Why Should I NOT Get A Reverse Mortgage?
HTML-код
- Опубликовано: 27 мар 2022
- Why Should I NOT Get A Reverse Mortgage?
Listen to how ordinary people built extraordinary wealth-and how you can too. You’ll learn how millionaires live on less than they make, avoid debt, invest, are disciplined and responsible! Featuring hosts from the Ramsey Network: Dave Ramsey, Ken Coleman, George Kamel, Rachel Cruze, and John Delony.
Watch and subscribe to all The Ramsey Network shows here: ruclips.net/user/TheRamseySh...
![Rob49 - On Dat Money (with Cardi B) [Official Video]](http://i.ytimg.com/vi/fTFS58mHJh8/mqdefault.jpg)
I’m 38 and just purchased a home. I can’t see how borrowing against it once it’s paid off is a good idea but maybe I just don’t get it.
Yes, it's not for everyone (I call it the "spending your kids inheritance loan"). what if you have no kids, just turned 62, own a million dollar property and plan to go out feet first on a gurney? This is perfect! How else can you enjoy your equity without having to sell your house or borrow against it with monthly payments? Who cares what the fees are as well! The game is to live to 100 and spend every dime and more of your hard earned equity! FHA insurance covers any loss the bank may have (chances are the value of your property will continue to increase and the loan balance may never catch up in your lifetime) so play the game, stay healthy while traveling the world and enjoy the fruits of the "unearned increment" that real estate provides! (mic drop)
You got that right..!
I did a reverse mortgage on my $400,000 house (which is paid off) ; took the $206,000 lump sum along with 300K and put it in a lifetime annuity. I'm 66 years old and the monthly income from the annuity along with my social security amounts to over 5K per month. We live modestly, and we still have substantial money in a saving account and all vehicles paid off (and of course no mortgage). Our monthly expenditures amount on average to between $1,500 and $2,000. So we bank around $3,200 a month. We have no heirs. It made sense to us.
But Dave said you can get 65% of your equity and yet you only got a bit more than 50%. I bet you are well into your 60’s too.
Weird how Dave keeps misleading people on how these products work
I'm your 56 year old lost son.
@@mjulianlee lol. I always figured it would be a knock at the door. Welcome home son.
Do you have other investments or retirement funds? Annuities and social security are not liquid assets, so hopefully you have liquid assets to balance things out (I know you mentioned sizable savings so that’s good).
Just like me… you are the perfect candidate
Thank you for getting right to the point with the details.
Here is a RM scenario: I am 80 years old, condo is paid off, no one I want to leave it too, comfortable paying Fees and taxes. I don't want to leave all that money on the table when I go?
Rock on elder.
I hope you get a more intelligent reply, because we know of other women that have that very reasonable question as well. Good luck to you 👍🏻
Numpty@@mjulianlee
If you don't want to sell the house and move into something smaller (a big deal for an elder) then a RM is a legit option for your situation. Travel the world. Buy a Ferrari. Eat in nice restaurants for the rest of your life.
It appears that Dave has gotten so famous that now all he has to say is don’t do it because I said.
I believe a video explaining the cons in detail or inviting someone in to debate the issue would be more educational.
I’ve listened to many certified HECM professionals and they use facts and reason, including the cons, to explain and help others to make educated decisions on their retirement.
Dave, don’t use the minority scammers out there as your reason to stay away from reverse mortgages. I’m sure there are plenty of financial planners who scam people but that don’t mean we shouldn’t listen to any financial experts.
Here is an idea, downside your life style, sell the house get a small apartment, get rid off cable TV, and drive a small car, take the cash find a safe investment, that can make you some income.
Minimalism will be an advantage for those are not materialistic.
The call is a moot point here.
You can’t even qualify for a reverse mortgage until you are at least age 62 and you have to have more than at least 50% equity.
Reason being is they want the room for the loan to grow as the house appreciates for when the loan becomes due at death, sale, or when the person goes into a nursing home.
They also have insurance you must purchase on the loan so if the loan value ever exceeds the property value, that the insurance will pay.
So in other words, a really bad idea. Got it.
