Reverse Mortgages Are SCAMS!

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SUMMARY
In this video, Dave rants about reverse mortgages and the risks involved with them. He reads from a Washington Post article (linked below) that discusses a 92-year-old woman in Washington D.C. who has a failing reverse mortgage and is facing foreclosure on her home. This is a problem that an increasing number of seniors in America are facing.
Reverse Mortgages Explained:
What is a reverse mortgage? A reverse mortgage is a federally owned mortgage that allows cash-strapped seniors to borrow against the equity their house has built up over the decades.
How does a reverse mortgage work? A reverse mortgage is just like a regular mortgage, but instead of making payments on your home’s principal, you take payments from the equity you’ve built.
What are the disadvantages of reverse mortgages? There are three main reverse mortgage disadvantages: you’re giving away your net worth, you’ll have extra costs on everything, and you’ll likely end up owing more than your home is worth-which means you could eventually lose your home altogether.
Should I get a reverse mortgage? Dave warns that you should never get a reverse mortgage. With interest rates doubled and foreclosure rates constantly rising, it’s never a good idea to get a reverse mortgage.
RESOURCES
Learn more about reverse mortgages: www.daveramsey.com/blog/how-r...
Want to hear more of what Dave has to say? Listen to a caller ask Dave about reverse mortgages: • Should I Get A Reverse...
Read the Washington Post article here: www.washingtonpost.com/busine...
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Опубликовано:

10 апр 2018

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Комментарии : 327

@zamfully 4 года назад

If you fail to pay your taxes and insurance on any mortgage you may lose your home.

@unlimitedpower4101 3 года назад

@@naddarr1 yep, either the bank owns it or the state owns it smh

@jasonrodgers9063 22 дня назад

Or when you own your home free & clear ANYWAY. Nobody actually OWNS a home, we only RENT them from the government.

@dr.reviewsfrompersonalexpe7603 4 года назад

You lose your home if you don’t pay your taxes whether you have a mortgage or not

@ThreePuttBogeys88 4 года назад

The plus side is if you lose your home, you don't have to pay any property taxes.

@Quran4mercy 2 года назад

They can only recover their losses, not the whole house.

@jenniferb3266 12 дней назад

@@Quran4mercy Property taxes are considered a FIRST LIEN on your property in the sense that IF you don't pay your property taxes they will sell your house for the taxes. Plain and simple.

@gagglejones8158 5 лет назад

These property taxes are driving millions out of their houses. And the bank cleans up and snatches the house in the end. One two punch.

@unlimitedpower4101 3 года назад

If you don't pay your mortgage, bank takes it. If you don't pay your property tax, the state takes it. No one really outright owns property smh unless if states have certain property tax exemptions.

@greenearthblueskies8556 3 года назад

@@unlimitedpower4101 like my state does for seniors🥳🥳🥳

@drsparwaga 5 лет назад

Just know when a celebrity endorses something, 1) they are paid to do it 2) they don’t know what they are promoting, i.e. they are imbeciles 3) it is most likely a scam.

@greenearthblueskies8556 3 года назад

💯

@danielbutcher5836 6 лет назад

I’m so thankful for these sub-10-minute clips on specific topics.

@931tow 3 года назад

So, in other words these people were going to lose their homes regardless since they were not going to be able to pay their property taxes allowing the county/states they lived in to seize their property. My Father and my sister's in-laws both did reverse mortgages before they passed and they worked out quite well for them. After my father died we were able to sell his house,pay off the loan and keep the rest. Don't blame the lenders because people don't bother to read the requirements. And, No... I am not a lender...lol

@bradhampton6457 4 года назад

Best thing is to be debt free when you retire. I have NO mortgage. Only my utility bills and a couple credit cards with low balances.

@Sarah33Kaufman 2 года назад

I still don’t understand why reverse mortgage is bad. Everybody has to pay property tax and insurance even if they own it. So I don’t know what was the purpose of bringing the tax and insurance up?!

@MsBiggles51 Год назад

Exactly. And the reverse mortgage means they have more money to cover them.

@ashleyhavoc1940 5 лет назад

It's not 'failed'.... It's doing exactly what they want it to. These folks just aren't dying fast enough to suit the lenders.

@davidpetersen1 Год назад

No.. they aren't dying fast enough to maintain the lifestyle they are accustomed too.

@peterrose5373 3 года назад

Strictly speaking the reverse mortgage doesn't cause you to loose your home, It just allows you to delude yourself into thinking you're going to keep the house that you're actually going to loose either way. It does mean that when you DO loose the house, several years later, you're dead broke, having already spent all your equity. so that's fun. If you're gonna do the reverse mortgage thing, you better hope you die before you spend all of it...

@davidpetersen1 Год назад

Yes.. absolutely.

@TopShot501st 4 года назад

What makes people think stamping 'Federally Insured' on something has ever been a wise financial decision? From student loans to this....

@5argetech56 6 лет назад

Mr. Ramsey, every single reverse mortgage ad on RU-vid I have seen, have disabled comments for the video. Gee I wonder why?

@unlimitedpower4101 3 года назад

They wanna own your house while you're paying rent to the bank.

@geoffdearth8575 6 лет назад

And those celebrities who have been endorsing these should be ashamed of themselves.

@MichaelAllen-lx3nq 5 лет назад

Learn before you speak

@garykinard7553 4 года назад

Sickening, I paid my home off in a lump sum after 5 years ownership. I called the loan company and they did not want to give me the pay out. Actually they never did, They offered me a loan on the home and kept routing me to a different salesman. I finally just sent in a check and they did send me back the difference with a release of lien. I actually thought i would have to hire a lawyer to pay off my home. And lawyers are just as bad as the banks and loan companies IMHO. It is a huge problem for sure.

@davesmietanski5988 3 года назад

You are disingenuous Dave No matter if you own your home or have a standard mortgage or reverse mortgage, if you don’t pay your taxes and insurance, you will lose your home. A reverse mortgage had nothing to do with failing to pay your real estate taxes and homeowners insurance. If I am wrong, please correct me and I will stand corrected.

@jimmack1071 2 года назад

good point...Dave

@oppie11 2 года назад

@@jimmack1071 😆

@JB-kx9bx 3 года назад

If you have a house with that much equity you probably need to sell it and move to a cheaper area with low property taxes. I live in Houston now but no way I'd retire here. The property taxes are absurd.

