[Jim727]

This is a subject that raises my blood pressure to stratospheric levels.

There may be better reverse mortgages but I strongly urge caution to anyone considering one. My father-in-law took one out on a home with substantial equity. It was really their only asset and he didn't "need" a huge chunk of cash so he did the reverse mortgage thing. We offered to loan him the money, but....

So, the reverse mortgage is actually a negative amortization loan. There are no payments, so the payment is added back into the loan principal each month. Doesn't take much thinking to realize that the outstanding mortgage is going to grow at an ever-increasing rate. I forget the actual figure at which he would have had zero equity left in the house, but it was under ten years.

But you can stay there forever, right? Maybe. There's always fine print. In his case, if they had to leave the house for over 30 days they lost the title. After he passed away, we had to do a very quick sale on the house to pay for my mother-in-law's nursing home care. There was frighteningly little left.

Note that these are not my interpretations - we took the docs to an attorney because we needed to formulate a plan to pay for her nursing home expenses. It would be an understatement to say that his words regarding reverse mortgages were "unkind". A far better option would be to take out the biggest 30-year fixed mortgage possible, invest the cash, the draw against the account for living expenses and mortgage payments.

Minimum for considering a reverse mortgage should be:
1) An attorney review of the "fine print";
2) Accurately calculate the zero-equity point;
3) Assess your options for how you are going to pay your bills after hitting the zero-equity point;
4) Consider (1) again, especially with regard to conditions - such as medical - which might not permit occupying the home for more than short terms;
5) Finally, don't do it.

As I said, maybe there are better reverse mortgages out there. Maybe there are even some good ones; however, my direct experience indicates that the peddlers of reverse mortgages are predators for whom boiling in oil would be far too good a fate.