A Quote by Suze Orman
If you can't afford the upkeep of your home, it makes no sense to do a reverse mortgage. You will just end up having to sell eventually when you realize you can't afford the home, and whether you have any equity left after the sale depends on the size of the reverse loan that must be settled.
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While a reverse mortgage can indeed be a viable way to generate income, it is very important to understand that after you take out a reverse mortgage, you will still be responsible for paying the property tax, the insurance premium, and all the maintenance costs for your home.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
You also need to understand that when you consolidate credit card debt into mortgage debt - like a home equity loan or a HELOC [ home equity line of credit ] - you're taking an unsecured debt and turning it into a secured debt.
A reverse mortgage is available to anyone who is at least 62 years old and owns a home outright, or has a small mortgage balance remaining.
Because the fees associated with a reverse mortgage are high, such loans make sense only for borrowers who expect to live in their home for a number of years.
When I'm bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stocks on a scale down, I buy on a scale up.
Potential home buyers have a two-step decision process. First, they determine whether they can afford to make a purchase - does their income safely cover their mortgage payment? Then they determine whether owning is a better financial choice than renting - are the costs of owning a home lower than the cost of renting it?
Unlike other loans, a reverse mortgage doesn't have to be repaid until the borrower moves out of the home or passes away.
At times it seems as if arranging to have no commitment of any kind to anyone would be a special freedom. But in fact the whole idea works in reverse. The most deadly commitment of all is to be committed only to one's self. Some come to realize this after they are in the nursing home.
For most, the largest asset is their home. This becomes a sentimental issue, I know, but if you're holding on to a home that you can no longer afford - or you need the liquidity - you need to think about solutions. One might be to bring in a tenant or roommate; a more drastic measure is to sell the home and downsize.
Number one, you can sell before you buy. I call it reverse e-commerce. You take a picture, you list it for sale, you sell it, you collect the revenue, then you go buy it and send it to the customer.
Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, "The house now is worth less than the mortgage I owe. I think I'm just going to move out and buy a cheaper house." So it's very risky when you have only a 3% or 3.5% equity for the loan. The bank really isn't left with much cushion as collateral.
Tonight, more Americans are out of work and more are working harder for less. More of you have lost your homes and even more are watching your home values plummet. More of you have cars you can't afford to drive, credit card bills you can't afford to pay, and tuition that's beyond your reach.
Generations of women have sacrificed their lives to become their mothers. But we do not have that luxury any more. The world has changed too much to let us have the lives our mothers had. And we can no longer afford the guilt we feel at not being our mothers. We cannot afford any guilt that pulls us back to the past. We have to grow up, whether we want to or not. We have to stop blaming men and mothers and seize every second of our lives with passion. We can no longer afford to waste our creativity. We cannot afford spiritual laziness.
I toured a lot in the U.K. and Europe solo for a lack of funds, really. I left people I'd been playing with for years at home, just because I couldn't afford it.
The most troubling loan we had was actually to the 'Octomom'. That was a terrible situation, and we worked very, very hard to move her to another home that they could afford.
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