Let’s say you’re 62 years old. And let’s say you don’t want to eat dog food and beans in retirement. Or you just want to have more fun which all baby boomers want to do. Well, go straight to the bank and get $741 a month for life which is what you can get with $250,000 equity in your home and a reverse mortgage. (The term “reverse mortgage” is actually kind of misleading. “Mortgage” is Latin for “dead pledge.” The loan or “pledge” dies with the last payment. With a reverse mortgage the pledge lives as long as you do.)
Now back to that $741 a month. That bit of info comes from http://rmc.ibisreverse.com/rmc_pages/rmc_aarp/aarp_estimates.aspx. It’s a reverse mortgage loan calculator at the AARP website. Yikes! AARP!!! Yeah, get over it. As a baby boomer you’ve been getting barraged with their stuff since you were 50. But I digress.
Someone at Wikipedia said that more than 90 percent of reverse mortgage borrowers surveyed by AARP said they were satisfied. And who wouldn’t be? I lied when I said it was free money, but hey, it’s only your kids’ inheritance. And what’s better for you? A no fun retirement, just scraping by wondering if you clipped enough coupons for this week’s supply of pet food helper? Or $9000 a year for dinner out on senior day at IHOP plus a nice vacation or even, yes, a new car! So what’s the catch? Nothing.
Actually there are several catches most having to do with your whiney heirs. As their inheritance shrinks they may be inclined to consider euthenasia which in most jurisdictions is called “murder.” Just kidding! Why would your loving children resent their baby boomer parents playing more golf, drinking fine wine, and visiting Costa Rica for a cheaper retirement place to live? They would???? Well, all the more reason to do it!
OK. Here’s the fine print or some of it anyway. People on public assistance such as SSI (supplemental security income) could lose their monthly government checks. And it could affect Medicaid. So if you own a home and receive public assistance of any kind don’t go to the bank for that “free” money just yet. Call the Social Security Administration at 1-800-772-1213 and pester them with your questions about reverse mortgage money. But if you aren’t on public assistance the fine print is mostly about fees to get the money rolling in.
Por ejemplo. (That’s Spanish for “take a look at what might come next”). The banksters charge money to set the whole thing up. And they want to know what condition the property is in. And they want to know who really owns the house. And they want to know if you can otherwise afford the home. Ever here of property taxes, insurance, and utilities like, you know, water, gas, and electricity? And you’ve got to go to a HUD approved counselor so that you understand what you’re getting in to. But for the most part that’s it. The banksters don’t really care what you’re credit score is. It could be zero for all they care. They get your house as collateral.
See how easy it is to get more money? Of course, instead of building equity in your home you are reducing it. But let’s just say the value of your home goes up? (I’m just sayin’. In today’s world rising home value is a joke). With increasing value at least two things happen: The bankster’s collateral is stronger (which you don’t care diddly about anyway). And your kids still have an inheritance! Voila! Everybody’s happy. You’ve got more money to fritter away like you did when you should have been saving for retirement. The bankster is happy because the chance they’re taking that you might actually live to be 100 and they lose money on the deal is less likely to happen. And the kids are happy. Not because you’re retirement is more fun, but because your demise (that’s Latin for dirt nap) means they get a little something more to fritter away, too!
Want more information? What am I? Your mother? Google it up yourself. Start with “reverse mortgage.” And start with Wikipedia before clicking on all the lenders and other come on crap. Then expand your search with the words “scam” and “review” and “diddly” if you want. And don’t foget to leave a comment on The Boomer Post blog page.