What cracks me up is the idea a reverse mortgage puts you out for not paying property tax.
Try not paying prop tax on a home free and clear - see how long you stay in that house -
moot not mute.
Your home IS your nursing home if you do not take care of yourself.
@@mweb1 thanks, fixed it :)
I love it, “if lines up with Snuggie’s and walk-in bathtubs, not a good product”.
Dave - at least TRY to understand how reverse mortgages work before bashing em. A 57 year old isn’t getting a federally insured reverse mortgage first off.
Secondly he isn’t getting anywhere near 65% of his equity out. Not even close.
There is no way Dave doesn’t know this - so why does he keep making these claims?
Something stinks in Denmark here
Because he is there to SELL HOUSES. That is his bias look at the description.
The most is 25% now.
Unfortunately, there are a lot of senior citizens who are in the situation where the majority of their wealth is tied up in their home. There is not a good way to tap into that asset to fund their retirement except to sell and buy a less expensive house. Many seniors do not want to leave the home that they have lived in for the past several decades. They could obtain a traditional mortgage or a HELOC to access that equity, but that requires repayment, which they may or may not have the income to cover. Enter the reverse mortgage companies to fill a need in the market. Is a reverse mortgage a good idea? Maybe, maybe not. Depends on your situation.
My parents sold their large home at 93 and 90, and moved into a one-level duplex. They couldn't be happier!!
Exactly 💯
Perfect response! It is not a one size fits all mortgage. Nor should it be!
I'm a widow and own a $2+million paid for home. I have savings and pension income. Rising costs are causing me to worry about not being able to pay my expenses in a few years. I have no children. I love my home. So I am looking into RM. I have NOT failed to plan. I am smart and I live modestly. Right now I am ok but I like to plan ahead.
But The Fonz and Magnum PI told me it’s a good idea!
Never trust a man with a moustache
I’m guessing Tom Selleck doesn’t have a reverse mortgage.
Aieeeeeee
I view the reverse mortgage the same as any other financial instrument. It can be good or bad depending on how it’s used. Reverse mortgages have even saved people from foreclosures who would have otherwise defaulted on their forward mortgage type. It helps people sometimes too.
They also don’t mention if you have a decent amount of money coming from a pension and social security. I see no problem with a reverse mortgage if your retirement income exceeds. Your yearly property taxes and your home insurance sounds like a win win to me.
" It can be good or bad depending on how it’s used." -- No. They are almost always a bad idea. There is always someone in the comments section on videos that deal with reverse mortgages that tries to say otherwise, who very likely works in the reverse mortgage industry.
@@ppen62 -- Your comment makes no sense.
@tylerthorn3303 - perfectly said.
Well, it's great to see Ramsey still slinging the same inaccurate misleading poo he did years ago. It's quite irresponsible to paint the current reverse mortgage industry with the same broad-brush for the sins of the old days. Reverse mortgages are not filthy. A reverse is awesome in some situations (like mine). No. More. Mortgage. Payments. Forever. And don't say I should refi cash-out or get a HELOC. Those are real debts that have to be repaid monthly. For me, all those fees and interest you gripe about won't be an issue since I'll be dead. Just like money, you can't take debt with you either. And my heirs will still have at least $1M-$2M left in equity -- even if I live to be 99 (63 now).
But I do agree that a reverse is not for "Mark in Missouri". First and foremost, he's too young.
Don, how long have you been selling this garbage? Basically the change is: Lipstick on a pig.
I agree with you on all points Don
He was (and is) rather arrogant at times. Why insult when giving an answer to an earnest question? IMO that's a standard thing with him. For me, really offputting. He could be stating the perfect solution for me but because it's from him I'm not comfortable going with it. Luckily, I have no life-or-death situations that need his advice. I came here to see what he had to say on the subject of RM for my 70 y/o friend who's bedridden in her mortgage-free home. The commenters here provided better, clearer, and more helpful input than Dave did. js (PS: "Washed-up actors"--?? wow)
I love the comparisons with the snuggy and Fonzie.
