Should We Use A Reverse Mortgage To Enjoy Retirement?

[@TheRamseyShow]

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[@kafizola5695]

The Dave Ramsey Show If a senior’s home is paid for and there is no other debt, is it advisable to sell home and move into a senior apartment where rent would cost about $800. per month?

[@tonyevan1241]

InstaBlaster.

[@SteveRam]

Me: read the title, know the answer, clicked to see Dave’s reaction on this one.

[@lovethemflowers]

@ Steve Ram - same here!

[@TheVacationQueen]

Same 😹

[@Roudter]

Yup...

[@arcticrest8368]

you're right about that Steve!

[@arleneaugustahair8393]

💯

[@666dynomax]

Why did I get the feeling the house was paid for when the call started. I suspect there’s more debt

[@kend9388]

There is more debt. She said they have some medical debt too.

[@666dynomax]

Kenneth Dye ohhh I think there’s a couple credit cards in the wallet too

[@kend9388]

@@666dynomax Lol I wouldn't put it past them.

[@tlwilson7379]

She was trying to hide a lot more debt. We all could hear it in her voice.

[@julslatt6294]

She forgot 😆

[@tomjones9490]

Sounds like her definition of doing "really well" is much different than mine.

[@bk_deltor9155]

$13,500 in 401k and savings combined at retirement age, $170,000 in debt left on the house and looking to take out money on the house. "living very well" is how she describes her and her husbands situation...

[@mysticaltyger2009]

Definitely not my definition of living well.

[@stevemyopinion423]

Deponds on how much her petitions are

[@rustyscrapper]

no kids either. Yes, they definitely LIVED well.

[@woxyroxme]

She must be on a lot of opioid pain meds

[@ourblazingworld]

@@stevemyopinion423 exactly. They probably have defined benefit plans, a foreign concept to most today. Some people can retire from gov't jobs at 100% salary after 40 years etc.

[@karenswidzinski6071]

How can she say they'll be "debt free" in 3 months if they don't own their home outright? That's a BIG debt!

[@randys6220]

Due to that big "nest egg" they have accumulated over the years. Oh, that was only $2,500, my bad.

[@woxyroxme]

Dementia is really kicking in here

[@williamerazo3921]

Lol

[@EmilyLucille523]

Dave does also say your debt free if you have all consumer debt paid off. The mortgage is the only good debt he allows.

[@williamerazo3921]

@@EmilyLucille523 car too if it’s in you reasonable means

[@CaseyBurnsInvesting]

Downsizing your life is the only way to access any of that equity.

[@BrotherBurr]

Sadly Casey, you are an ill-informed “advisor” when it comes to Home Equity Conversion Mortgage (“reverse mortgage”) options. Google Robert Merton, PhD my friend .. read up on why today’s retirement crisis is being addressed so significantly by people converting America’s $7T in LOCKED UP home equity to liquid reserves ... while REMAINING in their homes, making NO mortgage payments, and being SET FREE from the risk of another real estate price “correction”. Knowledge is power son, get’cha some.

[@johnwigren2497]

I wouldn't consider going on a reverse mortgage if I still owed $190,000 and the house is only worth 300,000 that's crazy. Sounds like they're desperate for money..

[@randys6220]

​@Reverse Mortgages Nothing but the Truth The lady did state the value of the home after Dave asked how much the home was worth at 2:53. She stated it was only worth "about $260K, maybe $270K". They are definitely house poor with that much debt to value ratio. Dave said she did not have enough equity for a reverse mortgage to amount to anything with all the fees/costs involved.

[@randys6220]

@Reverse Mortgages Nothing but the Truth For his support of reverse mortgages he references and recommends a book written by Robert Merton who lost investors "4.6 Billion" thru the Hedge Fund he formerly co-managed until it failed and was closed out, but "great answer". Sounds about right. It sounds legitimate and convincing as another Tom Selleck commercial.

[@julslatt6294]

She said worth $260-270k and owes approx $170k

[@ddkk1000]

Her: "We're debt free except for some medical bills" Also her: "We owe $170,000 on our house"

[@channell11]

And almost no savings...

[@gethighonlife11]

I know, right? What fantasy planet is she living on?

[@junkabcjunk]

@@gethighonlife11 I believe they are counting heavily on those two pensions they have coming in. But no other savings at all is kind of scary even then.

[@kbanghart]

@@junkabcjunk pensions, and social security.

[@kbanghart]

@@gethighonlife11 if they have a lot of equity, then the debt on the house doesn't matter. I think that's what she's trying to say.

[@davidhodge8509]

Default on a reverse mortgage? With a reverse mortgage you never have to pay back the loan as long as you live in the house. So if you go into default it’s because you aren’t paying property taxes which you’d have to pay anyways!

[@milomilano7679]

“Never” do a reverse mortgage is wrong. It is a good decision for some people. They are expensive but they do what they do: cash out some of the equity you are sitting on without having to move.

[@coolaunt516]

Tom Selleck, is that you?

[@jonathanvillaraus4310]

Finally a smart one in the comments

[@stangtrax]

Dave has good ideas for most people. But I stopped taking his advice years ago. I just had to hear what he would say out of curiosity. I'm researching reverse mortgage and they can be used several ways.