@MsBiggles51 Год назад

So I should move out of the house I've lived in for 30 years, leave the friends and support network I've built up and go and live in a cheap place somewhere where I know nobody? I'm glad you're not my advisor.

@rustyscrapper 6 лет назад

The greatest investment you can make for retirement is to pay off your mortgage in full and go into retirement mortgage free -said no investment consultant ever.

@tessahiggins8142 5 лет назад

Mine said that. He's the one who got me to get out of my higher interest rate, longer term mortgage into a shorter one. Then we shook out all the nickels to make extra principle payments.

@philipnguyen3107 5 лет назад

You still have to pay taxes and insurances. No escape.

@SCOTTEDM 4 года назад

@@philipnguyen3107 Still drastically less than taxes, insurance & a mortgage. Unlike Tessa, my interest rate was super low but I did go from 30 to 15 yr and I still make extra principle payments.

@youngkingdom8131 4 года назад

røb It is as if they’ve never heard of the 2 inevitabilities: Death and Taxes.

@channell11 3 года назад

Investing for the future is as much about risk management as it is about building wealth. Paying off your home before retirement (as well as shifting to more stable investment options) means you incur less risk and protect the wealth you've already accumulated. Who wants to be trying to make a house payment when you're retired?

@steverincand6005 4 года назад

just a heads up, this video is a couple years old and the information is not as accurate now...there were some serious generalizations in this video that can be twisted to make the reverse mortgage look like a scam. it is no different than other mortgage products on several points and it is drastically different on other points. If you want to do something with your home, do the research from UNBIASED sources that can provide facts on the pitfalls AND the benefits. yea ok 18% "failing" ratio if you only call it a foreclosure and do not explain why it happened. Many of the seniors that get a reverse mortgage don't have any heirs to leave the property to, and when they pass away there is a legal process that is implemented in order to sell the property - called foreclosure. so to make the blanket statement that so many reverse mortgages end in foreclosure is only part of the picture and is misleading for all of the people that COULD benefit from eliminating a mortgage payment AND having the option to include the tax and insurance payment in the terms of the reverse mortgage. I have used dave ramsey's concepts and believe in his plans for eliminating debt, but he is wrong to call the reverse mortgage a scam. The companies that don't follow the regulations in place to protect the consumers, those are the ones that are giving it a bad name.

@john1425 4 года назад

I don't understand. She lost her home because she didn't pay taxes right? That has nothing to do with a reverse mortgage.

@channell11 4 года назад

She's obviously in a bad spot and not good with money. She didn't account for the fact that when she had a mortgage taxes and insurance were taken out of the monthly payment. Once mortgage payments are done or you get a reverse mortgage you have to pay them yourself. She'd have been better off selling the property and downsizing with some equity.

@JustMe-999a 5 лет назад

It didn't "cause" them to lose their homes. If they can't pay their taxes and insurance after receiving 100's of thousands of dollars, they were going to lose their housea anyway.

@johnhodg8400 5 лет назад

better to sell.

@Followerofthekingofkings1969 4 года назад

Yess

@greenearthblueskies8556 3 года назад

Never thought about it like that...you’ve got a point

@bobdees6428 11 месяцев назад

JustMe -999a , Thank you, I have met several people who have done reverse mortgages and they are still living in their houses. Here’s the problem; if someone has a spending problem- then a reverse mortgage is a horrible idea ( BUT ) here’s the rub because of spending habits they were going to lose it anyways. Taxes and insurance are required to be paid regardless of whether or not you have a mortgage . Dave is correct that the fees are ridiculously high, but he’s missing the point if a senior citizen can limit their spending then it is still a good idea. I’ve had a chance to witness a few family fights when the parents die , it isn’t pretty. Leaving someone a home sounds like a great idea till the fights , lawsuits and complete destruction of the family happens..

@NessaEllenesse 5 лет назад

Remember the housing crisis? We have another on the way as Seniors loose their home, these home flood the market and cause everyone else's property value in the neighborhood drop

@sacredheart9053 4 года назад

That's totally fine. Young couples can now afford their own home and start a family.

@hv9988 5 лет назад

So takeaways - 1)elderly people run out of money due to either unforeseen expenses /improper financial planning/or some other reason 2)Elderly person takes out a loan on their property to get some needed cash. 3)That additional cashflow still doesn't cover all their expenses due to improper handling of money (edit: or some other reason, though if you did your math/knew how to handle your money you'd probably figure out if a reverse mortgage would be enough or if another option were better) 4) They decide the property taxes/insurance/fees (expenses they'd have whether they took a loan out on the home or not) are the least important thing to pay for??? 5) They end up losing their home because they owe $$$ in taxes/insurance/fees. I agree reverse mortgages are a bad idea. You're better off selling the house and moving to a smaller home/rv or mobile home/ condo/55+ community/renting and pocketing your home value without random strings attached - but the reason these individuals are losing their homes isn't because of a reverse mortgage.

@johnhodg8400 5 лет назад

still a bad idea.

@eliascastillo1641 5 лет назад

My problem with this is that the government has no business charging 90 year old people property taxes I’ve That’s my opinion. Shameless leeches.

@Followerofthekingofkings1969 4 года назад

Here in the home of the brave and land of the free!!

@heinzpilot 4 года назад

Nobody owns there home in America. As long as property taxes exist.

@dennisleslie8997 4 года назад

Right on Scott.

@gpcode3827 4 года назад

Thank you very much for posting this- our reverse mortgage brings us regret and alarm at how quickly the available equity, which was far below the value of the house, is been depleted in interest that accelerates each month- it would have been much better to simply sell the house and move to a more affordable place to live- watch out too for reverse mortgage reps surfing sites like this attempting to do damage control for their industry.

@Quran4mercy 2 года назад

Sell and pay it out. Fast.

@woxyroxme Год назад

Wow! The reverse mortgage charges interest? Tom Selleck never said anything about that. My mom almost got a reverse mortgage 15 years ago, luckily I talked her out of it

@DJVARAO 4 года назад

This is a pawn shop loan. A credit line that makes you poor.

@theronbassett5505 3 года назад

So basically she took a "title" loan on her house?

