Has anyone figured out an alternative to a reverse mortgage for a cash strapped parent?

[Anonymous]

Is there a local affordable senior housing culex nearby? If so, convince him to put his name on the waitlist or do it for him, then step back if he refuses to listen and talk about moving. He may just have to hit bottom and be forced out. Not your job to keep him exactly where he wants to be especially if it’s unreasonable. He’s doing this and being irresponsible because he’s been allowed to function this way for decades. Someone always stepped in to fix it. Stop stepping in. If he’s healthy, this can easily go on for another 20 years.

[Anonymous]

Anonymous wrote:Is there a local affordable senior housing culex nearby? If so, convince him to put his name on the waitlist or do it for him, then step back if he refuses to listen and talk about moving. He may just have to hit bottom and be forced out. Not your job to keep him exactly where he wants to be especially if it’s unreasonable. He’s doing this and being irresponsible because he’s been allowed to function this way for decades. Someone always stepped in to fix it. Stop stepping in. If he’s healthy, this can easily go on for another 20 years.

*housing complex

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why wouldn't he do a reverse mortgage?

Fees and interest are higher than normal mortgages, and the interest keeps compounding even if you don’t take more principle out. 10% end in foreclosure.

How can they foreclose though? I thought that a reverse mortgage allows him to live there until he dies or moves out, which it seems he doesn't intend to do, so he'd be able to live there for as long as he can live independently, it just doesn't leave any inheritance to his kids. That seems like a more reasonable decision for the dad than liquidating and spending all his assets that he needs to live on for the rest of his life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My widowed father lives out of town in a middle cost of living area. He lives in the house I grew up in. The primary mortgage has been paid off for several years but he still has a HELOC that was taken out decades ago and has never been repaid apart from interest payments. He has been notified that he will need to start paying a certain amount towards principle based on (I assume) the original terms of the HELOC. He has maybe $30k or so in cash and stocks plus the value of his home equity and that's it. He otherwise lives on social security which isn't that high because he took it at 62. He could probably pay off the HELOC if he liquidated all of his other assets but he doesn't want to do that because he won't have any money for home repairs, etc. and as the house is getting quite old, it's not an outlandish concern. He adamantly does not want to move. He already has a roommate who does pay rent but I don't think it's market. He wants to do a reverse mortgage which my sibling and I and other family members think is a bad idea. Can anyone think of any options not listed below, and/or does anyone have any thoughts on the options?

1. Sell the house and move somewhere more affordable. (He doesn't want to and doesn't know where he would go.)
2. Do a reverse mortgage (I think the fees and interest are predatory and have a very real concern that if he "lives too long" essentially he will be evicted from his own home. The stats on that are pretty bad, especially past the 10 year mark. He's in his early 70's and in ok health but not stellar.)
3. Try to refinance the HELOC and get a more reasonable payment that is still taking care of some principle. (I'm not sure this is even possible without a job, and he would likely need to spend down current assets to make the payments.)
4. Pay off the current HELOC and essentially be out of cash. (But then how would he pay for repairs ie: roof or HVAC, etc.)

Has anyone been in a similar situation and what ended up happening?

Early 70s in ok health means he needs to get a part-time job. It wouldn’t take much to earn enough to make a $650 payment (plus taxes).

+1. Especially if you can refinance the HELOC to get the payment a bit lower. Both may parents are in their 70s and have part-time retirement jobs in part because they want to live somewhere they can't really afford on their retirement income alone either.....

[Anonymous]

THe reverse mortgage will allow him to stay in the house. However, if his health declines and he needs to pay for elder care, assisted living or skilled nursing, you're out of luck because teh equity will decrease.

we had to place my mom in skilled nursing and she had a reverse mortgage. We ended up doing deed in lieu of foreclosure. What a mess.

[Anonymous]

Anonymous wrote:Can you not cosign onto a new mortgage/Heloc? Alternatively, could he sell part/all of the house to you?

DO NOT COSIGN anything OP. It's your father's financial mess. Protect yourself and your family

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why wouldn't he do a reverse mortgage?

Fees and interest are higher than normal mortgages, and the interest keeps compounding even if you don’t take more principle out. 10% end in foreclosure.

How can they foreclose though? I thought that a reverse mortgage allows him to live there until he dies or moves out, which it seems he doesn't intend to do, so he'd be able to live there for as long as he can live independently, it just doesn't leave any inheritance to his kids. That seems like a more reasonable decision for the dad than liquidating and spending all his assets that he needs to live on for the rest of his life.

The interest keeps accruing (reducing equity even if you don’t take more funds out) and once equity drops below a certain amount they start doing home inspections and can evict you for not properly maintaining the home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why wouldn't he do a reverse mortgage?

Fees and interest are higher than normal mortgages, and the interest keeps compounding even if you don’t take more principle out. 10% end in foreclosure.

How can they foreclose though? I thought that a reverse mortgage allows him to live there until he dies or moves out, which it seems he doesn't intend to do, so he'd be able to live there for as long as he can live independently, it just doesn't leave any inheritance to his kids. That seems like a more reasonable decision for the dad than liquidating and spending all his assets that he needs to live on for the rest of his life.

The interest keeps accruing (reducing equity even if you don’t take more funds out) and once equity drops below a certain amount they start doing home inspections and can evict you for not properly maintaining the home.

Thanks, never heard of that! That's crazy.

[Anonymous]

How much is 1-bedroom rental? He can get it paid from the sale of the house most likely and never touch the principle.
Now he would have no roommate, keep all his SS and maybe even get a part time job for extras.
When they raise the rent, he can move. I just did and kept my former rent. I still have an option to move to a cheaper neighborhood or even a studio.

[Anonymous]

Why don't you and your sibling pay it off?

[Anonymous]

Anonymous wrote:Why don't you and your sibling pay it off?

What would keep OP's spendthrift but mentally competent dad from getting a reverse mortgage anyway? Or acquiring some other new debt to get a quick pot of money to support his lifestyle? Do not throw good money (yours and sibling's) after bad when there is no way to control his spending.

[Anonymous]

How is he currently paying for the other bills, like property tax and home insurance? If he gets a reverse mortgage, what happens if he doesn't pay those bills?

[Anonymous]

When was the last time you visited him at the house? I'd want to get a good look at his condition, the condition of the property and that roommate. I would take pics of the interior and exterior to show for an independent appraisal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why don't you and your sibling pay it off?

What would keep OP's spendthrift but mentally competent dad from getting a reverse mortgage anyway? Or acquiring some other new debt to get a quick pot of money to support his lifestyle? Do not throw good money (yours and sibling's) after bad when there is no way to control his spending.

I didn't see anything about him being spendthrift. Op said he retired a little early, this loan is decades old, and he'd been paying what he was rrequired for the interest. He has cash savings. It sounds like the mother died early and its difficult for him to pay the loan principal on just his SS without touching savings. Op can decide but for me, this guy doesn't sound terribly irresponsible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why don't you and your sibling pay it off?

What would keep OP's spendthrift but mentally competent dad from getting a reverse mortgage anyway? Or acquiring some other new debt to get a quick pot of money to support his lifestyle? Do not throw good money (yours and sibling's) after bad when there is no way to control his spending.

I didn't see anything about him being spendthrift. Op said he retired a little early, this loan is decades old, and he'd been paying what he was rrequired for the interest. He has cash savings. It sounds like the mother died early and its difficult for him to pay the loan principal on just his SS without touching savings. Op can decide but for me, this guy doesn't sound terribly irresponsible.

.

In a subsequent post, OP wrote the following:
"Delayed gratification was never his thing. Money has always burned a whole in his pocket. We were not financially stable growing up."