[@gonegolfn1475]

The RM would have been perfect for them if they had more equity! No heirs, tight fixed income and little in terms of retirement savings AND having to make monthly MTG. payments. Why pay a MTG if you don’t have to, redirect those monies back into your retirement

[@pjabrony8280]

The reverse mortgage is the most misnamed financial product. It's not a reverse mortgage, it's just a mortgage. A reverse mortgage would be: the bank pays the homeowner an amount every month until they're ready to leave the house (through death or moving), and then pays the rest of the value and then owns the house.

[@joels751]

Getting paid every month out of equity is an option, but the bank never owns the house.

[@wes846]

it should be called a home pension plan

[@Simon-oy7kf]

Retired and $2500 in savings?!? I'm 17 and I have more savings

[@dizzywow]

She says "Yes, I have a nest egg!" Err... no, you don't.

[@randys6220]

@@dizzywow Also $190,000 debt left on the house while retired and unpaid medical bills, but she said they were leaving well.

[@MetricBernard]

Go dude! 🙂

[@randys6220]

@@dizzywow Exactly, if she had a nest egg the lady would not be considering a reverse mortgage to pay medical bills. $2500 is a joke for a retired couple with 2 pensions.

[@jacobg8640]

I'm 22, in college I pay myself, I have $14,000 in savings with more on the way from working 50 hrs/week while I go to school full-time. Gonna be able to afford a used or cheap new car and pay the rest of my tuition with no more debt!

[@carlososcarcomedy]

Seems to me if the senior citizen doesn’t have savings however has BIG equity in their home that makes sense to me. You only live once why be a senior and have to work if you’re sitting on $1M in equity. We aren’t promised tomorrow. I’d rather enjoy my last days with out the pressures having to work at an old age.

[@steve-on3234]

she only had $100K in equity. not $1M

[@pedlpower]

It sounds like she's poor and doesn't know it yet.

[@prudencek7087]

Thank you God and Mr. Ramsey for helping me get myself and family together so we don't end up retired with absolutely nothing and nothing to leave our kids. I feel for this caller, cause she doesn't seem to know she's in a mess.

[@youngtimer964]

P K I agree she doesn’t know but people like this are used to having little to work with.

[@jaydubbs8277]

the fact that she already said they dont have kids to leave the house to is EXACTLY why a reverse mortgage would be ideal for her and her husband.

[@jimroscovius]

@jay dubbs Reverse mortgages are HORRIBLE for the reasons Dave just listed. Why put the home at risk?? Just sell it, pay off the debts, and enjoy the money.

[@rustykatt3870]

@@jaydubbs8277 I think they have kids, just no kids they want to leave the house to.

[@julslatt6294]

Right! 😆

[@robertcampbell6349]

There is an old adage, "If it's sounds too good to be true, it probably is". Reverse mortgages sound too good to be true.

[@charlesc.parker1164]

Retired and still owe that much on the house ? Sell it.

[@sbrazenor2]

I'm not planning to retire for about 27 years, but I owe less on my house. That's just crazy. I don't know why people do that to themselves.

[@thomasreedy4751]

Maybe they can do the math and have a high risk tolerance.

[@drewkroeker]

How do these people even call themselves "retired" when they owe so much money?!? Doesn't make sense to me

[@charlesc.parker1164]

@@drewkroeker She said in a couple of months they would be debt free. What's she smoking ? Maybe their house is a drug house and they have lots of friends. As messed up as she is maybe she should come out of retirement and be in Congress.

[@thomasreedy4751]

@@drewkroeker You can retire when you have more money coming in from passive sources than is going out. She made no indication that she couldn't pay her bills.

[@NeoAndersonReloaded]

What have they been doing their whole life with no kids and very little savings. They should be millionaires.

[@Its_meAyoSussy.]

NeoAndersonReloaded I’m wondering the same 🧐

[@blackworldtraveler3711]

Probably like the many baby boomers that laughed and criticized me for many years when i was saving/investing,buying used car,a home I could afford,and living within means. Saying things like "Living for today" and "you can't take it with you"

[@MsPants1632]

She didn’t say she didn’t have any children. She said she didn’t have any children that she’d like to leave the house to.... 🤔

[@bigg2phillips480]

It is sad to hear about people who are old that don't own their home. America can be shocking

[@gethighonlife11]

I know, right? I paid off my home at 48 years old, and I thought that was late!

[@MuzicTunes-lk6np]

It's better to apply for a reverse mortgage at 85 instead of 65. A lot can happen in those 20 years.

[@OhYeaMista]

What’s he talking about 1 in 5 default on a reverse mortgage? You can’t default on a reverse mortgage unless you don’t pay your taxes and insurance. You know what happens if you own your house outright and you don’t pay your taxes? The state takes your house anyway. So what’s the difference?

[@hx20303]

If your debt free, 70 and know you'll die in that home and have no heirs why not do it? I'll be dead - take the house

[@flashgordon6510]

I have a friend who did a reverse mortgage. The mortgage company is playing all kinds of games to get her and her mother (they are both elderly) out of the house to seize it, including not paying taxes, sending people to sit in their car and stare at the house to see if they're still alive in there, sending her foreclosure notices because the grass is too high, etc. It's a nightmare. She's trying to get help from the state, and the representative from the state told her this RM company is doing this to many people right now and there's not a lot that can be done about it.

[@bigkendallas]

If her home was valued closer to 300,000, I would absolutely do a reverse mortgage. If you have no children or family members to leave the home to it won't matter to you anyway, he will be dead. If she was able to pay off the first mortgage she can live without making payments for the rest of their lives as long as they never leave the home. I would choose living rent-free for the rest of my life any day.