@greenearthblueskies8556 3 года назад

Exactly

@ThePeterDislikeShow 3 года назад

age in place, more like be imprisoned in place, be stuck in that house because going to a nursing home or moving in with children will require a big payoff.

@MsBiggles51 Год назад

Rubbish, at least for me. I'm 71 and have been in the house for 30 years. I have a support network and friends here. I know the district. If I sell and 'downsize' I'd have to go somewhere and start over again. Not everybody has children you know, and as far as I'm aware I can't take the house or the money with me when I die. Since I practically own my own home I have a lot of equity, and have calculated that with an RM I will be worth nothing by the time I'm 114 years old. If I'm still around, that's when I'll go into a nursing home.

@michaelendresen1817 5 лет назад

I am a Sales Manager at a Reverse Mortgage company, so I can confidently say I fully understand how they work and the risks involved. For Dave to say that this is a scam is completely and utterly ridiculous. I can agree that his is not the best option for all seniors, but what Dave is lacking to see or comment on is the better option for these Seniors who are in need of a Reverse Mortgage. Many seniors find themselves with low cash flow, living month to month, one financial emergency away from losing their home. With a Reverse Mortgage, they could take money out without having to pay back that mortgage in their lifetime. If you don't pay the taxes on your home, any mortgage company reserves the right to foreclose on you OR slap a mandated tax payment on you included with your monthly mortgage payment. The Reverse Mortgage has helped SO many people with no other options. So Dave, I ask you this. If you found yourself living in your home, with only $1500 in the bank, living on SS of $1200/month and a mortgage payment of $900/month, and you had the option of doing a Reverse Mortgage to get rid of the mortgage payment, what would you do? I would like to see what other "Better option" you would suggest, unless you're suggesting they just default on their liabilities including their mortgage payment. It's sad that you jump in to make conclusions and steer so many seniors away from helping themselves better their situation ALSO, FYI- if you think about a Reverse Mortgage as any other mortgage, except that you are not REQUIRED to make a monthly mortgage payment, where is the down-side in that? Today, mortgage rates are pretty competitive with normal mortgage rates. You should educate yourself.

@johnhodg8400 5 лет назад

you are biased.

@davidpetersen1 Год назад

@@johnhodg8400 🤣🤣🤣🤣🤣🤣 Your gift for the obvious is unparalleled in this instance. And.. he's not wrong.

@robmiller3464 3 месяца назад

Dave Ramsey is dead wrong. Just because someone considers a Reverse Mortgage as a benefit doesn’t mean there biased, it means they did there research. Each person has a unique set of circumstances and for some a Reverse Mortgage is the right thing. Do your research and read. Ask questions and don’t trust anyone except your instincts.

@jimkelley1000 5 лет назад

I understand the problem with reverse mortgages, but we have about $1/4 million in home equity - free and clear. We are just retired and can live fine on savings, pensions and SS. BUT we have no kids and our only "plan" is to give it all to the local Humane Society or something when we die. Is there a sensible way to use up some of our home equity for travel or other things we may enjoy in retirement? Possibly you have already done a show on such a happy dilemma? Many thanks Dave!

@WaT3rb0y619 5 лет назад

Is the lady in question happy Gilmore’s grand-ma?

@johnhodg8400 5 лет назад

yes.

@salvadorreynoso5837 4 года назад

Thank you sir, I always had my doubts now I know better, blessings to you and family

@adamoates3718 5 лет назад

She should sell the house about 10years ago and moved into Apartment

@shudtt09 6 лет назад

Selleck and Winkler needed the $ to stay in their homes. Oooh, the irony.

@alejandromoran5099 3 года назад

Hrmk

@alejandromoran5099 3 года назад

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@alejandromoran5099 3 года назад

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@alejandromoran5099 3 года назад

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@alejandromoran5099 3 года назад

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@MrRdmiller 5 лет назад

I’ve heard enough. Same thing my Dad told me. Thank you

@ensignmjs7058 4 года назад

I like your tux.

@jnthn9797 5 лет назад

2008... that was over 10 years ago. Legislatures and laws have been passed since then. Reverse mortgages now aren’t bad products if it makes financial sense for you. Same as mortgage loans. (Remember in 2006 you were still able to get a loan with no income docs, assets or employment verification) A LOT has changed

@HeritageWealthPlanning 6 лет назад

You're blaming the reverse mortgage for not paying the property tax??? I don't get it. If you had a conventional mortgage and didn't pay the property tax you'd be foreclosed too. If you had a home free and clear and didn't pay the property tax you'd be put out by the county too. Why blame the reverse mortgage??? Then put the property tax in escrow like a traditional if this is the issue! not a difficult solution

@ariefraiser140 5 лет назад

The fees, interest rates, and fine print of multiple things that can cause you to lose your house. These are seniors on a fixed income. I live in the DC area. And the prices of homes have increased ridiculously in the area. Which means real estate taxes and insurance have also increased dramatically. Not a good thing for an elder person on a fixed income. These contracts really are sophisticated and have way too many things that can trigger a foreclosure. I would insist my grandmother sell the house before getting a reverse mortgage.

@HeritageWealthPlanning 5 лет назад

Oh, I know about the real estate in the DC area. Heck, we lived down by Jack Taylor Toyota in Alexandria for a number of years, back in the 90s Before Delray became a hipster paradise. They won't let my kind even think about going through that area now!

@mikem1464 5 лет назад

@@HeritageWealthPlanning $416k worth of property tax and insurance apparently

@djwoll623 5 лет назад

MICHAEL MARTINEZ the $416k is the loan balance that she owes. It is due because she is failing to pay her property charges. That is stated very clearly many times. If you fall behind on property charges, you could potentially enter foreclosure and the loan would become due. Nothing different than a traditional mortgage. It is not the lender’s fault, not the program’s fault, that they were saving her money and she then fell behind on her property charges.

@FilynciaGreer 5 лет назад

Is property tax escrow similar to a 100% homestead property? Are they the same?

@AndyMorrisArt 4 года назад

why or how could you get $400,000 at closing and a few yrs. later be unable to pay $6000 in taxes? did they foolishly squander all that money? did they not invest any of it?

