posted
I heard something at our BNI meeting last week that blew me away. Our resident independent mortgage guru told us of a connection he has to obtain "reverse mortgage" loans from certain financial institutions. (not all banks offer this type of loan)
If you are 62 and own your home, you can get a check from the bank every month, and keep your house.
Let's say your house is worth $100,000. You could get a check for $1000 a month (maybe more) on a reverse mortgage loan.
When you decide to sell your house, that's when the bank gets paid back. In 10 to 15 years, your house will probably be worth even more, and you'll be ready for the old folks home.
But you older sign guys could still run your business, get a check from the bank every month to help out with the expenses.
Check with your local mortgage gurus to see if this program is something they can arrange for you or I'll put you in touch with my guru!
just sharing!
[ January 07, 2006, 01:57 PM: Message edited by: Dave Draper ]
posted
1000 a month times 12=12,000 per year times 9 years=108,000 that uses up appreciation besides..the bank will never loan you full value... so now ..if you survive 12 years where ya gonna live then?
quote:Originally posted by Dave Draper: I heard something at our BNI meeting last week that blew me away. Our resident independent mortgage guru told us of a connection he has to obtain "reverse mortgage" loans from certain financial institutions. (not all banks offer this type of loan)
If you are 62 and own your home, you can get a check from the bank every month, and keep your house.
Let's say your house is worth $100,000. You could get a check for $1000 a month (maybe more) on a reverse mortgage loan.
When you decide to sell your house, that's when the bank gets paid back. In 10 to 15 years, your house will probably be worth even more, and you'll be ready for the old folks home.
But you older sign guys could still run your business, get a check from the bank every month to help out with the expenses.
Check with your local mortgage gurus to see if this program is something they can arrange for you or I'll put you in touch with my guru!
just sharing!
quote: where ya gonna live then?
This is true. I bought a shack in 92' Should be paid for in about 2 years with the "accelerated" mortgage plan. Unfortunate thing is...my "shack" is worth about $30.000.00 less now than it was when I bought the stupid thing??? I guess I purchased on the wrong side of the tracks? Even though I've sunk a fair bit of coin into the dump, it still ends up worth less than it really is. What I get a kick out of...is the fact that my insurance company still keeps raising the premiums because "don't ya know...all real estate appreciates in value"...ahahahahahahahahahahahahahahahaha.
Maybe in a 100 years, when I'm dead and gone, I might break even. Maybe then I can come back and haunt the place and call it my own?...with a couple of extra "ghost bucks" in my pocket...hahaha
Ahhh well...at least the cat has a place to sleep tonight.
-------------------- Kim Vlahovich Valachi Signs 25 Ryan Avenue, North Bay, Ontario valachi@sympatico.ca Posts: 9 | From: North Bay, Ontario Canada | Registered: Nov 2001
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posted
Actually Reverse Mortgages are a great thing for retired people who do not plan to will their home to their children, or who wish to reinvest that money, there actually have been people who have benefited financially by reinvesting the monthly income. I don't know much about it but my mother lives in a retirement village and alot of the residents are beginning to go that route. My mother is researching it, probably a bit slower than I think she should be, but she is looking into it. It sounds like a good deal to me so far, especially since I have no intentions of moving into her place someday. The whole thing eliminates the job of having to sell off the property, the sale of the property becomes the banks job, and I'm not sure, but you get to split the remaining income with them based on some formula. I'm told its a no lose situation for the family as long as the bottom doesn't fall out of the market.
-------------------- Harris Kohen K-Man Pinstriping and Graphix Trenton, NJ "Showing the world that even I can strategically place the pigment where its got to go." Posts: 1739 | From: Trenton, NJ, USA | Registered: Jun 2001
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quote: I'm told its a no lose situation for the family as long as the bottom doesn't fall out of the market.
