual costs to close an FHA insured reverse mortgage.
A servicing set-aside is no more than a reduction of the amount that can be borrowed today in order to provide a cushion for the expected servicing fee to accrue over time (based on the borrower's life expectancy). The FHA's calculation of proceeds is generally based on the idea that interest, mortgage insurance and the servicing fee will accrue over time, and in all cases, the loan amount is reduced to a number below the value of the home in order to create the cushion for these items to accrue. However, because the servicing fee can be varied by the loan officer using the calculator, the servicing set-aside is broken out as a separate item that is used to determine the level of benefit. The actual cost of the servicing fee is the monthly flat dollar amount (usually $25 - $35), and the borrower only pays this for the number of months the loan is use.
Also, aside from the origination fee and up front mortgage insurance, closing costs may run closer to $3,000, rather than $5,600 (but this will depend on location). So all in all, on avergage the cost of doing the loan in your example would be closer to $17,000. Still not cheap (which is why it is imperative for seniors to choose an excellent lender and counselor), but far less expensive than you've represented.

Mark Burton of MD 11:53AM June 17, 2009