@kathrynhuckelby6796 4 года назад

Nationstar needs to be sued! I had a mortgage for 25+ years NO ISSUES. My loan was sold to them...then it was a 6 year mess that ruined my credit. They need a massive class action lawsuit. One of the many things they did...was my mortgage was due on the 1st...there were times I had to make it on the 21st or 23rd...it created a late fee which I accept to be ok. HOWEVER....they recorded every single payment on credit reporting as over 30 days later. Try talking to those folks..you get no where. They are criminal and need to be SUED! It was many actions I saw. Fees of $150 ..and could get NO answer as to what it was for.

@roncahalan6051 5 лет назад

Dave need to take a much deeper look at this program. The new program allows for payment of taxes and insurance. The homeowner would have had to pay taxes and insurance regardless of what kind of mortgage. Many of their only options would be to sell and nor stay in their home. Yes, the fees are higher and the rate is about ½ % higher due to the risks on reverses. So your only option is to sell and rent?

@Christopheralb 5 лет назад

Nice to see another person exercising some informed decision making. Even if these people didn't owe anything on their homes, they could still lose their home by not paying property taxes. It's amazing how many sheeple are going along with Dave without thinking just a little bit harder lol.

@channell11 3 года назад

That still doesn't change the fact that it's not a good deal. If you plan to stay in your home, why wouldn't you plan financially so you would be able to when it's paid off and you're retired? And yes, downsizing is always an option. You can sell and buy a smaller house, or rent if you so choose. If a reverse mortgage is the only way you can stay in your house, there were some mistakes made along the way.

@johnnastrom9400 6 месяцев назад

@@Christopheralb It is a bad deal. Stop parroting the crap you have been told to recite from the RM industry.

@Christopheralb 6 месяцев назад

@@channell11 I agree financial planning - key word planning - is a requirement of life, not just retirement. However, you have to consider that back in the day most everyone got a pension for their long term service to a company + some SSI and boom, you're good. Now, the onus is on oneself to plan for retirement and most people have the financial literacy of a rock. I would plan my finances to avoid taking out a reverse mortgage, but for a lot of people without much if any retirement savings, a reverse mortgage can be a god send. No housing payment? Sign me up!

@Christopheralb 6 месяцев назад

@@johnnastrom9400 Please explain why you think it's a bad deal. Surely you must have a detailed explanation as to why? Otherwise, if you're JUST going off of what Ramsey said in the video then you're just being lied to lol. The whole thing he's basing his argument on is foreclosure due to inability to pay property charges because a financial assessment was lacking. News flash dude, this is EXACTLY what happened during 08. We had a ton of HUD/normal loans go bad because people couldn't make their payments! It wasn't until soon afterwards that requirement were put in place like a max DTI to approve someone to ensure they could make the payments. Nothing Ramsey said in his video actually, specifically, pertained to a reverse mortgage. In Ramsey's video description above, he also states "you'll likely owing more than your home is worth - which means you could eventually lose your home altogether." Absolutely not true. The fact of the matter is IF the mortgage amount grew to be higher than the value of the home, it doesn't matter. You will not be held liable for it and when the home eventually gets sold, either by you or your heirs, whatever proceeds the home gets goes towards the mortgage. Afterwards, it's zeroed out. Your heirs are not responsible for mortgage at all.

@MsBiggles51 Год назад

I'm considering a reverse mortgage. I'm 71, asset rich (~$450,000+) in house, but living on a pension and don't have the cash flow to do the required repairs/renovations. I haven't had a holiday for 25 years because of caring for elderly parents (still caring for 95 year old Dad). I have no dependents or heirs. Why would a reverse mortgage be a bad idea? I can have one for $100,000, take some out immediately for repairs/renovations and holiday (~$30,000) on which I would be charged the interest -- which I don't have to pay -- and the rest would be there to spend, and no interest would apply until it's spent -- and I don't have to pay it anyway. It would allow me to stay in the house I've been in for 30 years, keep my support network and friends close by. This video ignores the fact that taxes etc. have to be paid anyway and they would lose their house. With a reverse mortgage there's the cash available to pay the taxes. The video suggests the RM can go into default -- but it can't since no payments are required. It's the taxes not being paid that go into default, which can happen if the home is owned outright. The interest rates and fees are a rip-off? Maybe, but I never have to pay them, so why should I care? I don't have any heirs. Can someone tell me why this is a bad idea for me?

@chriswilliams4364 3 года назад

You must ALWAYS pay your property taxes

@johnnastrom9400 6 месяцев назад

Another scumbag from the reverse mortgage industry.

@TanisC 6 лет назад

I knew this was a scam as soon as I heard about it on TV

@imbonnie 6 лет назад

ditto

@ethandowler4669 6 лет назад

the key here is “heard about it on tv” haha

@TanisC 6 лет назад

+Ethan Dowler So true. lol

@DyingToLive1987 5 лет назад

What's the scam?

@djwoll623 5 лет назад

If you understood the product, you would understand that it is not a scam.

@davidstewart4149 5 лет назад

This is garbage, Dave. You're talking about someone foreclosed because she stopped paying property taxes and insurance on her home. If she had a conventional mortgage and stopped paying property taxes and insurance (she'd have had less money to do so if she were paying a mortgage), what would happen? Foreclosure. If she owned the home free and clear (as she did before she got the reverse mortgage, which she took money out of with no obligation to pay back) and stopped paying property taxes and insurance, what would happen? Foreclosure. The reverse mortgage was not the cause of her foreclosure. Her failure to pay property taxes and insurance was. The reverse mortgage had literally nothing to do with her being in jeopardy of losing her home. It was entirely caused by her failure to pay her property taxes and insurance. Its only role was that the lender was foreclosing instead of the city or county which would have foreclosed because she didn't pay property taxes. Property taxes always the senior lien on a home.

@williamjones7821 5 месяцев назад

Why can't Dave print out a PowerPoint presentation and hold it up to the camera for the RU-vid audience? I wish Dave would use some numbers for a hypothetical $200K house. Borrow $133K, but they take their fees out of that. So you really only get X (let's say $97,800). But the $133K you owe now gathers interest at double the rate of a regular mortgage. A visual representation with real numbers would help a lot of people (although, admittedly, not the radio audience). And with a reverse mortgage, you are still responsible for, say, $2,500/year property taxes, $1,500/year insurance and $3,000/year utilities. And the upkeep like gutters / shingles / HVAC / water heater. And if the owner is out of the house for more than 30 days, say, for a hospital stay, it's "game over". And if you don't make payments on the $133K, your equity will drop until it's "game over". It sounds like "you can stay in the house until death without paying back the loan" is only true if a whole lot of conditions are met. And even if you meet them all, and you die in the house before your equity drops to zero, you still paid lots of fees and interest for the privilege. And if you didn't die with lots of life insurance, the children won't be able to pay off the reverse mortgage and inherit the house.

