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Originally Posted by eurobounce
Bold--I about flipped when I heard of this 7 months ago. I never heard of it until then. I have been researching and talking with other people who know Reverse Mortgages and boy what a great idea. I pumped a good deal of money into this company (I own 27%) and I think it is going to be awesome. What is awesome is that HUD makes up any short-sells. It is a win win deal for everyone (accept for the people who stand to inherit the home). But screw them. I actually got my grandmother to do this so she wouldnt have to struggle from month to month. She took a lump some of $80k. She has $20k in her bank and then we got a CD for the other $60k. It really lessens the stress for older americans.
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actually a better idea is to take out a mortgage or refinance, that way you do not sell your house while you are still living in it. the relatives get a chance to decide if they want to keep the house, and further, some may want to live where they grew up when the older person passes. reverse mortgages are by their very nature dangerous. they are ways to get people to commit to a sales price before the sales price of the surrounding homes are known. you could agree to a price in 2005 and in 2010 the price could have doubled due to inflation or a general increase in damand. not to mention the psycological effects of having title to your home all your life and then suddenly your are a defacto renter. bringing a stranger into partner with your grandparents in the title to the family home is not a good idea. get asecond mortgage instead, do not release the title or rights to the title of your home to anyone ever.