[@miketheyunggod2534]

Reverse mortgages are great if you don't have anyone to leave the house to.

[@lesliereynolds4492]

I see the ads and was wondering but was never considering. My coworker just refinanced her house cuz she had bills, 2 Weeks later she bought a new Lexus. I’m going to uses 1/5 of my tsp to pay off my house in 3 years, I hate moving. When I retire I’ll be making what I made working. Paid off my car 3 years early last year. With my house paid off I will have property taxes and basic living expenses only so should be doing fine. I should be able to save for travel, I am a budget traveler so look for bargains.

[@AnnMitt]

170K left on the house and retired... OMG!

[@vickiemassengill8277]

Looked into this when buying a house. Closing costs alone are roughly $15,000? That alone eats up a huge amount of your equity and on a $260,000 home only would get about $60,000-$70,000 on a home with NO mortgage. At least that was my situation. I'll do what I can for now. Also, I would get nothing for my home if I needed to sell to move elsewhere.

[@dsantos72]

The only way to lose your home on a reverse mortgage is to not pay your property taxes. Which, with a forward mortgage or owned outright, you are still responsible for the taxes.

[@6711BC]

wrong, cannot pay for termite damage' cannot pay for new roof, cannot pay for home insurance; yard messy or weedy many poison pills in the contract....they cAN ALSO DO A SURPRISE WATER, GAS OR ELECTRICAL INSPECTION AT ANY TIME AND IF YOU CANNOT PAY FOR REPLAIRS AGAIN YOU WILL LOSE THE HOME...

[@timetopay5344]

So is Tom Selleck wrong on reverse mortgages? Dave you just answered my question.

[@austinselleck9484]

Hating on Uncle Tom....

[@misterE-1989]

3:02- The look on Dave's face when he just realized both are retired, no nest-egg, living on pensions and owes 170K on their house!

[@BrianVincent-k6g]

His face literally didn't change at all.

[@siglandoe3913]

Reverse mortgage is used when there are very few other options. But it’s not as bad as you would think. The only bad thing that may happen is if you don’t pay taxes or insurance, the same as with a regular mortgage. In the end you may still wind up with some equity to leave for the estate. That said, the person that would choose this option would no doubt be desperate.

[@skibum6422]

That is not a nest egg, its an empty nest with a couple of broken egg shells in it.

[@mr.constitution]

lol damn

[@insideoutsideupsidedown2218]

I absolutely do not want to be in this position when my wife and i retire.

[@sergiosantana4658]

The 20% foreclosure is due to banks having to foreclose on the estate when the homeowner dies. .

[@milomilano7679]

Oooh. I understand that.

[@joels751]

That's not true. The banks do not have to foreclose on the estate when the homeowner dies. The estate has up to one year to sell the house and pay off the mortgage balance. Default on the loan happens when the owner doesn't pay their real estate taxes.

[@MsBiggles51]

@@joels751 But if the homeowner dies and has no heirs, then the bank would have to sell it. And these reverse mortgages are often taken out by people with no heirs.

[@channell11]

She's retired with minimal savings and her home isn't paid off? There's no way she should even be thinking about a reverse mortgage. I always thought the only people that ever got those at least had paid-off houses.

[@sergiosantana4658]

A R.M can be also be used to eliminate a mortgage payment you will need at least 50% equity .

[@indman101]

I would sell the home and down size to a cheaper paid off home and payoff the medical bills as well,live below your means,try not to pay rent,investing is never a guarantee you want to play it safe when your at retirement age.

[@Simon-oy7kf]

Live below your means until you're retired, otherwise it doesn't make sense

[@bangladeshirealtor]

Renting in retirement is actually not a bad play . You get full amenities , usually elevator buildings which are good for the elderly if one goes that route ....and access to capital from a home sale , which can be invested to create growth that offsets the rent . You have more flexibility to travel around and really get the most of your waning years before your mobility is limited .

[@GR-uc1gq]

Rent in a 55+ community

[@MsPants1632]

Samin Alam my aunt is in her 90s and sold the house a while back. She’s renting in a regular apartment and now worried about the money running out. It all depends on how long you live. If you go to a retirement community (assisted living) where they can’t kick you out if your money runs out, then that plan might work...

[@bangladeshirealtor]

Ms. Pants respect but I also said invest that money from a home sale so it has continuous growth lol

[@the-hollywood-dog-says-6072]

20 % is way too high for default! And the primary default causes are not paying property taxes and home insurance..

[@davidmackiewicz6427]

He forgot to mention the high fees on mutual funds... But, he gets kick backs for the referrals.

[@jaydubbs8277]

kickbacks for referrals are illegal so thats def not happening with a legit company.

[@oliver5403]

@@jaydubbs8277 It does kickbacks are illegal but you can charge as much as you want to give advisors leads.

[@erich84502b]

When you hit the ending point, cant pay insurance or property tax, you go into default and face foreclosure.

[@terryh1811]

Applies to any homeowner not just reverse mortgage

[@cato451]

Sell it, rent, and invest the equity. Reverse mortgages, annuities, and whole life insurance are all designed to appeal to the ultra stupid.

[@ryanviningtube]

Agree with the reverse mortgage and whole life part. Annuities on the other hand do have some value as a part of a retirement portfolio. They don't earn as much as just straight investing, but they have a guarantee that no other financial product has. You pay for peace of mind, and peace of mind has value.