@sergiosantana4658 3 года назад

Currently a 400k home would guarantee you approximately 12k annually regardless of market conditions through the use of a reverse mortgage at an opportunity cost of 840k . But Dave would tell you don't do it instead all you need is $150k to draw down by 8% because you will earn 12% on that money at an opportunity cost of 1.4 million now that's Freaking Astro Nomical.

@daveheel 6 лет назад

you don't believe tom selleck?

@evegreenification 5 лет назад

daveheel If we can’t trust Magnum and the Fonz, who can we trust?!?!

@peroron2000 6 лет назад

The loan itself does not cause anyone to go into foreclosure. The reason that this borrower is in foreclosure is because she has not paid her property taxes. That would still happen even if there were no mortgage at all in place. I think it is irresponsible of Dave for not explaining this point.

@vwatts8738 5 лет назад

A HECM was a blessing to our parents. As in some cases Ramsey's advice is half-cocked. My parents wanted to and were able to stay in their home - aka "age in place". All I'm hearing in this video is that people who were not paying their taxes lost their homes. That would happen with any mortgage loan. They would be pleased to know that the equity remaining in their house after 15 years of being in an HECM resulted in a very substantial inheritance for my 3 siblings and myself as well as their church. GET THE FACTS!! Don't just believe everything Ramsey says. Peace!

@djwoll623 5 лет назад

sv650Sftw you are confused. It is the homeowners fault for falling behind on payments.

@MichaelAllen-lx3nq 5 лет назад

@sv650Sftw No Payments are due on a Reverse Mortgage, You cannot fall behind when No Payment is due...Learn before you speak.

@davidpetersen1 Год назад

@@MichaelAllen-lx3nq Taxes qualify as "payments". Think before you text.

@zuverlassig2jl 4 года назад

My FIL did this. The house was in his name. He died without a will or a trust and no insurance was was a huge surprise since my MIL talked often about life insurance policies they both had. They ended up taking the house from MIL. Granted, I'm sure she didn't bother to do things she may have needed to do to have a shot at keeping it. That's just how she is. She is delusional about things in life and has always had a husband who took care of any and all things like this along with working at all, bill's, cleaning the house...whatever. She is still playing "incapable" when it comes to anything she doesn't want to or feel like doing or that involves real effort or wk. Might sound like I'm just venting here, and maybe a little, because it annoys me A LOT. It's time to step up now woman and many if us have told her this....but my real point is they (the reverse mortgage plan sales people) made it sound like they could keep the house automatically if one of them where to pass away and that is would be a natural and easy thing as the spouse. Well. Not so. She couldn't up with the $$ or whatever and lost the house.

@suebotchie4167 Год назад

Had he cared about her, he'd of provided her with some life insurance, but evidently she wasn't important to him. Happens all the time, and you wonder why younger women are so caustic. Well, duh!

@rickkoehn313 5 лет назад

So if someone didn’t pay their taxes on their property, it WOULDN’T be foreclosed on? When did this start?

@vwatts8738 5 лет назад

@alicekbonilla 4 года назад

“Astro freakin nomical!”

@fpl_bailey 6 лет назад

The true question is why a 92 year old widow have a 3 bedroom house 🤔🤔

@outdoorsnevada4138 6 лет назад

koolyo2foots sentimental value because it was her and her husbands house. My parents have a 5 bedroom. My mom wouldn't sell unless forced to. She will likely hold onto the place as long as she can because it is her home. Plus dependant where she lives there may not be some small apartment she can move into or such.

@jesbsnrn 5 лет назад

Isaac Spencer good point

@Followerofthekingofkings1969 4 года назад

She should rent the extra rooms out

@sercanserj7804 5 лет назад

Dave if you have a plan to pay it early or take it as short term loan that the banks wont give at age 52 to my dad. We got £170k out like this and put it as a deposit on a new house in harold wood, romford, uk Anyone who researches the area or knows it will tell you house prices almost doubled within 5 years Paid 365k for the house and sold it 3 months ago 535k. This happened within 2 years. Loan paid off and AFTER ALL FEE'S we ended up making £65k-70k in 21ish months plus rental income for 18 months im not counting.

@johnhodg8400 5 лет назад

that's good, you will only lose one house now.!!!!

@philipnguyen3107 5 лет назад

God bless the thinking man.

@ensignmjs7058 4 года назад

If there's a 14% default rate then does that mean there's an 86% success rate? Just asking. I don't own a home and don't have a mortgage.

@nicoledenning8090 3 года назад

86% success rate yet he says it's a "complete failure" ummm okaaay

@colin1818 3 года назад

@@nicoledenning8090 - So if it had a 99% failure rate would you still be making that comment? Afterall, you still have a 1% success rate! At what point does it transition from "success" to "failure" in your mind? What he's saying is not untrue.

@MsBiggles51 Год назад

It's impossible to default on a reverse mortgage as there are no payments. The 'default' is people not paying the taxes they would have had to pay anyway. And the foreclosure rate -- many of the people taking out an RM have no heirs. When they die the bank sells the house to cover the debt and the rest goes to the cat or the state. That's called foreclosure. If you think you're going to care about it when you're six feet under, you're wrong. The best thing you can do is own a home, because it's an asset you can draw on later.

@johnbalasa711 4 года назад

So we are stupid to let this happen to us! Not me I am avoiding banks like a plague!!

@johnrandolph6121 6 лет назад

So how many more elderly would be behind on their property taxes if they didn't' have a reverse mortgages as an options?

@razorsedge1854 5 лет назад

Good point. It’s not a scam but a life saver. People need to perform their responsibilities too and that includes something very obvious and which the homeowner was already paying this before the loan was made. To identify this a scam does a terrible disservice to millions of elderly people who need it to survive.

