*
BBB Marketplace Survival Guide
Whitney Quick

BBB Tips: Reverse Mortgages

Posted Wednesday, June 15, 2022, at 4:21 PM

Comments

View 1 comment or respond
Community discussion is important, and we encourage you to participate as a reader and commenter. Click here to see our Guidelines. We also encourage registered users to let us know if they see something inappropriate on our site. You can do that by clicking "Report Comment" below.
  • *

    Did some research on these as a possible additional lever to pull should the retirement glide path encounter future extreme unplanned turbulence causing a recalculation of cash flow balance.

    Simply appears to roughly parallel a traditional secured loan, using the home as collateral, interest charges racking up on money received, with an effective balloon repayment due when the mortgage-holder leaves the house.

    Freely-available specific information was disappointing and found to be quite limited, but it seemed the general theme was -

    One does not get access to all the equity in the house. Depending on age and the related expected remaining lifespan, current interest rates, and a few other factors, it seems only about 40-60% is on the table for payout.

    Interest rates were suggested to run about 1-2% above current conventional home mortgage rates.

    Somewhere in all the noise and confusion seems to be mortgage insurance (PMI) costs, as part of the upfront costs and/or interest rates charged.

    Whether this perception is right, wrong, or otherwise - agree that it's a way to get money, albeit coming across as an expensive way - so filing it here as a path of absolute last resort which is hoped to never get travelled...

    -- Posted by fxpwt on Thu, Jun 16, 2022, at 9:03 AM