We have all heard the saying that a financial institution will once in a blue moon do something nice for its customers, but that it always does something nice for itself.. Okay, now when it comes to a reverse mortgage, take that times 10. The fees will be high, the interest will be high, and then those closing costs....YIKES! More cash *logs* thrown on that burning pile of money. As a matter of fact, when people get knee deep into a reverse mortgage processing, they discover that the equity they might have in their home has less to do with it! Or, to put it another way, your possible, future finanial security can carry more weight than a respectable amount of equity in one's home.Remember, rhis is STILL a mortgage...Ans it iscYOUR mortgage, not tge lendibg instituruons. That equity, that the homeowner thought would carry so much clout, really does not. An individual applying for a reverse mortgage will be looked at and scrutinize and made to jump through more hoops than a first time millennial home buyer. It is a grueling process, and not for the faint of heart-. The underwriters want to know EVERYTHING about you. And the initiating loan agent is the car salesman, and his proverbial "Let me go talk to my manager" routine on steroids. And I don't care what glory days gone movie or television actor gives you the hard sell.. or what company stirs up fond television memories of watching a kindly Old Gentleman talk about animals on the Serengeti, on a Sunday afternoon.. or what company that's recently changed its name to a mode of space travel to sound more "hip" DO NOT BUY IN TO IT!. Those, whose loan does not go through, do not realize how lucky they are.
I generally agree with Mr. Ramsey, but not on this. In the mortgage industry, we are seeing a growing number of retirees - who own their home free and clear - struggling to make ends meet on just their social security. They may have a modest nest egg of cash and securities for emergency and medical issues, but why would anyone advise them not to use a portion of their home's equity to live a better life? It's as if Mr. Ramsey is saying you must leave your entire home to your heirs. Nope. The FHA-insured HECM is a very safe loan and it is changing retirees' lives for the better.
Seniors are going to have a very uncertain time with their health issues and may not be able to stay in their house. Once they vacate it, the RM company can take it.
Actually, once they decide to vacate the home, they sell the home, pay off the mortgage balance and keep the equity.
Given the massive interest rates, double or more of a traditional mortgage, you're far better to get a traditional mortgage and then invest that money but even that is a dumb idea
If my wife and I are, say 65, and want to boost our retirement with more money and the only source is our $750k paid for home - how do we enjoy the equity in the home in some way?
Sell it and move into a cheaper home.
So if you own your home that means you no longer want to have home owners insurance or maintain your home ? What ???
The example given is not what a Reverse Mortgage is all about. Reverse Mortgages are for fixed-income seniors who are feeling the squeeze in this economy, "Too much month at the end of the money". A economic group that Dave is not qualified to address.
Maybe that should have budgeted better when working!
But what if you're say in your mid 70's and can only afford to live/stay in the home by getting rid of the mortgage payment and getting added income to boot?
Then, you should consider a Reverse Mortgage. The reality is that 88% of our seniors want to "Age in Place" (meaning pass away in their home vs in a nursing home). If the senior did not set aside enough money, and most, if not all of their net worth is in the equity of the home, why not use it to help in retirement. I agree with alot of what Mr Ramsey says, I disagree with him on Reverse Mortgage's.
Mark just wants to enjoy that 32 year old, he's definitely not thinking things through.
What would happen to the house if both couples die , no children and no heirs? and there’s equity in the house? What would dave say ?
While reverse mortgages CAN be scams, this is NOT always the case.
Two years ago, my mother and stepfather called me up and they were upset. Their house needed EXTENSive repairs and they couldn't afford them. I considered just lending them the money but they are financially irresponsible and unreliable. Then I considered buying their house from them at a reduced cost and giving them "life estate". Then they could use the money to do the repairs and live on the rest. When I spoke to a lawyer about this, he said it was a VERY bad idea because purchasing the house at a reduced cost could be considered "elder abuse" if anyone contested it. And it would open me up to felony charges.
The lawyers suggested I give my mother and stepfather a reverse mortgage for the amount I would have purchased the property. That way I am protected both legally and financially.
So now I hold a lien on the property and they have a nice house and some extra cash.