[@desertguy1362]

Do some research annuities are not scam products

[@cato451]

Desert Guy oh I’ve done the research. That’s exactly why I know they are a scam.

[@ryanviningtube]

@@cato451 name another product that has guaranteed income for life

[@motorhomenation5597]

@@ryanviningtube I had 200k in an annuity with guaranteed monthly income. Went to zero in about 9 years, principle and all. Never again for me.

[@nicolakruger9043]

Gold coins bad. Um Gold is currently at its highest price in a long time. Good stuff if you bought a yr or two ago.

[@RusskiCommieBot]

Gold is disliked by dishonest men. Dave Ramsey is beholden to the Federal Reserve system.

[@utah20gflyer76]

Stocks crush the performance of gold. You can use gold as a hedge but I think it's a mistake, you give up too much upside waiting for a crash, also you have to time the market and move back and forth between gold and stocks to make it work which is basically impossible.

[@ThePatriots010304]

Gold is worthless. No intrinsic value to gold.

[@utah20gflyer76]

@@ThePatriots010304 It's not worthless, it's used a lot in electronics for electrical connections, it has great conductivity and corrosion resistance. It is a commodity with some value.

[@RusskiCommieBot]

​@@ThePatriots010304 Some people would argue that pixels and paper on a computer screen have no intrinsic value either. Gold and Silver can be melted down to produce a wide variety of products. There are no other metals that have the same characteristics and abilities that Gold and Silver have. Commodities/metals are the building blocks of society. Without them we would be living like cavemen.

[@drewmurphy4262]

You’d think Dave would love gold, the ultimate store of value

[@billyrayband]

They are not comfortably retired if they have to borrow for medical and still owe 170K on a 240K home and only a 25 IRA!!! She sounds like she is at least 75 and will have more medical expenses. To even think a reverse mortgage would help in this situation means she needs to talk to someone about retirement...

[@BrotherBurr]

So a RM i% rate is “3% higher, which is ridiculous”. Never mind that the lady said she was “staying in the house for life”, and with RM’s borrowers are NEVER obligated for mortgage payments, EVER. Who cares what the i% rate is? The other excuse was “20% of RM’s go into default”. Can Dave tell us what % of that 20% would default if there were NO RM? The answer is ALL OF THEM. RM’s require that homeowners pay their own taxes and insurance - just like EVERYONE who owns a home. Don’t pay your tax, the COUNTY (not the mortgage company) files notice of default. Settle up, or lose the house. RM or traditional loan, or NO LOAN .. don’t pay your tax, lose your house.

[@verlenebutts6257]

JED Davidson I took out a RM, my APR is less than the rate I had on my mortgage.

[@alexc5369]

Of you literally have no family or intentions to pass an inheritance to anyone then there is nothing wrong with a reverse mortgage if you plan it right

[@johnwigren2497]

I totally agree👍 My mother went through Wells Fargo's on a reverse mortgage and she loved it. When she passed we sold the house had to pay what she took out plus fees my brother and I got a little bit of money from the house. I wanted to make sure she was going to live a comfortable happy life and She did😃

[@janettezcan4694]

@@johnwigren2497 What if the loan has been exhausted and the bank won't give you any money. Doesn't that happen?

[@kaytan8598]

Your mom is exactly the type of person a rm is good for. It seems like the biggest problem here is a lack of equity and a failure to plan for retirement in advance.

[@johnwigren2497]

@@kaytan8598 Exactly 👍

[@1flaraider]

best statement---DON'T DO A REVERSE MORTGAGE

[@RobjS-y8o]

Sometimes it's the answer if you have no debt, small savings, no pension & no dependents/ beneficiaries.

[@samanthachristy8030]

This lady needs to listen to Dave for another 3 months and maybe buy his book, so she can reflect on how bad of a move this would have been.

[@BrianVincent-k6g]

She can't afford a book. They need to save every penny to pay off mortgage.

[@sharinglungs3226]

I’m stunned by this caller. I would not like to have $170k in mortgage debt and what sounds like health issues that may get worse in retirement. She sounds unaware of how dire their situation is.

[@graciesawesomechannel1998]

I agree.....she started the call coming on strong like they were in a great position. Then I'm thinking oh well maybe the house is worth $400k and they have no mortgage. Nope.....

[@elmateo77]

@@graciesawesomechannel1998 Some people have been lying to themselves about how bad their situation is for so long they've managed to make it sound quite convincing.

[@channell11]

I've always viewed a paid-off mortgage and a sizeable nest egg a requirement to retire. If you're retiring with any debt on the books you're setting yourself for trouble-particularly if your medical expenses increase.

[@lauriemarble6923]

Have any of you who are bashing this lady ever gotten a divorce mid-life?! Especially if you have kids and Mom stayed home to raise the kids. That doesn't leave a lot of income for savings. So at 40-42 you divorce and split stuff up, sell a house that probably didn't have a lot of equity in the first place, give up or split 401k and maybe give up part of your pension!!! That's how you end up at 70 and still owe $170k on your mortgage!!!! 😢

[@shelleycharlesworth5177]

What if you are retired and own a home free & clear worth $2 million and have no children or debt and you only want a reverse mortgage for $300K?

[@gonegolfn1475]

It’s a perfect option! You can borrow against the property and not to have to make monthly payments, EXCEPT for taxes, insurance and maintaining the home. Just call “Tom”

[@Kysen10]

Retired but still owe 170k on the house, yikes! I guess they were hoping to spend the equity before croaking and handing the house to the bank.