@855MAGICAD 6 лет назад

I knew these were bad just instinctively.. a way for banks to ROB you (some more).. Until now I didn't have the numbers to back my hunch! Thanks Dave!!!

@nightowldragonmon 6 лет назад

855MAGICAD .. it doesn't matter how old you are.If you own a home free and clear and you don't pay your taxes you will eventually lose it to forclosure. It's not a reverse mortgage issue, it's a not paying your taxes issue.

@gargoyles9999 5 лет назад

855MAGICAD Reverse mortgages are great if you hate your family, max out on reversed and when you go and the family is looking to collect theirs nothing there.

@djwoll623 5 лет назад

gargoyles9999 you need to get your priorities straight.

@donaldbey6679 4 года назад

Who was paying the taxes and insurance before she got the loan ? With over 400k, she couldn't pay 6k in taxes ? In New York state, before you can get a reverse mortgage, you must submit to extensive counseling by the state, in which you are made aware that taxes and insurance are your responsibility. As for the increased interest rates, you can accept them or not. The high interest rate also protects the lender should you opt for a guaranteed monthly income for life, and live longer than your life expectancy. If the terms are deemed unsatisfactory, sell, and move into a smaller , more affordable abode. I am a senior, 82 years of age, and have no interest in reverse mortgages other than researching all the pitfalls, and costs associated with them. However, In the final analysis, it behooves the prospective borrower to research fully ANY type of mortgage loan , and always seek legal advice before signing anything.

@gokuss200 6 лет назад

my dad would fall for this scam if me or my mom would let him. (the scam is reverse mortgages not dave ramsey)

@nightowldragonmon 6 лет назад

son goku explain to me how is it a scam. Ill wait ?

@gokuss200 6 лет назад

Dave said the reasons but, the reasons are that it is a loan that pays you a small portion and they take a larger portion at the same time and all of that is coming off your house and when the debt gets high enough most won't pay off that debt and get foreclosed on.

@nightowldragonmon 6 лет назад

There are no changes to ownership. The program only lends a portion or percent so the owner cal leave to family or sell in the future.

@nightowldragonmon 6 лет назад

Taxes must be paid no matter if you have a RM or not. Dave doesn't mention that when he blames the foreclosures on the reverse mortgages.

@gokuss200 6 лет назад

but then you would have to pay them the money if you sell it

@jasonwilkins1969 3 года назад

I really wish there was a good resource to actually learn about these. Everyone who talks about them complains about them but no one actually explain how they work

@razorsedge1854 5 лет назад

It’s not a scam but a life saver. People need to perform their responsibilities too and that includes something very obvious and which the homeowner was already paying this before the loan was made. To identify this a scam does a terrible disservice to millions of elderly people who need it to survive.

@outdoorsnevada4138 6 лет назад

Can be a blessing for some. The issue though is once your paid up they will take the home. But if your real old and need $. You can get that money to cover costs for the remainder of your life. I wouldn't do it in your 60s or 70s. But if your like 80.... most times your gonna die before that money dries up. Anyone can lose their home. Reverse mortgage or not.

@cato451 5 лет назад

Reverse mortgages are a huge scam!!

@kilohjonson 3 года назад

I feel betrayed, I can’t believe Tom Selleck lied to me.

@jjuniper274 6 лет назад

Omg...I know one of those companies!

@djflash7503 6 лет назад

TOM SELL IT. Lol

@loveystar78cloud46 3 года назад

😂😂😂

@ajrocks44 6 лет назад

92? Owes 416K! What is she doing in that house? Forget the reverse she needed to sell clearly, she cant even afford the taxes and the insurance. Plus the majority of the foreclosures with RMs are people that died, but you know facts. Why use them when they don't fit you.

@ChloeRaeofSunshine 5 лет назад

@The Dave Ramsey Show Is @ there a way to reverse a reverse mortgage?

@johnhodg8400 5 лет назад

see a lawyer.

@Twitter_Posts 5 лет назад

see a lawyer.

@BC-rz7zu 4 года назад

Yes, refinance it into a traditional mortgage.

@lusmas99 6 лет назад

So they don't have to worry about taxes or insurance unless they get a reverse mortgage? Also, are the 86% unhappy? Just asking.

@addierosedunlap331 5 лет назад

lusmas99 Mmmkk

@dogdad5264 5 лет назад

Dave Ramsey has lost me here. These are really ridiculous and misleading arguments against a reverse mortgage. I own my house free and clear, but if I quit paying my property taxes I would still lose it. Stupid video.

@Christopheralb 5 лет назад

@sonoftherepublic Totally agree. Dave Ramsey is just spewing nonsense at this point................

@gpcode3827 4 года назад

My family has had to endure a reverse mortgage, and there is nothing ridiculous or misleading about what is presented in the video- when you will only end up getting about 60% of your home's equity, along with interest that accelerates with each month (right now for us interest is over $700/ mo. on a 300k rev mor) , your equity to pay those taxes and upkeep will erode much faster than just selling and relocating to a more manageable place to live.

@Christopheralb 4 года назад

@@gpcode3827 Everything you just said is wrong. You get whatever equity out you are approved for when you initially get the loan in the first place which is guaranteed. Yes, interest will accumulate on the mortgage balance, which you're more than welcome to pay. Though, the whole point of getting a reverse mortgage is to let seniors avoid mortgage payments. This makes it easier for them to retire. Lastly, you are required to pay your property taxes, and HOI just like with any other mortgage. If you have a free and clear home you are still required to pay property taxes, and HOI becomes optional though it doesn't make any sense not to continue paying HOI. Is there anything else I clarify with facts for you?

@gpcode3827 4 года назад

@@Christopheralb Actually, the facts I've posted are not only correct, they are based on 10 years experience of overseeing my family's reverse mortgage. Mom would have been out of here at about 6 years if my wife and I had not moved back in to slow this down. 'What you are approved for' will not be the value of the house, you'll have plenty of erosion of equity, and tying up a 300k house to receive a $1,000 check per month- minus $750 (right now) returned right back in interest equals a net 75% loss of income that was supposed to 'make it easier for them to retire'- and is accelerating toward 100% net loss with each month that passes. No one (or you ;) is going to justify this kind of math to me- and looks just like making mortgage payments that we were supposed to 'avoid'. The line of credit will also not equal the amount of equity 'you were 'approved for'. Contrast this to selling and relocating to a more manageable place to live and banking the difference- even at half the price, there can be plenty left to live on especially with lower taxes, lower cost of living, and much less erosion of your money- If your equity is gone, and you can't pay for repairs or taxes, maybe the bank might not take your house, but the town can- some of those repairs though, if serious enough can earn you a foreclosure if you don't do them, our house was assessed before major repairs became necessary, at this point we don't have enough line of credit to cover them all. Now take out a loan to repair a house we are going to lose? Reverse mortgage: been there, not recommended, sorry.

