Survival

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A senior friend of mine is planning to look into a "reverse mortgage" on their home. This will give them, she said, a bank "line of credit" from which they can then purchase supplies for their Y2K larder. This sounds like a good idea for the still-independent elderly who have their own homes, paid for, or with reasonable equity. Such mortgages are available only to seniors, I believe. But, maybe younger home owners should think about re-mortgaging to provide Y2K funds?? Anyone care to comment--especially any bankers or mortgage company employees? Thanks!

-- Holly Allen (Holly3325@juno.com), June 05, 1998

Answers

If it is as bad as the doomsayers say, foreclosures will be very few and far between. If it is all hype, one had better be able to make the extra payments. In either case, if it is borrowed, EVERY effort should be made to repay. The alternative is stealing . . . plain and simple.

-- zerad (zerad@my-dejanews.com), June 05, 1998.

Holly,

I'd looked into reverse mortages last year. Available to seniors who have homes paid for or with very low mortgages (HUD rules.....don't suggest using some of the companies that 'specialize' in reverse mortgages). Essentially you've sold the house to the agency providing the money, in exchange for a cash stream, but they don't take possession until you die.

The big problem is that usually they don't give you a lump sum, but provide a monthly amount. So, you have to convert the income stream to lump sum, which means you settle for pennies on the dollar, or you have to be able to make preparations on the monthly payment they make. One other possible problem is that if y2k plays out badly, someone else owns the property, but they may not be in any shape to make payment to you. Can you get your property back? I don't know.

That might not be a bad idea, if you can dedicate the income stream for your preparations.

-- Rocky Knolls (rknolls@hotmail.com), June 05, 1998.


If it gets as bad as some of the predictions say...none of us will have to worry about our mortgages ever again.....Possession will be all of the law. Hard to know how to plan, isn't it?

-- Donna Barthuley (moment@pacbell.net), June 08, 1998.

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