[@pastorios1]

i listen to ramsey and follow his system. However, i noticed they don't care much for seniors who for one reason or another never had the opportunity, knowledge or education to do better in their lives, (having a 401K, having educated parents, etc) I really resent that. I am not a senior yet, But I have parents.

[@sylviamiddleton8154]

Love your answer to reverse mortgages question! Thank you so much!👍👍

[@wes846]

There is so much bad information here that is simply not true. The only way to default is by not living in the home, not paying property taxes and insurance, or not maintaining the home in a decent condition. The interest rates are about the same as a regular loan. You can take a reverse mortgage and make payments so that you pay down the loan, then if you need the money you can skip that months payment and the interest will get added to the loan. Of course you can also never make a payment and as long as you do the above you can live there the rest of your life without worrying about foreclosure. 1 in 5 are not in default that is made up and the ones in default would have been in default on their previous mortgage a lot sooner since it requires a monthly payment. I just cant believe he can say these things. Dave ill be happy to be on the show to discuss the modern day reverse mortgage.

[@rob-442]

Dave, my wife and I are both in our late 60's. We owe about 230k on the mortgage. I was thinking of doing the reverse mortgage (not to get money out) but to no longer have mortgage payments for the rest of our lives as long as we live here. We both plan to live here until death, and we have enough income to be able to take care of the property and insurance. We have no one to leave the house to. So, why wouldn't a reverse mortgage not be good for us in this case? Thanks.

[@lauriemarble6923]

What's the answer to this question? It seems a very fair question for many older folks!

[@stuartclubb4302]

"We have no children to which we would want to leave that house." I wonder how the kids feel about that?

[@bravogolfnovember]

The kids can get their own house?

[@randys6220]

@@bravogolfnovemberThere is no house to leave the kids outright anyway, they still owe $190,000 on it and have unpaid medical bills. She should have stated, "we have no kids we want to leave that mortgage with to pay off".

[@adamh6330]

If my parents can live a more comfortable retirement, through leveraging their home equity, I support them. It's their home, not mine.

[@tomthetalker4442]

I heard some guy speaking of making over $750,000 in net profit from a capital of $200,000 in less than 4months in this current market situation, saying there are lots of ways to multiply profit in the market, I'm a beginner and i would appreciate any pointers or clues on how to make good profit.

[@drew6651]

take courses and read books.

[@daniellasven9517]

I personally use a broker which I think is essential for beginners to make good profit, I started investing mid Nov. 2019 with about $170,000 and I have currently made a net profit of over $313,000

[@martingraham3231]

Wow i would retire early and rich if I had that much profit, who is your broker and how can one reach them?

[@daniellasven9517]

@@martingraham3231 My broker is Marilyn Su Thuyen and you can look her name up online if you wanna get in touch with her, all her details are on google.

[@newyearedgar7703]

@@daniellasven9517 Wow serendipity, thanks for sharing 🙏 ❤️

[@Pamelamusic371]

My Dad, sold his home, moved into the home his parents left him. Decided to put a reverse mortgage on it and moved to Florida, lost the home to the reverse mortgage company.sigh😔

[@BrotherBurr]

Hmmm??? Federal law states that homeowner's who take a Reverse Mortgage MUST reside in the home as their primary residence. As long as they live there and pay their property taxes and insurance, they NEVER have to make a monthly mortgage payment -- EVER. It's the law. When your dad "moved to Florida" (established residence there?), did he try to sell the home? Because RM's are "non recourse" loans, it would NOT have mattered how much the home sold for. I.E., If he sold it for MORE than the Reverse Mortgage loan balance, the extra equity over the loan pay-off would have been paid to him. If however, it sold for LESS than the R/M balance, your father would NOT have been obligated for anything more than Fair Market Value (i.e., the selling price). The Federal mortgage insurance trust fund would have paid the short fall / difference. By the way, what did dad do with the equity he collected at the time he took out the Reverse Mortgage?

[@elmateo77]

@@BrotherBurr Probably blew it on boats and hoes.

[@alexsaladrigas4844]

@@BrotherBurr asking the real questions. You only lose your home if you break the rules aka stop paying your escrow or do not live as your primary home

[@terryh1811]

His fault he had to live in the house to get the RM

[@gsquared2394]

They just did their first budget ever at age 70 and don’t have any money other than what is coming in from their pension. They are the typical case of living paycheck to paycheck and are very normal. Normal really really sucks

[@thomasreedy4751]

We know nothing about the size of their house, the local real estate market and where they would be confortable living. We have no idea about the size of their mortgage, utilities and taxes. We have no idea about there income, either than they have enough coming in to be debt free except the mortgage. I don't understand how everyone can be advising the lady to sell a house with 100k equity based on such little information. But hey, that's me.

[@channell11]

They are retired, with very little in savings. They have a mortgage that they still owe on. They have medical debt with likely more medical issues to come. They're also looking to take out a reverse mortgage, which likely means they don't have enough money coming in. Maybe selling the house isn't the answer, but their situation seems precarious.

[@Roudter]

My parents went for this scam. They spent all of the money and my mom was dead within months of running out of money. This is a deal where you gauge the value and probable length of your life - a freaking horror show. Disgusting...

