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My parents just retired - should I set them up with a reverse mortgage?

My parents just retired and are doing well healthwise. I know they would like to travel and such, should I set them up with a reverse mortgage? What are the pros and cons of a reverse mortgage?Do I have the authority to set one up for them? by samueljohns from Oklahoma City, Oklahoma. Jul 18th 2013 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,558 contributions

If used properly, a reverse mortgage is a great tool to increase your income for retirement. But, not every retired person needs a reverse mortgage.. In general, an RM is a loan product where if a borrower has a home paid, they have several options available to them to be able to tap into that home equity, without having to move or sell their home. There are many scenarios that can utilized using a RM. They can get a lump sum of cash to make a major purchase, and will not have to make monthly payments. They could receive a monthly check every month to do what they wish, or if they have a loan against the home now, and they have 30% equity or more, they could eliminate their monthly payment altogether. If they wish to purchase a home, they can put 30% down, and never have to make a payment.. So there's really all kinds of ways to make this loan product work. The best advice I can give you is to contact a local reverse mortgage specialist and have a meeting with them. they can look at your folks complete profile and help you make the right decision for their particular scenario.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jul 18th 2013
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Adrielle Edwards (AdrielleEdwards)
#906 ranked lender in California - 96 contributions

You cannot set it up for them but I would encourage you to be involved in the process and help them make the right decisions for their future. First, you will want to discuss with them exactly what their goals are and then discuss this with a reverse mortgage specialist to see how a reverse mortgage can help them meet their goals. The most notable pro is that they have an extra source of cash during their retirement to do with as they please and the most notable con is that taking out this cash diminishes their equity in the home.

Jul 18th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#2 ranked lender in Florida - 2,240 contributions

You really need to speak with a local mortgage pro and go over the whole situation. No you can't set it for them, but you can help them. Most important what are your reasons for wanting to get them a reverse mortgage? Do they want to access their equity? Do they want a monthly stipen? Do they just not want to pay a monthly mortgage payment? The pros and cons will fall into line based on their needs.

Jul 18th 2013
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Jason Vondrak (jvondrak)
#218 ranked lender in California - 1,741 contributions

Are your parents both 62 or older? They will need to be at least 62 years old and need to have equity in their home in order to qualify for a reverse mortgage. I would recommend sitting down with both your parents and a reverse mortgage experts to go over all of the pros and cons and determine if this is something the will truly benefit from.

Jul 18th 2013
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Jackie Stults (jstults)
#40 ranked lender in Illinois - 15 contributions

Whether or not to make a reverse mortgage part of their retirement plan is a big decision. They would have to apply for the reverse mortgage themselves, but adult children are always encouraged to be a part of the process including the mandatory counseling with a HUD approved agency. The pro's are that they can use some of the equity in their home now to better fund their retirement without having to meet the strict credit or income guidelines of conventional financing or having to take on decades of monthly mortgage payments. They retain title to their home and the reverse mortgage remains in place as long as at least one of them continues to live in the home as their primary residence.There are many consumer safeguards including that your parents or the heirs to their estate can never be liable for more than the house is worth at the time the reverse mortgage comes due. The con is that there will be less home equity available at the time the house is sold. For a complete no obligation proposal feel free to contact me at 800-486-8786 Ext. 702. Have a great day, Jackie.

Jul 18th 2013
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Linda Miller (Linda Miller)
#2 ranked lender in Utah - 566 contributions

A reverse mortgage can be a great option under the right conditions. As mentioned in other comments, find a local mortgage professional who specialized in Reverse Mortgages. You should be a part of the discussion and can help advise them but they have to qualify on their own. good Luck.

Jul 18th 2013
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

A reverse mortgage used as a line of credit can be a great tool for retirement financial planning. They will have to attend a counseling session, which can be done by phone, and sign all the required documents. You can not do this for them, unless they are seriously disabled, which does not appear to be the case.

Jul 18th 2013
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Chip Streater (TarheelChip)
#4 ranked lender in North Carolina - 6 contributions

Reverse mortgages are not a one size fits all solution for seniors. I suggest starting with where FHA makes the borrower(s) begin anyway. Find the your local FHA approved reverse mortgage counselor. This is not a sales meeting with a loan officer where you hear everything you want. This is mandated by FHA before the mortgage file can be underwritten. Attend the Q&A session with your parents. Think about it for a number of days or take up to a year, because that's how long the completion certificate is good for. Make an informed decision that fits current and long term goals. Summary: Get educated and you will make a better decision.Best Wishes!Chip Streater

Jul 22nd 2013
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You will not be able to set it up. I would recommend based on doing these that you check it out as an option for your parents. I did one for a gal here locally and she said it set her free! We all want that for our parents. I can do those nationwide. Take care!

Jul 23rd 2013
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