@Christopheralb 4 года назад

@@gpcode3827 If I were going through that too I'd feel frustrated as well. I don't know what it is, but there's a mismatch somewhere. Your mother shouldn't be paying a dime right now, and especially not that way either. Also, definitely not discounting moving somewhere cheaper. That's totally viable too. I'm curious though, does the mortgage servicer have instructions to apply payments to interest before disbursement? I'll see if I can get some clarification on my end though, and see if I can help you out. My grandmother has a reverse mortgage, and it's worked wonders for her. Your mother deserves the same level of service.

@rickyrick9328 3 года назад

If you outlive the money, you'll lose your home. Don't do it.

@MsBiggles51 Год назад

You don't lose the home ever, unless you stop paying your taxes, which you have to pay anyway. You would still have an income you know, even if it's only a state pension.

@davidpetersen1 Год назад

I dunno.. yes it sucks she's 92 and can't pay her taxes. She probably should have sold out years ago and moved to a more manageable situation. She wanted her 3 bedroom townhouse and she did what seemed best at the time. Now she deals with it. Let's hope you never have to make that choice Ramsey.

@bobbyu8991 Год назад

I thought rv was a ripoff until Ramsey said it was now I don't know because Ramsey is wrong about everything his percentage that he pulls out of the sky is a joke

@geoffdearth8575 6 лет назад

It just seems to me that these things (reverse mortgages) are a relatively recent development like payday loan (sharks). Just another way to bilk the gullible out of their money.

@outdoorsnevada4138 6 лет назад

Geoff Dearth pay day loans are terrible. My grandmother gets them all the time. We tell her not to but she wants her money now and doesn't care it would cost her a bunch of money later in interest. Some people you just can't get through to.

@EnoExplores 6 лет назад

Arggggh. Poor lady. Sad

@dorseymyers7954 4 года назад

Love Dave Ramsey

@Pyroo0 6 лет назад

I have done the monthly budget but I feel like it's pretty hard to follow when you get paid every two weeks. I was wondering if doing a budget every 2 weeks would be better in this case?

@wathak504 6 лет назад

I get paid every 2 weeks and do a monthly budget. I just have a fair idea of what ill be paid for the whole month then split the bills as either before or after that second paycheck making sure to keep roughly 50% of each check as the not strictly spoken for expenses such as food, clothing, and other miscellaneous lifestyle costs. athough I know where each dollar should go in these areas I know I can move the money around. so if I need a little more food but don't need clothes then I take money from the clothing budget or if I need more clothes I take money from the fun budget. You could also do a bi monthly budget theres nothing saying you cant but it probally result in more trips to the grocery store and less flexability

@aliciamartin8240 6 лет назад

yes nothing wrong with breaking it down . we do it every check a separate budget to make sure none of the money escapes :)

@Pyroo0 6 лет назад

thanks everyone

@theshunnedBandersnatch 6 лет назад

Yep; I get paid every 2 weeks and often have variable amounts of overtime pay as well. I do a monthly estimated budget with my expected expenses rounded up to the next dollar. When I actually receive my paycheck, I create a more precise budget down to the penny (it's generally pretty close to my estimate). Anything leftover after paying my bills, I chuck at paying off my loans. I keep track of my actual expenses after the fact as well to see how I'm doing month to month and for the year as a whole. I use an Excel sheet to track it all and it's been very helpful :-)

@hbarudi 5 лет назад

What is a reverse mortgage exactly. Do you really do a second mortgage loan on your house and pay extra? Do you sell your house to someone where they pay you a mortgage? What is this thing why do you need to do another mortgage on a paid off house?

@ShorlanTanzo 5 лет назад

You have equity in a home. This just means, you have full or partial ownership in this property because you bought it and have paid the bank back for some of the amount you owe. A reverse mortgage is adding another lien on to the house and getting a lump sum of that amount. The loan then operates just like a mortgage where the borrower needs to make payments on the plan, otherwise the lender can foreclose on the house. When people say that they took out a "second mortgage" that is a reverse mortgage, with the primary mortgage loan still open on the home. This is different from refinancing their mortgage, and similar but different from a HELOC (which is more like a line of credit, than an upfront lump sum)

@hbarudi 5 лет назад

@@ShorlanTanzo Equity or not, if I complete paying off a mortgage loan in full and owe no more debt on a house, why in the world do I have to take out another loan on the same house that I already paid for? Does not make any sense at all, if my house rises in price, it would be worth selling it for more and then use the extra cash to buy or build a smaller house while keeping the extra money in savings.

@TempoGeko 3 года назад

this is my favorite part 💗 2:26

@danielbutcher5836 6 лет назад

I will admit I wanted to believe Magnum, P.I. when he talked about these...

@miniliebenberg9644 4 года назад

Daniel Butcher I agree. He could sell ice to an Eskimo!

@fedup7416 4 года назад

The home owners are defaulting on a perfectly legal contract, and it's the lenders fault ????. I've used the revers mortgage when I was in financial difficulties and had no problems. It helped me through tough times to raise my family till I got things straightened out. My interest on tne loan was prime +1 % which at the time, was way lower than any other lenders rates.. I feel you are exagerating the facts to prove your point, eg. 5% is not double 3.8 %.If done responsable, the revers mortgage can be very benificial in a tough situation, and a lot of times, the only option we may have.

@Sp33dyBeanz 5 лет назад

So am i understanding this right? If you plan on selling your house anyways then a reverse mortgage might not be a bad idea as long as you sell early enough to pay the loan back and then have some left over.

@Ryan_DeWitt 5 лет назад

Whether you get a reverse mortgage or not, if you can't pay your property taxes, you will get evicted. Kind of misleading.