[@BrotherBurr]

Which is one of the main reasons why changes to Federal law in 2015 & again in 2017 prohibits lenders from giving borrowers more than 30% of their available equity in year one. It's also why there are Federally-mandated financial assessments and 3rd party licensed counseling sessions required before an application can be taken / approved. And of course, there is the new "LESA" (life expectancy set aside) providsion (escrow account) ... to be funded for LIFE, to cover property tax and insurance payments ... should the applicant be found not to have enough reserves to pay those costs. I'm very sorry for your parents ordeal. Those situations happened to be sure. Today however, Federal law is so restrictive, lenders can no longer purposefully "prey on the vulnerable" ... without facing Federal prosecution.

[@Roudter]

@@BrotherBurr Thanks JED, but to me it's lipstick on a pig. The fees and interest rates are another part of it...

[@Thurgor_Supreme]

So they have $13k in savings and $170k owed on the mortgage, and they think they're going to be "debt free" in 3 months?

[@elmateo77]

Think she just meant the medical debt.

[@Thurgor_Supreme]

@@elmateo77 Nah. For some reason the older generation doesn't treat mortgage as a debt, even though it's the biggest debt in their entire life and they usually carry it into their grave. It's like they view it as a monthly bill or something, and just accept it as a way of life. I always thought it was the weirdest thing growing up and rebelled against the idea. Probably how I bought my first house cash.

[@channell11]

Debt is debt. The only good things about mortgage debt is typically a house isn't going to lose value. Even still when you factor in interest it's still going to cost you.

[@MountainMan.]

A reverse mortgage is not free money. It is a loan. That's why the payments you receive on a reverse mortgage are not taxable, because the IRS considers it a loan. If you have, say, $100,000 equity in your home, well with a reverse mortgage you can only access about $40,000 - $50,000 of it. The rest of it gets eaten up by interest and fees from the reverse mortgage. Your equity goes down with every passing month and you owe more and more and more until you die or move out.

[@janettezcan4694]

Does it come to a point that they will stop giving you money?

[@stuartclubb4302]

@@janettezcan4694 If you keep to the deal, no. Is suspect they are hoping you die quickly, and the house appreciates to cover them...

[@MountainMan.]

@@janettezcan4694 Yes, it's a limited amount. You can either choose one lump sum or a limited amount of funds spread out over a term.

[@sergiosantana4658]

@@MountainMan. do your research before you advise others! One of the options on the HUD approved R.M is tenure option this will give you a monthly distribution for the rest of your life as long as you reside in the house and you pay the property taxes and insurance.

[@randys6220]

The lady caller only has about 37% equity in her home. Many reverse mortgage companies require at least 50% or more to even be considered for a reverse mortgage.

[@ManInTheBigHat]

Thanks for the advice! I have no kids and though I have plenty of cash and stocks I have very little income. But I can make it without a reverse mortgage!

[@kCI251]

You're better off to sell the home and rent it back at a fixed rate for as long as you want. There are plenty of home buyers who would make a deal like that.

[@cardo1111]

You can trust Dave to tell you straight 👍🏼

[@ryantaylor6530]

I have to imagine if they are thinking of a reverse mortgage then there pensions are probably not covering them as well as they would like. If they need to free up that equity then the best way I can think of is to sell and downsize.

[@oroebuck]

His knowledge of Reverse Mortgages is outdated from everything I've watched recently.

[@dwightshreve4320]

Disagree with you Dave. If it frees up her cash flow, guarantees they get to stay in that home the rest of their lives, WHO CARES WHAT THE FEES AND INTEREST ARE??? THEY AREN'T PAYING IT BACK ANYWAY!!! Home equity is just tied up in a home not doing anything. When they die, who cares what the equity is? Nobody is getting it anyway except a lucky investor that picks it up on the foreclosure block. Higher fees and interest rates are your only objections and amount to nothing if the person is dead. They can't take the equity with them. Enjoy what life you have left with the hard work you've put into that house. She's actually a good candidate because they won't be paying down that $170k balance anytime in the near future. Continuing to pay mortgage payment in that scenario is a waste of money. Those 1 in 5 that lose their homes, most likely lost it because they weren't paying their property taxes which you would have to do in a traditional mortgage. The reverse mortgage guarantees they get to live out remaining years for the rest of their lives, even if one of the spouses passes. In a traditional mortgage, if the husband passes and their income drops, she can't afford the home and loses it anyway. If she sells, she would just take the equity and go rent someplace else and that's literally throwing money away.

[@arfriedman4577]

I was told a reverse mortgage is not good. Just downsize.

[@1redrubberball]

Just out of curiosity, several years ago I looked into a reverse mortgage. I didn't like the look or terms. If I needed equity out of my home to survive in retirement, I'd sell the home.

[@BrotherBurr]

So you did not get the whole story. Are RM’s good for every situation? No! The “look and terms” are secondary to the RESULT, if said result is a solution to a retiree’s housing and living expenses needs. It’s food, clothing, shelter, and healthcare ... aka, survival. Which is more important? Survival or terms?

[@elmateo77]

​@@BrotherBurr No one gets a pass on math. Unless you're within a few years of dying and are going to be dead before you spend all the money from the reverse mortgage it's a stupid idea.

[@joels751]

And when you sell your home you'd live where? Have you told your kids you're moving in with them?

[@kbanghart]

@@joels751 exactly. "Sell the house" isn't exactly easy when you still need shelter 🤣

[@kbanghart]

@@elmateo77 so, what's the math? How is it stupid? Let's say a home worth 500k, and it's halfway paid off. I don't know how RMs work, so I'm looking for help.

