Is a Reverse Mortgage Right For You?

" Well speaking of getting your money out of your house reverse mortgages growing in popularity but are they safe. Who they are ripe for it away and is Jim Randall real estate investor and author of this skinny. On the housing crisis could. They're everywhere in terms of advertising for them that -- how many people are they really like -- who they write for."

" I think they're right for someone who's in a bit of economic duress has a lot of equity has a very lower nonexistent mortgage. And once there they understand the cause they understand what they're doing. And needs to get some money out of their home that. Comes at a cost but it's money and you don't need to have borrowing power and the lender won't even check your credit score with a look at that is of value your home. In your life expectancy in their sand. You know follows. South when do we get our hands and -- how much will -- be worth."

" That they're only for people 62 years of age or older so you have to have little or no debt and the home and it just sounds like. This is an area that is ripe for abuse. And so how much says it could would somebody expect to pay to do reverse mortgage. I think on average the closing costs and not insignificant amount 5%. Of the debt amounts so that's a lot of money."

" Okay facility you're 65. And -- a reverse mortgage for 200000 your house is paid off and its appraised at 250 or whatever you do reverse mortgage for 200 could you want the monthly income and you might not get that much but. Okay so let's say under the house okay all right and you passed away in a year. Okay now you've already taken out the mortgage for the hundred but -- evil extracted 20000 dollars. What happens to the debt and who owns the home. But you lose control the home even know you didn't it didn't get the whole 150000. Now that go on -- not your areas of activity equity you're failures could sell that house. And they would take out. The amount you didn't draw down so people they take that out -- would just roll he's you don't saying would roll back into the equity of the home as if you never used it a credit line you you didn't draw."

" Yet that's what it is another -- interest of course. The time had them on the interest is incurring them what you -- true but the -- the party didn't withdraw rolls back into the equity house. How is this not. The same and why isn't say home equity line of credit or low -- you lock why isn't that a better option for people who need the money. It is if you have the borrowing power remember this is -- that works. What do you have an income monopoly have a bag curtains -- if you can get a home equity boom because you have borrowing power you're better off."

" You know. I just wonder why people wouldn't sell their home. If that and I is it because up a you know that made it feel like he can't or. You know because not going to be capital gains it has presumably it's paid off they've owned for more than two years they seem like at a live somewhere. But as it's smarter to sell the home was so you make 200000 dollars and then rent. A place. And not pay the 5% closing cost any interest."

" Well first of all saleable homes expensive more expensive than getting a reverse mortgage is the brokerage -- along. Will dwarf the expenses you're paying a reverse mortgage but also take into account interest. Well the closing cost the reverse mortgage. Versus the closing costs and other expenses selling home and moving elsewhere. You're going to pay more if you sell a home but we also have to factor in the emotional attachment that people have to their homes now you're talking about people in their sixties and seventies. They're comfortable on our homes are comfortable in the neighborhood. It's not always an economic decision."

" I know I understand that I have but I was just I'm approaching from an economic point of view I mean if it's a 5% closing costs and realty fees 5%."

" Depends you got conveyance taxes to wherever sustain it is you got legal fees you got escrow charges. The sales expenses will be more than -- closing costs are getting reversed morning what happens at home appreciate significantly. Do you warrior -- keep up area. Mean reverse mortgage -- lender. Does not. Benefit by the appreciation yours and get whatever appreciation might be the one thing people ought to be wary of the days. It's that. And once you borrow that interest is accumulating in its compounding and if you need the money later moved into an assisted living facility. We want to leave something here -- That is scary. Jim thank you Jim -- real estate investor author of the skinny on the housing crisis thanks so much to."