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Conference nyoss1::market_investing

Title:Market Investing
Moderator:2155::michaud
Created:Thu Jan 23 1992
Last Modified:Thu Jun 05 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:1060
Total number of notes:10477

717.0. "Reverse Mortgages?" by NODEX::CLBMUD::Conferencing-User (Pat McGreal 296-5737) Tue Apr 26 1994 10:08

Hi,
	Does anyone know anything about "Reverse mortgages"?

	This is where somewhat similar to a Home Equity Loan except
	that you don't have to pay the loan back (or make any payments)
	until you sell your house.

	It's used primarily by older retired folks who don't have much 
	savings but need to supplement their fixed incomes.

	Also, might you know of any banks that offer them?

	Thanks.

	Pat
T.RTitleUserPersonal
Name
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717.1Just heard of, myselfSTOHUB::SLBLUZ::WINKLEMANbuy seeds, sell treesWed Apr 27 1994 18:296
The WSJ had an article on reverse mortgages within the last
week or so. (Page B1, I think).  I had never heard of them
before that.

-Austin
717.2My 1.5cents worth ......POBOX::PATELFri Apr 29 1994 02:5025
    I know just a little bit about it.
    
    It is a very simple way for a small percent of the Retired Population
    to cash out on their homes.  The way it is done is simple.  The bank
    finds out how much your "paid off" home is worth - Then they calculate
    the number of years this person can potentially live (using past data
    of average life of humans etc).  Then they will find out what this
    older person needs ($ per month) and they will start paying this
    person that amount for the predetermined number of years.  At the end
    of those predetermined years, the bank wants to either get repaid that
    sum or own the home or continue on with another payment schedule.  
    
    It is called reverse mortgage accordingly since the bank is paying you
    for the home and owning it slowly instead of common debt laden folks
    like most of us who pay the bank for years and years and years to come.  
    
    This is a perfect fit for the few who do not have family or who choose
    to live off of their paid off home (since they worked so hard for it). 
    
    More details from Local Library - Since I am at the bottom of my pit in
    details - I did not research the many "what ifs" that arise from some
    open issues left out above, so I'm very little help beyond this point. 
    
    Ken