[@KYLE-zo4bm]

whats wrong with them if they still pay the taxes and insurance

[@billyruben116]

Dave is wrong about the interest rates on reverse mortgages. And as far as default, you never have to make a payment...you only pay taxes and insurance and hoa (if you have an hoa), and ad long as you live there at least 6 months and day per year, then you are not in default.

[@jefflahtinen2930]

This guy lives in a perfect world...

[@gilmendoza8092]

I thought she had hundreds of thousands.. she has pocket change in the house and her savings

[@electromech7335]

Hey Dave you look at the price of gold lately? $1600 an ounce! Im in the black. Stock market is in a bubble and the bond market is way over priced. Real estate is in a bubble. Banks are close to negative interest rates! Keep piling that money into the markets and gold is a scam!

[@cutehumor]

I'm sorry. You can't retire with a mortgage!!! She said she will be "debt free", she owes 170k on her mortgage. You are still in debt!! It's obvious they have to live on a budget on their pensions, but mistakes were made. She will one day be forced to sell the home and rent an apartment. why? if she is relying on social security, social security will be cut at least 20% in 15 years, if our heroes in congress don't pass a new law to fix social security. LOLOLOL

[@euenfheiejrj]

Sir We Are About to Die lol he wants to gut it

[@aolvaar8792]

@Sir We Are About to Die In 2033 , the SS trust fund will be empty. The Millennials will cash flow at 77% boomers retirement, they don't want to pay for Boomers.

[@haemusic1]

Thanks for saying that Dave. I've had the same conversation with many people and it is hard to convince them those are bad products.

[@cjanderknox69]

Because they arent, dave is wrong

[@SipLeila]

I feel very wealthy now. But, I understand that she does not need to worry about giving her children an inheritance. We have worried about that too much and now regret it. It sounds like a simple equity loan is a better idea if you want to buy a beach home.

[@lauriemarble6923]

My mom had a paid off house and $100k in savings. Guess what...she had to go into a nursing home for three years at $8000/month. That's not a typo! Only reason they didn't get the house too is because my brother is disabled and as long as he was living there the house was off limits. And just like that, all that scrimping and savings over her lifetime were gone!😢

[@Thurgor_Supreme]

Reverse mortgages would be great ...if they weren't total scams. I like the idea of selling your house in the future and using your equity to "pay rent" in the present, but the numbers just don't come out right.

[@elmateo77]

Meh, if they actually owned their home it could be a good idea. $270k invested in a mix of bonds and index funds would give you about $1200 a month. That's enough to cover rent on a decent apartment as long as you're not living in a major city. But they only actually own about a third of their home, the bank owns the rest.

[@corey407woc]

if "The Fonz" from Happy Days tells me what to do with my money, I'm gonna do it

[@randys6220]

Aaaaeeeyyy! (Thumbs up).

[@robertspencer5219]

LOL

[@juliorivera870]

When you're old and just living on SS we don't have no choice, is better to pay $300 a month on insurance & taxes than $2000 a month in mortgage, $3000 a year is way better than $2000 a month.

[@chrisoneillstitt]

Excellent advice on rejecting reverse mortgages.

[@LoneStarLawman]

Why is it a problem, if I have no house payments on the reverse mortgage?

[@emanruoy]

The people who went in for a reverse mortgage in the last 6-7 years when their home values were so artificially inflated will be horrified at the housing market collapse to discover the bank owns their home overnight because suddenly they owe so much more than it is worth. It's a substantial slice of a much larger pie in that real estate ownership is a primary part of personal wealth and long-term financial stability. It's likely to be part of a cascade effect that results in hyperinflation critical to the restructuring that brings about digital currency and a global financial system. The great depression is a poor example for numerous reasons. This outcome has been engineered and 33+ trillion in national debt does little more than seal the deal and make the path certain. 'You'll own nothing', won't happen by accident.

[@RobjS-y8o]

The house is $260,000 & they have a $170,000 debt & they have pensions! And they want a reverse mortgage! They wouldn't qualify.

[@markmyjak7739]

Dave Ramsey: You should bring up property tax deferrement. Lacking financial education, people think that having their property tax deferred is a good thing. Wrong! Its pay later with interest added on. The deferrement can get so big that your heirs sell the inherited property to pay the taxes on it.

[@timothy8142]

Both retired. $11,000 in a 401K $2500 in savings $270,000 house (facepalm)

[@elmateo77]

And they don't even own the house, they still owe $170k on it...

[@channell11]

I told my wife nobody's retiring until the house is paid off. Even then I plan on working for a few more years to really stack away savings.

[@privateprivate8366]