Well put; "It's a filthy business" I compare it to timeshares. It is only sold to those who can't do the math. Lots of fees and interest to borrow your own equity. If you must borrow on you house, a traditional mortgage is superior. Yhe big attraction of a reverse mortgage seems to be the monthly payments to the owner. Some people know a lump sum will evaporate quickly.
Hi Mr. Smith, how is a traditional mortgage 15/30yr with a large monthly payment suitable for a retiree on fixed income? Do a bit more research on the reverse mortgage. I wish Dave would as well!
There are no monthly payments on a reverse mortgage.
Reverse Mortgages increase your debt substantially while reducing your equity substantially. Since you never pay off the loan, you pay a higher interest rate on top of high interest you already accrued on you debt.
Wrong. You pay nothing.
@@mweb1right. I really don’t get the hate people have for them. They all talk about the debt like you’re going to have to repay it. I don’t care if I’m 500k in debt to a bank when I die. I’ll be dead. Take the house I don’t care. People act like it’s some kind of accomplishment to die with half a million dollars of equity in your house. It’s really just money you’ve left on the table. You can’t bring it with you when you go.
@@OhYeaMista Yeah, this is where I don't understand the RM detractors. The question is "Is there a better way than RM for me to tap into the equity in my home?". Dave's answer: "Pay off your home, live a more meager existence, die with all that equity sitting there." NO! The discussion should be "Don't use an RM, use this other method to access the equity, here is a clear financial comparison of the two ..."
@@jabarebird I get what you’re saying, but there’s really only three ways to access equity: sell the property, HELOC, or reverse mortgage. If you want to stay in the house that leaves HELOC and reverse mortgage. If you don’t want to pay it back, that means reverse mortgage.
57 with 32 year old wife. nice pull homie!
Reverse mortgage is worst. They prey on old folk and market it like you never pay. Dave is right it’s a scam and you pay double.
The only thing a reverse mortgage is good for is the Bank and the next owner getting it through a quick sell possibly below market.
Can he rent it out and get the rental income instead?
Usually not. The house reverts to the reverse mortgage company if you do not occupy the house personally, after 6 to 8 weeks.
I’m 62 and am going to get one, I could care less what happens to the house after I’m gone. Poor little widows aren’t the only ones applying for these loans. If you own the home outright you still have to pay taxes and insurance or you will lose your house. Stick to counseling poor widows.
Exactly. The whole purpose of owning real estate is to take advantage of the appreciation and the equity. Happy retirement enjoy!
HE'S 57, HIS WIFE IS 32 ⁉️
Sounds like his wife is a gold digger!
Futurama covered this in Season 7 Episode 10 - Near-Death Wish. This industry preys upon the older generation as George said and it's slickening.
2:36 that’s their target demo:
Well yeah. They need the money and have the home equity. There’s a reason their target demo isn’t 16 year old kids.
Nor a 61 year old!
Wow that’s powerful knowledge
You just spent 1/2 your life paying of a fully amortized mortgage aka a simple interest rate of about 100%. Let us put you back in debt all over again!
Avoid debt. Cut cost. Retired with a 7 figure portfolio and Receiving about 30k in dividends. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. My investment strategy with my F,A Rita Wildrin Mora gives me the best returns even during recessions and market crashes. Its been a year of steady growth.
The FED has lost control. The market is now more volatile than I have ever witnessed before. no one knows the best financial move to be made at the situation.
Pretty impressive, I have been on the wrong side for far too long and I'm willing to make consultations to improve my portfolio. Can she help me?
@@jaynaparker8874 I just looked up the FA and found her web page. Surprisingly she seems very proficient, I wrote her and I'm waiting on her reply.
SPAM.
"Lets be clear.... snuggies are a good investement" made me lol.
My mother-in-law got a reverse mortgage at age 63, she got paid to live in her house and lived mortgage free. At age, 87 she sold it and walked away with $85,000 in cash. I dont see the downside of that?
What if your mother-in-law had declining health and had to move in with family or needed residential care around age 75 and had to vacate the house? She got a good deal because she beat the odds what for most is a terrible product.