@djwoll623 5 лет назад

According to a Forbes article, 5% of US homeowners were at least 30 days late on their mortgage payments. So do we need to blame all mortgage products for people entering foreclosure?

@razorsedge1854 5 лет назад

@univibe23 4 года назад

Sounds like they need to be outlawed!!

@cmitchel2006 5 лет назад

How much are you being paid to market the mortgage ad on this video? Your info is 100% wrong! The only scam is this ad.

@Recovering_Californian 5 лет назад

If you're that old what other options are there?? It was a reverse mortgage that gave my grandmother the ability to stay in her own home. SS wasn't enough and she didn't have much retirement saved. It was a great option for her. And of course you have to keep up with taxes and insurance. Just have to budget for it like anything else.

@johnhodg8400 5 лет назад

probably lose house in the end.

@rickolsen2960 3 года назад

We eat our own with a smile.

@ednapuckett1042 5 лет назад

My dad has a reversed mortgage. He can’t be away from his home more than 30 days at a time.

@johnhodg8400 5 лет назад

sooo sad.

@BC-rz7zu 4 года назад

If he has a HECM (FHA-insured reverse mortgage) then your statement is incorrect. It has to remain the primary residence and he must live there the majority of the year. There is nothing that should limit him to 30 days at a time.

@dpierce7707 4 года назад

Misleading! Dave throws Reverse Mortgages under the Bus, yet fully endorses and receives compensation from a mortgage company that offers them. Seems a little double minded to me.

@johnbalasa711 4 года назад

This our government that they through us to the wolf .

@diamondunicorn2421 6 лет назад

Again.... This is why I rent. Rent isn't a waste of money. Your payment is for a place to stay. A mortgage, is a debt.

@markg999 6 лет назад

Yeah but atleast a mortgage is locked price rent normally always goes up and you build equity with a home. I cant complain a renter is paying mortgage on my rental.

@markg999 6 лет назад

Lance kaminsky True cost of living always goes up...but usually in my state taxes stay around the same. But in say 40 years avg rental could be $2500 or $3000 a month. As long as you live smart most will be ok either way.

@davester1970 6 лет назад

The problem with renting is that you don't build up your net worth paying rent. You build up your landlord's net worth and equity. The only advantage for never buying a house and paying rent is if you work a job that requires you to constantly relocate. If you are someone that has to move every few years, then buying a house makes no sense. You can easily get out of a lease than you can a mortgage. If you are someone who has established roots and want to start a family, it makes more sense to buy than rent. You want to eventually own where you live. With renting, you will never own your place.

@patrickthomas815 6 лет назад

Good point!

@outdoorsnevada4138 6 лет назад

knowledge is power but you will always have that debt and rent always goes up. I pay more in rent than my parents pay for their home. so a 900 sq ft apartment costs more than a 1700 sq house. Plus rent goes up about $50 a month every year. If you don't trash your place buying can be a big blessing. You don't have rent costs later, you can always sell a home worse case scenario,etc. There is no value after you paid that months rent. You got 30 days a place to live and that is it.

@youngkingdom8131 4 года назад

126 people got SCAMMED!

@irkhanbasc 3 месяца назад

First, subprime mortgages, now, this.

@aware24 6 лет назад

Should I buy a house in Southern California at this time? Or should I wait a year or two to see if prices drop?

@outdoorsnevada4138 6 лет назад

aware24 Buy a house in nevada. Much cheaper. Go to Vegas. plenty of work

@WMtheWM 5 лет назад

The problem is her inability to pay property taxes, not the reverse mortgage.

@G.R.CrowderJr. 20 дней назад

Talk about misleading! My goodness I have never heard more BS in all my life. I'm not sure (yet) about a RM for myself, but I am sure that I will never listen to anything else Dave Ramsey says. NO ONE CAN KEEP THEIR HOUSE IF THEY FALL BEHIND ON INSURANCE OR TAXES! Like so many others have said here, It doesn't matter what kind of mortgage you have if you don't pay these, you will LOSE your house.

@thankswillie 4 года назад

take the reverse,lump some,hold in safe at home,=protection from law suit,hospitals...etc. 75% of appraised value would be nice???

@nicoledenning8090 3 года назад

That's pretty smart actually...

@vwatts8738 3 года назад

Tax free, too

@Goldie-kw5ju 4 года назад

reverse mortgage a ripoff

@ChicagoTRS 6 лет назад

What would you suggest for a senior who is in a paid for home that does not have enough monthly income to make their budget? This is the situation my mother is in...she has an income of around $2000 from SS and a little bit from other sources and has a bare-bones budget of around $2200 so she is falling behind 100-200 monthly...the ~$400 she could get out of a reverse mortgage would put her in a pretty good position. Work is not an option as she is disabled. Selling is not a good option as it would raise her monthly expenses significantly having to pay rent and of course being towards the end of life in a home she lived in the past 50 years...she has no interest in moving. She has a great support system with neighbors and friends in her current home.

@DCARA06 6 лет назад

I'm not 100% sure what Dave would say but seems to me that she might need to sell. She might have enough equity in the house to buy a smaller home or use it to help pay her rent and monthly expenses. Alternatively, is there a grandchild or other family member that is responsible and just starting out with their own life that might want to rent a room from her?

@insanemustaine111 6 лет назад

you would rather have your mom lose her house, and something she could pass down to you, than just give her $200/month?

@ChicagoTRS 6 лет назад

She only would risk losing her house if she failed to pay property taxes or failed to insure the house. She budgets for those expenses - I would prefer her to be self-sufficient.

@insanemustaine111 6 лет назад

But, then she has another mortgage on the house, that will have to be settled by her estate, if anything should happen to her.

@ChicagoTRS 6 лет назад

Of course...we would have to sell the house and pay back the reverse (would be the only mortgage on her house)...which I think is acceptable to everyone involved as no one is relying on the proceeds to her house sale. I just think in her case the reverse is a good option...yes we would lose some value on the fees and interest associated with a reverse mortgage but she is happy not to burden anyone else and she is self-sufficient and can stay in her own home. I do understand reverse mortgages can be dangerous but if you plan right and understand what you are getting into it can be a good option. She does not have any other debt and she can then have a workable budget where she has some excess at the end of the month that she can put in an emergency fund.