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Old Phart's Relief.

3K views 30 replies 19 participants last post by  Big buford 
#1 ·
My divorce and subsequent retirement a couple of years back has left me neither in the black or red but just on the 0 line. Meaning I am having to think long and hard about travel plans. In the divorce, being the one who walked I had to fight seven long hard years for my settlement. No 50/50 split here I finally gave into about a third on my end. Then having to start over it bought me a comfortable condo and reduced my investments less than I needed to subsist. Also being a self employed builder for most of my career brought a lot of cash jobs (interestingly enough demanded by the customer a lot of the time) that meant that i was a wee bit lax on giving the gov their share. So the pension is a bit on the light side.
Now I have just paid off my mortgage and am left sitting on the the zero line, neither black nor red. So, discussing this with my Credit Union I have made an appointment to go in and discuss the whole reverse mortgage thingy. I have at least $250 in equity with the condo, one child to leave whatever is left to (and from her Mothers' side she with certainly will never be hurtin for cash) and maybe 20 years left before I am reborn as a Toad. On the phone my banker has told me they can make this work, ie; free up a cash flow to moto travel, get out of the winter weather and maybe see Aus. before I kick it. Hell, a cruise drinkin those drinks with the tiny umbrellas may even be in the cards. Will be interesting to see.
And if it does happen I guess I will be loading up the Jeep and throwing on the Backpacker (Tdub) and getting down to the warmth to wait for Moab sooner than later. Fingers crossed.
 
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#2 ·
Please seek outside assistance when considering a reverse mortgage.
Many unhappy stories about those.
I will repeat. Seek assistance from a professional person with no hand in this.

Wishing you luck and happiness in your future endeavors.

Been a couple of years since the court system screwed me dry. Left me with no 4 wheeled vehicles except my 66 Corvette.
Cost me over 200 grand.
Best friggin money I have ever spent that I didn't have.
 
#6 ·
Ah Greg, why'd you have to go and say that?!?!? Now I have to rant - Not EVERY woman out there screws the man over!

My ex husband got way more than he deserved. He came in to the marriage broke, behind on all his payments, and collections coming after him on several things. I came into the marriage debt free, a savings account, and 5 acres in land.

After 11 years of marriage - where we both worked and made the same amount of money, he came out of it with debt free, a brand new paid for truck, half of everything we owned, money in the bank, all of his retirement money and 401k, and child support payment of $400 for two kids. The only thing I fought for and got was the kids. He had decent visitation but he chose not to use it.

I've always believed in doing the right thing and the right thing was for each of us to have half of everything and I also wanted to set a good example for my kids. Being vindictive and greedy does not set a good example.

Yes, I would have loved to stick it to him but I didn't. In the end, he stuck it to himself. He was remarried within 6 months and bankrupt within a year after that.
 
#4 ·
Actually the banker didn't mention the word 'reverse' so I'm not sure that was what they were talking about. Sounded like some type of remortgaging with a good interest that covers the payments AND gives me the cash I need to be happy. She also said I would still be the homeowner and there's no way I would ever be out on the street. I know, 'If it sounds too good to be true it probably is.' I'll be careful but I'm all ears.
 
#12 ·
Ditto to what Smitty said in his first post. Get the outside counsel, reverse mortgages are not what they are cracked up to be. Just do your homework and make a good decision that fits your needs.
 
#16 ·
One group will buy your Structured Annuity for pennies on the dollar, "It's Your Money-Use it when you need it". Another wants to buy your life insurance policy making them the beneficiary while paying you a tiny fraction of the real value. Another wants to end up with your home for next to nothing. Then there is the group that wants you to donate your car but they fail to mention the proceeds go to educating young Hasidim Jewish kids who's fathers likely work in the NYC diamond trade but refuse to admit they are the baby daddy and keep the mothers on welfare.

Geeze guys and gals, Think before you act because there are thousands of groups that want a chunk of your money for very little in return.

Divorces can in fact be amicable until you involve some grubby fingered lawyers who will surely end up with the lions share. They thrive on keeping the fight going and their fees coming. Anything you see advertised on the TV is almost assuredly a scam of monumental proportions, commercial TV time aint cheap! People a lot smarter than most of us sit around every day designing the many ways to relieve us of our money which is the way of our world but you need not participate. How about those credit card deals where you blow your credit up to $25-$30 K and then they say you don't have to pay. How stupid can we be?

GaryL
 
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#19 ·
I think Purple nailed it as to what I am being offered. Curious tho, about who would offer something with nothing to gain. Not real sound business practice.
Further to my situation; before divorce we had built up a tidy estate due to my hard work and the X's family business. My kid decided to stay with her Mother and will never, in the least, be hurting for anything. So, I am wide open to spend the equity as I please and, if any is left when I get turned away from the Purly Gates, she or the bank can have it. Don't much care.
 
#22 · (Edited)
Not a reverse mortgage fan. lots of fees add up to a HELL of a lot of money left in their pockets.

Old Farts are valuable part time employees all over the country.

Maybe find a full or part time job half the the year (or less)

Travel the rest of the year.

Motorcycle shops, hardware stores, West Marine's, etc. etc are always looking for Old Fart part timer's

Or... Do a reverse mortgage:glasses9:
Scary
http://www.forbes.com/sites/carolyn...-truths-about-reverse-mortgages/#384ef0d06264
 
#23 ·
OK. finally got some answers. It is not a Reverse Mortgage. They don't do that and warned me away from it. It is a Home Equity loan. Based on up to 70% of the value. We work out how much I would need over, say the next 20 yrs, ( I should live that long) on top of my present OAP and meagre investment dividends that I have left, to give me enough to comfortably live and travel and what have you. They give out monthly payments to my account and take their loan payment. Apparently it's a seniors thing and the interest is very low. Gonna have a sit down with them in a week and then I will know if what I am saying here is the way it goes. But if it covers my ass for the rest of my not too exorbitant life style I am sure it will work for me.
 
