Reverse mortgage as a borrowing option
 

We need to do some work on our house. Up to this point we have spent out of pocket as we could afford it for new windows, insulation, roofing. Now we want to do siding, restructure the greenhouse into a closed storage facility and renovate the kitchen.

Since I would like the kitchen sooner rather than later, we are exploring options to finance this part of the project.

Options we are investigating are home equity loan, home equity line of credit and reverse mortgage.

I would like to hear of anyone's experience with a reverse mortgage, positive or negative.

Thanks so much,
Deb

I think reverse mortgage you own your home but can't sell it unless you pay back the payments plus a lot more. It's big financial decision. The house goes to the lender if you have to move due to health or older age. I would get a lawyer that specializes in that before taking the word of a lender. I would borrow on a low interest credit card before taking out an equity loan.

Home equity loans or line of credit are a lot less expensive than reverse mortgages. Reverse mortgages orginated as a product of the payday loan industry .... which should be a warning for homeowners. So many older people have gotten into trouble with the lure of money for their home not realizing the price they are paying in the long run. Reverse mortgages benefit those who know how long they have to live and need money now. Their "promises" are just the bait .... be aware!

I second BellaBoo's advice. A specialized attorney that is very versed in all the gimmicks and language of this big push on reverse mortgages is good. Also don't forget that the home improvements may give you tax credits that helps you in the end.

My husband was a mortgage broker and he never had any good things to say about reverse mortgages. He tried several times to help people get out of them. I think they may be useful for people who have no other options, but they probably shouldn't be your first choice.

my understanding on those type of loans was that they give you money and then tell you how to spend it on fixing your home! but some people were fine with that. take it slow.

Also reverse mortgages do not give you anywhere near the value of your home. More like 10-20%, I think.

yep, I looked mine up and wouldn't even get half of it's worth. If I spent that on fixing all that is needed, nothing would be left and i'd have to live here forever.

Please do NOT do a reverse mortgage. My sister did this and she now cannot afford to get herself out of the situation. She owes more, much more, than she originally borrowed. It sounds great but remember that they are charging you interest on the money you get and at the rate that her's has gone up, she will never get out of it. I love the way they tell you, you still own the house. Yes, but only if you can pay them back. Do your research. If you can swing a home equity loan, you will be better off.