Good old millionaire Ramsey telling poor old people to lose their homes because they can't afford a payment or taxes.
It worked for my parents. No mortgage payment for 25 years. Still in it as I speak.
She would sell and cash out.
Two years ago we converted our forward conventional mortgage to a HECM (reverse mortgage) which made it possible for us to sell our business, defer the $1250.00 monthly principle and interest mortgage payment and fully retire. We can now live the rest of our lives in our home without ever making another house payment! Reverse Mortgage is a GREAT option for people that want or need to use otherwise "dead equity" to supplement their retirement. We are still the deeded owners of our property and we can sell anytime we choose and would do it all over again if we had to!
So it's just like a loan?
It IS a loan...worse than a regular mortgage
@@Quinu12 That's exactly it. We become emotionally attached to our house and neighborhood. It becomes our identity. We need to remain flexible, reasonable, and adaptable as we age.
@@Quinu12 It's darn hard to move in your 70's and 80's!! My husband and I did it two years ago. The only place I weant to move to again is the cemetery.
@@Quinu12 Sweet of you to say that.
It is a loan that ends and you lose your home, another suckers bet.
A reverse mortgage is a predatory loan. DO NOT DO IT!
Financial elder abuse.
57/32 😆 must have a load of cash. Different kind of brag call.
Sounds like he's "in love" and wants to live it up.
62 / 24, hope I survive our honeymoon 😅
So reverse mortgages rate second behind time shares!
Entonces me muero de hambre para dejarles a mis hijos la casa 😂😂
Interest rates on Reverse Mortgages are NOT double. I have one. Best decision I ever made. Got cash out of it and removed my mortgage payment. Dave is wrong.
Dave, that's great information about how bad reverse mortgages are, but you're wrong on one point. Tom Selleck is not a "washed up" actor. Blue Bloods is still one of the best shows on broadcast tv today.
He is an overweight , has been. Once a actor is washed up , they start hawking any product they can, no matter how bad it is.
Wife inherits the House?
The wording says it all.
I die, my wife doesn't inherit, it is her house also
I would bet money the wife is not on the Title.
😢
The "Snuggie" has ruined many lives.
I can't believe someone has finally said this.
Haha, Mark has to go to desperate measures to keep his much younger wife believing that he is financially successful. He's not, baby.
Leave me out of this.
Our government protecting seniors, about as good as they protect our borders.
Build the wall 🤠
waRshed up lol
The amount of misinformation involved with Dave's podcast is stunning. His team of advisor's have obviously done no or little research of this Federally regulated and Federally insured loan. Why he can keep telling these lies is beyond me. He has 6 million listeners and he is allowed to lie to them. The unfortunate part is that this regulated loan can and does help tens of thousands of seniors stay in their homes for the rest of their lives. Just shameful. If he has the guts, he can reach out to me to find the truth instead of relying on interns "research" into reverse mortgages.
Dave, now you hush it 🤣. Tom Selleck is a star on a very popular current show.
Just because he has good caterpillar mustache...doesn't mean he's right. 😁
LTV is based on age
His wife is 32 years old and they have no kids. She can get a frickin job! It shouldn't be his 57 year old butt's job to worry about setting her up.
👍
You mean Tom Selleck is wrong 😂
You have to be 62 to qualify for a reverse mortgage anyway
Folks: No one is going to give you money for the fun of it. Never ever take out a reverse mortgage - dumbest thing I ever saw.
Suckers truly believe banks are their friends
I agree, but people still believe their student loans are going to be paid in full by the government! Logic and hard work is no longer in personal finance!
The caller was off base, too young for a reverse mortgage, gotta be 62, Dave and wanabee should have caught that,
Every positive comment here (in favor of reverse mortgage) was written by a crook that works in this shady scam industry.
Reverse mortgages the dumbest thing ever there's no Advantage over a home equity loan all that matters is the interest rate and if it's higher what will be the point of getting it
Line of credit requires good credit and income plus it adds to you monthly debt payments. Reverse mortgage is given to the poorest with no job and terrible credit plus it cancels the mortgage part of your payment. Add to that, you can get a line of credit to take whenever you need money and still never have to make a payment. Basically the lender (other than closing costs) must wait until the house is sold before they get there interest money. Yeah🤗
Please do your own research before putting more debt into your life with a home equity loan.
