# reverse mortgage question about the monthly payment plan



## JR12345 (Nov 6, 2013)

If you are due a lump sum of say $25,000 from your reverse mortgage, but you decide instead to take monthly payments, how much would each payment be (or how is it calculated)?  Thanks!


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## GDAD (Nov 9, 2013)

JR: For a start no one can calculate that>>unless they have the interest rate at which the monies were borrowed & over what period of time.
     Here in Australia on your statement you would have a minimum payment & the time it would take for you to pay to your loan.
     Personally I would not take out a reverse mortgage loan.


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## JR12345 (Nov 11, 2013)

g'day gdad - since a reverse mortgage monthly payment does not stop until your death, I wondered how they can convert a lump sum amount into a monthly amount.  Also, would you say that a reverse mortgage is better than foreclosure or a short sale??


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## rkunsaw (Nov 14, 2013)

I can't think of any circumstance where a reverse mortgage would be good. There are several companies advertising them heavily right now so that should be a clue. 

Companies advertise products they make money on. They don't spend advertising dollars to help the public. At the rate they are advertising they must be making a lot of money.

I don't know your circumstances ,of course, so I can't say what would be best for you.


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## JustBonee (Nov 14, 2013)

I don't know much at all about reverse mortgages, but something has told me, ever since I heard of them,  to stay away.

Like Larry said, too much promoting has to be a warning.


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## drifter (Nov 25, 2013)

I had a neighbor who was going to get a reverse mortgage but the fees and handling charges were too steep and she backed out on it. He house was valued at 76,000. She got a loan locally and and put about 3000. in to remodeling her bathroom and sold it for 90,000. and moved into assisted living. Generally speaking, a reverse mortgage heavily favors the lending company. It's the reason they do it and advertise so much.


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## RedRibbons (Feb 15, 2014)

I would never do a reverse mortgage. The lender basically owns your house from then on, and your heirs cannot inherit the property. The bank takes possession once you die, sells it and keeps all the profits.


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## i_am_Lois (Feb 15, 2014)

I read this on a site called dummies.com. It explained what a reverse mortgage is. Here is what was said about the negative aspects of reverse mortgages:

[h=2]Negative aspects of reverse mortgages[/h] Among the negatives of a reverse mortgage are the costs involved. All  mortgages have costs, but reverse mortgage fees, which can include the  interest rate, loan origination fee, mortgage insurance fee, appraisal  fee, title insurance fees, and various other closing costs, are  extremely high when compared with a traditional mortgage. Costs vary but  can be as high as $30,000 or $40,000. This cost is not paid out of  pocket, but rolled into the loan. 
 Another potential issue to be aware of is the requirement to pay back  the loan if you should permanently move out of the home. This may not  sound like a problem now, but if you ever need to enter a full-time care  facility, the loan would become due if you left your home for a year or  more. 
 The final downside to the reverse mortgage affects your estate. The  reverse mortgage will almost always decrease the equity in your home,  which will leave less money to your heirs.


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## fmw (Sep 8, 2021)

i_am_Lois said:


> I read this on a site called dummies.com. It explained what a reverse mortgage is. Here is what was said about the negative aspects of reverse mortgages:
> 
> [h=2]Negative aspects of reverse mortgages[/h] Among the negatives of a reverse mortgage are the costs involved. All  mortgages have costs, but reverse mortgage fees, which can include the  interest rate, loan origination fee, mortgage insurance fee, appraisal  fee, title insurance fees, and various other closing costs, are  extremely high when compared with a traditional mortgage. Costs vary but  can be as high as $30,000 or $40,000. This cost is not paid out of  pocket, but rolled into the loan.
> Another potential issue to be aware of is the requirement to pay back  the loan if you should permanently move out of the home. This may not  sound like a problem now, but if you ever need to enter a full-time care  facility, the loan would become due if you left your home for a year or  more.
> The final downside to the reverse mortgage affects your estate. The  reverse mortgage will almost always decrease the equity in your home,  which will leave less money to your heirs.


Let's shed some light on this.  Closing costs for a reverse mortgage are no higher than with a regular FHA mortgage.  One can expect to pay around 1% of the loan value.  That was our figure.  One must have insurance, of course, and the ability to pay for ongoing maintenance on the home.  If one needs to move one doesn't have to give up the home.  One can sell it, payoff the mortgage and move.  I agree that reverse mortgages aren't for everyone but fear mongering should be for nobody.  The article above is fear mongering.


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