On Sun, 31 Aug 2014 00:40:45 +0200, nestork
wrote:


'Bob[_66_ Wrote:
;3278158']
Never give up control of something you own. Run away as fast as you can.

That's exactly why I don't like these "reverse mortgages" you hear
advertised on TV. Basically, you sell half of your house back to the
reverse mortgage company for whatever the price is NOW. Then 20 years
from now, when you pass away, your estate only collects half of what the
house sells for. The reverse mortgage company you deal with pockets the
other half.

I see your point, but what if your income from pension etc. is
inadequate to meet your needs, and the only asset you haven't sold is
your house and your car, and you don't want to move.

I know, at least I'm told, it's expensive compared to what one gets just
selling his house, And I expect they give you a monthly check which
never goes up while inflation raises other prices.

But what is better for someone who doesn't want to move?.

The only alternative I can see is to try to get a regular mortgage,
probably hard to do when your income is too low for you to live on. But
if you could get the mortgage, say 100,000, and you put 50,000 away to
make mortgage payments with, you'd only have half the money also. Then
every month you'd make the payment and the amount you owed would go
down, and if you lived 15, or 20 or 30 years longer (depending on the
term of the mortgage) you'd own the house again completely. And you'd
die with a 120,000 asset, while living short of money all those years.

With a reverse mortgage, you die with nothing, because yo've spent it
all, but you don't have to worry about running out of money as long as
you're living, because the mortgagee (plus your pension and social
security) pays you as long as you live.

I really want you're counter arguments.

I think I have enough money to last me for the rest of my life if I
spend down the principal too, but the problem is I don't know how long
I'll live.

I don't want to run out of money early-- that would be horrible -- , and
I don't want to live a scrimping life and then leave too much to my
niece, nephew, and charities.

People can have this problem at many levels of wealth. Not just poor.
Wealthier people just have different views as to how low a level of
their spending is oppressive. People with no children, or children who
already have, say , as much money as their parent does, don't want to
leave a lot of money behind,

Micky




Maybe tomorrow I can reply to the rest of your post.

When I was a kid, people built houses for $25,000 dollars. Those same
houses are now selling for 10 to 15 times as much.

People buy houses now presuming they're going to increase in value, and
it's exactly that presumtion that causes prices to go up on houses.
Each buyer figures he'll get more when he sells it than he paid, and so
the prices continue to rise with every flip. But, that situation is
unsustainable. Once the baby boomers that were born after WWII start
going into the nursing homes and cemetaries, their homes are going to go
on the market, and there will be a glut of houses flooding the market.
Then, prices will start falling, and all of the people that bought
houses as investment will try to sell them for what they can get, and
that will cause the situation to get even worse.

If people considered houses to be a commodity, which is what they are,
which is something you buy as you need it, like food, clothing and fuel,
there wouldn't be the steady increase in housing costs that attracts
investors, and there wouldn't be the volatility in housing prices that
we see.

Back in 2008, there were thousands of people that bought houses on a
"teaser" zero percent mortgage. The mortgage would stay at 0 percent
for three years, and then jump up to 6 percent. Lots of people figured
"Great, I'll just keep this house and let it appreciate in value for
three years, and then sell it." It was those same people that are now
deeply in debt because their mortgage went upside down. The value of
their house fell below what they bought it for, and now they owe the
banks money on a house that's been foreclosed on them. Terrible
investment.