@@CertifiedGasSystems you can do any of that with a home equity loan I personally don't need one I'm just telling other people don't get a reverse mortgage is a scam well they are legal but I called them a scam a friend of mine's mother just lost her house because of one of those they could took it in a matter of months because she was in the hospital and recovering Center for a few months and didn't pay her homeowners insurance because she was incapacitated then they went and repossessed her house that she lived in for 40 years you need to read the contract when you sign for one of those they can put anything in it
@@CertifiedGasSystems personally I wouldn't tie any loans to a mortgage but that's just me but they're good to get when the interest rates were low
Unless the home owner has a huge life insurance policy!
Get your facts straight. Before you tell lies. You’re missing so much .
Oh and btw he was too young to get a reverse mortgage.
If he was 70 he couldn't because his wife was too young.
Reverse Mortgages is like an insurance policy.
Reverse mortgages are a good way to have a steady stream of money coming in. If you have no heirs, this is a good option. In essence, YOU are mortgaging your home to the bank. You stay as long as you want.
Did you even watch the video? That's not how it works. If things go wrong, you can lose your home.
@@jodylarson4697 I had the same thought - I don't think he watched it at all.
It's never a good option to do a reverse mortgage. Did you not listen at all? (Facepalm)
Makes more sense to reach baby step 4 and put ROTH and traditional IRAs (with your employer giving a percentage match on that traditional) like a boss...THAT plus your normal income is more than enough steady stream of income coming in.
@@linuxsurfer2002 He is another Saul, thinking debt products are the way to wealth
Good way to lose your house friend
almost all the facts Ramsey used is not correct on reverse mortgages, I suggest he becomes more educated before he gives advice...just an idea :)
Let’s look at what Dave does not tell you. He tells you to save what he calls money, which isn’t money at all in the United States. What we call money is actually currency that loses value every year. This is what Dave is wanting you to save…. Think of what a dollar was worth 50 years ago you could’ve bought a brand new 1971 impala for $3500.00
Today that same car cost $60,000.
That green stuff that you used in 1971 has lost that much value in 50 years and Dave tell you to save it and save it and save it. For what? If it loses that much value, why would you want to save it Ramsey is a fool. He suckers people into believing that what they call money is actually money when it’s not. it has no backing whatsoever and the more of it. It’s printed the less it’s worth and Dave says keep saving it. You are a fool if you do and you’re full if you listen to him.
…you don’t “just save” your money. You invest it, genius. That’s the entire point of saving money.
Notice that Dave never takes a letter like this from a single male in retirement, it's always from a wifed up sucker...
Horrible plan, horrible product, too much risk.
Research it more
@@the-hollywood-dog-says-6072 I did. You could lose your home and end up with nothing. Watch the video.
@@jimroscovius A home can be lost in many ways.
Watch someone besides Dave Ramsey.
@@the-hollywood-dog-says-6072 Dave Ramsey is a hack when it comes to mortgage advice. He's a dweeb. When your are 80, you can't take your grandkids to dinner or movie, you don't want to leave your home but have 200k sitting in your house. Imagine taking that money when you were 70, the last 10 years of your life could have been way better. If you have enough equity in your home you can have your taxes and insurance paid for with the equity, a bulletproof way to never lose the home. Yes, I am licensed to sell mortgages, but Dave Ramsey is not. He needs to stop, he isn't licensed and does not give great advice, lol.
I could show you calculations that a house value can appreciate faster than the balance on a reverse mortgage. At the point of selling the house & paying off the mortgage; the estate's equity in the house will be larger than in the beginning.
Also, if the housing market is down, the family or executor can buy the house for 95% of appraised market value. This is regardless of the mortgage balance.
Completely wrong, DR.
Tom and Henry have sold their souls.
Yeaaa thanks for the snuggy comment…lame O
I know that already mr know it all