... or you don't live too long! (as Boone pointed out)
I'm sure it could be a good idea for many... but as far as going out to "Check with your local mortgage gurus".. I'd be more inclined to first check with some financial advisor who doesn't sell reverse mortgages for a less biased opinion.
posted
I am in the midst of researching this for Murray's sister. In Ontario, she can access up to 75% of the appraised value of her home. This can be take as a lump to do as she pleases, or can be converted to a RIF and taken as a monthly pension. All non taxable, 'cause the home is her principal residence. Any interest on income from invested money would be taxable. She will remain the registered owner of the home, with a mortgage registered against it. She will continue to pay the taxes and insurance, etc. When she is ready to sell her home, it will go on the market, be sold,the reverse mortgage will be paid and any balance will be payable to her (or her estate) - if the home is not worth the balance, the bank loses (like they ever do!!)They generally win, many people actually use the proceeds from the mortgage to make improvements to the home - making the bank's asset more valuable. It does not work well for those who want to leave a home to their family (although they could buy it) but does free up cash for living now. According to our financial advisor - there is only one company in Canada that offers the plan (the famous CHIP reverse mortgage with Gordon Pape from the info mercials- but it is available through all 5 big banks.Seems like a good deal for the some people - but always get independant advice from someone who is not trying to sell you a product! Debbie
-------------------- Murray MacDonald OldTime Signs 529 Third Ave S Kenora, ON. P9N 1Y3 oldtimesigns@gokenora.com Posts: 781 | From: Kenora, ON | Registered: Jan 2003
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posted
We did a reverse mortgage on my mother's home in rural Michigan about four years ago. Her health was failing at the time and she required live in help 7x24. The help got expensive and this was the best the way to pay for it.
Mortgage was arranged in such a way that we could draw as little or as much as we wanted every month as needed. The "rules" allowed us 12 months after she left the house to sell it and repay the outstanding mortgage. My brother, who sells real estate in the community where she lives, put it on the market and managed to sell it (for less than he thought it would bring)a couple of months before the time limit was up. Paid the bank back the outstanding amount and the balance became a small estate to be divided between 5 siblings.
The part that I found difficult to accept was the interest. As you draw money on the mortgage the bank keeps track of the interest it earns them and adds that on to the amount to be repaid. After several withdrawls that monthly interest starts to add up and the pot diminishes rapidly.
On balance the reverse mortgage was a good solution to a delicate medical/financial situation. In the end I hated to see the family home go to someone outside the family. It had been the family home for 55 years and I was raised there. No one in the family was in a position to make use of it after my mother left. If anyone had been I would of bought it in a heartbeat and rented it to them. The reverse mortgage concerned me a lot for the period of time the house was empty and the interest just kept piling up. Now that it has sold and someone else is building a life in it and giving it some TLC I have come to accept that the mortgage allowed my mother to stay in the home, which she wanted to do more than anything else, until her last few months on this earth.
-------------------- Chuck Churchill, It's A Good Sign Inc. 3245 Harvester Rd, U-12 Burlington, Ont. Phone: 905-681-8775 Fax: 905-681-8945 Posts: 633 | From: Burlington, Ontario, Canada | Registered: Nov 1998
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posted
If the resident of the home dies the bank doesn't suddenly become the owner. It's not like defaulting on a loan. Like Chuck had said, they give you a set amount of time to get your stuff out of the home and then they get to sell it off, you get whats left of the money after they get theirs. Its a good situation for some but not so good for others. I would guess it depends on their financial worthiness.
Reading Chucks story makes me want to ask some questions that I never thought of before today though. But all in all, it sounds to me like this was probably less painful in the long run for Chuck and his family. (they didn't have to fight over the house, that is a great thing after losing a family member)
-------------------- Harris Kohen K-Man Pinstriping and Graphix Trenton, NJ "Showing the world that even I can strategically place the pigment where its got to go." Posts: 1739 | From: Trenton, NJ, USA | Registered: Jun 2001
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