I’m FAAAR from being any financial expert. But, it sounds to me as if they don’t have a real grasp on what any real savings actually are. Like they “may” be “approaching” a somewhat decent emergency fund. They don’t have children to which they “would want” to leave anything to so, I don’t know whether they actually don’t have children or that they don’t have children they deem worthy of leaving anything to. Either way, that’s up to them as, it’s their money and they may have chosen to, essentially, “take it all with them”, by getting a reverse mortgage. I do wonder, in looking at my own mother’s situation, whether what they have could accommodate the possibility of illness. Unfortunately, people quite often become ill, then die. That can be a big expense, particularly, for the one left behind. For my mother, she “decided” to stop paying her bills and stopped filing her taxes about a decade ago and she’s now 76. She owns 2 paid off properties that she pays property taxes on, that she has been saying she will leave to my sister and I. I have a letter that I obtained when I was picking up her mail a couple of years ago, involving long term care. I certainly hope she has long term care, as she has no other means of obtaining care, unless she has a lot in her annuity or can pull a rabbit out of a hat. The bottom line is that, in all likelihood, she will need care. While it’s becoming a huge disappointment that we won’t inherit anything and the properties will be taken by the state, in the interest of her care, they are hers, including if she’d like to burn them to the ground as, she’s already cracked up the pipes by allowing the homes to freeze over. One might say, “Well, get in there and make sure that you take advantage of laws and any other ways to cover her and the both of you!” But, I believe she has NPD and memory loss and she is ADAMANT about what she will and won’t do. The only thing I have going for me, is that our residences and finances are separate. My sister has nothing but financial desperation going for her so, she may attempt to steal both properties since she’s been thoroughly triangulated against me. Still, I think there is both planning and lack of planning, nothing that can impress her enough about her healthcare and the best I can hope for, is to stay away from ground zero.

[@mtbroca]

I've been in that situation. Real tough. My dad left it to the mistress. It's a no win.

[@privateprivate8366]

I managed to gain enough of my mother’s trust this morning, when she called me, to obtain her debit card information. That may sound smarmy but, it’s for a few reasons - to get groceries delivered to her house, to see if I can activate a watch I’m about to send her that has fall detection, GPS, and 2-way communication, removal detection - and because I want my sister to be put on notice that having our mother’s debit card info isn’t a runaway train. It also protects me from being engaged with either of them, at least in person as, I never actually want to see either of them ever again. I’ll note that part of the reason I was likely able to obtain her debit card number from her has to do with narcissism. She has a need to be served and to have my sister and I serve under her. She’s also become lazy, other than the fact that she’s becoming older and may have the onset of dementia. So, she’s more than happy to offload doing anything she doesn’t feel like thinking or doing about. I’m mailing her a smoke/CO2 detector, glucometer, fire extinguisher and the watch. I’ve paid for those items but, the rest will be on her. The watch I can put on Do Not Disturb or direct it’s to call 911, if necessary as, she has tried to tamper with my livelihood by calling my job repeatedly, in the past. The smoke detector is not a connected smoke detector like the Nest Protect but, I need to make sure (remotely) that she has internet at the equipment to support a Nest Protect (which just arrived yesterday), before I set it up and mail it to her. Because, yeah, I don’t mind an occasional phone call but, I haven’t seen either of them in 2 years and I’m quite happy with that since I don’t tolerate abuse. If she doesn’t want to use any of it, while it wi be good money after bad, I’ve done all I can, without losing myself, in the interim.

[@richardstoehr9326]

Glad I watch his video I was looking into it my house is worth about 260 I owe 120 and they were going to give me 3000 in cash that’s it. Great conversation thanks

[@sergiosantana4658]

No they were going to eliminate the 120k mortgage and the payment that goes along with it so the total amount your receiving is 123k not 3k

[@adamh6330]

If you ended up living in your home for the rest of your life, that could be an extra 150-200k that you could save in mortgage payments(maybe more-depending on your current interest rate) and put back into your retirement budget or plan. To some homeowners that's the difference between living comfortable or living check to check. It's not for everyone, but a lot of retirees benefit from the Reverse Mortgage.

[@vistalover9607]

I don’t think Dave Ramsey understands that a reverse mortgage can be set up to have no payment until you are deceased. (Or move)

[@laurens.2503]

Good video and informative.

[@b.bernal6151]

I don’t see anything wrong with a reverse mortgage if you owe nothing on your house, have no heirs and are lacking cash. Obviously, they are not for all seniors.

[@thankswillie]

question,wonder where i can get a recommendation on a reverse company,,,maybe at my local bank??THOSE people might be doing OK if they are raking in about 6K per month...doubt it though

[@markratigliano7511]

Pay yourself first

[@DropsTheMike]

Bro they don't have kids, are looking to retire, their savings is 2 grand... and they owe more than half still on their house??? WHAT THE HELL HAVE THEY BEEN DOING THEIR WHOLE LIFE?? Most people struggling to retire are in that position because they raised a family. These two chose the cheapest life style and are flat broke?

[@dutchmagpie170]

The advert I watched before this Dave Ramsey KZbin clip was for a UK Reverse Mortgage. Somewhat Ironic under the circumstances.

[@toyarj37]

I want my parents td to do a reverse mortgage. We don’t want the house. It needs too much work and I don’t want the headache. They have nothing in savings

[@oraclex2976]

I could never enjoy retirement knowing that I had sold my house - for which I had slaved all my working life - down the river.

[@kbanghart]

What do you mean? You can't take the house with you when you die.

[@jarrettpierce5626]

I thought this lady was a millionaire come to find out she’s broke and clueless

[@mattheweven4764]

good one...she is a nut!

[@donwhittaker5899]

OMG. What a bunch of mindless baloney. 🙄 I'd love to see Ramsey have a discussion with somebody who actually knows about reverse mortgages. The only way to lose your house is to not pay property taxes or insurance, or fail to maintain the home. Guess what? The same holds true for a regular mortgage, as well as for no mortgage at all. Pay your taxes and insurance people! Regarding alleged high fees and interest rates. Who cares if you get to live in your house forever and never make house payments? Win-Win. And a reverse is a non-recourse loan, which means you or your heirs will never EVER owe more than the house is worth. Count me in... I'm working on getting a jumbo reverse as I type.