#24 · (Edited)
A home equity loan means you have to repay the loan, with interest. Why not simply sell the condo, and move into t a less expensive small house? Or rent a small house? You end up with cash and a better standard of living. Try at all costs to stay away from any monthly recurring debts. Those will bleed you if your income is fixed.

I don't know what your situation for health care is, but health care costs are usually a really big nut during retirement. It's the #1 reason I can't retire NOW.. I would if I could get health insurance cheap, but it doesn't exist.

Home equity loans work like this.

Bank does a valuation of your property (say $250K)
Bank uses 70% loan to equity ratio (250X.70 = 175K )
Bank subtracts ALL liens (second mortgage, tax liens, anything owed against the house). If you have NO other debts against the house as collateral, you can borrow $175K and whatever term they offer (15,20,30 yrs, % rate). Equal monthly payments for the term to repay.
If you owe $20,000 on a second mortgage (say an Equity Line of Credit), they subtract that from the $175 and get $155 as a loan amount MAX.

It's not complicated, but usually you would use that equity to get something tangible and value in return (new roof, driveway, carpets, remodel, second home, education). I am of the opinion that blowing your hard earned money on things that provide no lasting benefit is a waste.

Sometimes , after giving a plan time to settle and think about (weeks-months) you might determine that that plan is not optimal. I always take WEEKS if not longer to make a big financial decision. Many times I have reversed my way of thinking to my benefit and avoided bad snap decisions. When someone tells me I HAVE to make up my mind quick, I relax and walk away. I know I made the right call.
 
#25 ·
Many years ago after having served a hitch in the army and a hitch in the coast guard, I was working in a log mill in Oregon. I looked around at my co workers and fellow townsmen
and saw that for a manual laborer ( I include heavy machine operators in that bunch ) Old age was going to be a health problem. For some of the mill workers, it was brown lung from breathing sawdust for years. For many it would be traumatic injuries. A lucky few would make it to retirement with their health intact. They would be a minority. I looked back at the military and realized that although there were risks, I would be medically covered. I knew that although the pay was lower than the civilian jobs, I would have much lower living expenses. I chose a Military career and went back to the coast guard and finally retired out as a chief Bos'ns mate. This is the same as a platoon sergeant in rank with some similar duties. When I retired I was able to live on my pittance of a pension because I owed no debts and had no credit cards. I also lived cheap in the wilderness. When my health began to go bad I had to come back to civilization but my veterans care took up my health care as I had hoped. They eventually gave me recognition as disabled and added a disability payment. I now live comfortably on what they give me each month and would have been bankrupt by medical bills years ago if I had stayed a civilian. You make your choices and live with them. Sometimes it is better to have some day to day miseries in exchange for old age security. I lived a hard life at sea for years but I now see that it was worth it.
 
#26 ·
I did about the same Phelonius, HS then straight to the USN and then straight to the prisons for 27 years. I mostly hated every minute and every day of my career choice but at the end there was the pension and full coverage health care that I do still pay for but at a substantially lower cost than other insurance plans plus my wife is covered for her life even after my death. I will always guide those younger folks to make smart decisions and not to base them on the dollars now principal. Debt is a killer and often unavoidable with big ticket things like homes. I see far too many of my young family members in hock up to their ears with fancy homes, big mortgages, new cars and steep payments as well as credit cards with large balances and all the newest gadgets. Just the loss of one income will send them into a downward spiral and that can happen in a flash for any number of reasons.

There is a difference between living comfortably and being comfortable in your living. If the condo is more than you need then lighten the load and get out of debt. Just about every thing my wife and me do is done in the avoidance of debt. We have not paid a penny of interest in years and if we can't buy something debt free then we simply don't buy it. Make a plan to get out of debt and stick to it so you stay out of debt. Most of my vehicles over the years were driven for over 10 years and passed 200,000 miles before I bought a new one and once the car was paid off after 4 years I simply kept banking the payment for the remaining life of it so when it was time to buy another I had most of the money in the bank for it. I sold the house we lived in for over 20 years and we now live in a rental home while I take care of large property with 5 other homes for the owner which affords us to live much cheaper since I retired. No bank owns me or anything I own so that is my advice in this situation.

GaryL
 
#28 · (Edited)
Great advice. Nothing chaps my A** more than having to pay interest on a credit card. Money is way too tight in the first place. If I can't pay it off on the next payment, I don't buy it either. I haven't paid a buck in interest in years either!!
 
#29 ·
Hey Motoad, please take notice of all the "likes" on follow up posts suggesting you get professional fee only financial advise. They are telling you to be VERY careful with reverse mortgages or whatever name they give it. You may be able to get this advise free on one of the many call in radio shows featuring a financial planner. I like Ric Edelman.

Good luck, man.

Will
 
#30 ·
Paying other people for the use of your own money is foolish. I hated it when I lived that way. I haven't paid interest in 26 years now and it Really helps.
I just bought a house. Paid for it out of my savings, again no interest. The average person pays more than 25 to 35 % of their take home pay in interest on houses, car, credit cards, etc. If you are not paying interest it's like making that much more income. It mean lean living at the start but it is worth is in a few years.
I wish the federal government thought like I do.
 
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