Does anyone here have a reverse mortgage? As I have said in the past, iv been working on a horse farm for the last 24 years. I love the place. I lived 3 miles from the farm, than in 2000 I was fournate enough to buy a house 1/4 mile from were I grew up. Anyway the lady that owns the farm has run it into the ground, she has 4 kids in there 40s that are all losers, they never worked for anything, because mommy kept supporting them, one son went to a 2 year collage for 10 years, because he kept changing his major, then quit without a degree! Yet we couldn't get a battery for a tractor when it died?? She spent over $30000 on 3 horses, that she knew nothing about, some trainer in KY saw her coming a mile away, and swindled her. Any way in 2008 she put the place in a reverse mortgage. I'm not sure how it works, but I think she gets money from what ever equity is left in the place, they used the farm as an ATM during the 2000s? I don't know if she can sell the place or even lease it. I don't think if I sold my house and property I could swing the farm, in the 90s they said the place was worth a million, but that bubble burst so I'm thinking 4-5 hunderd thousand now, what I wondering is if she lives long enought, and use a good chunck of that equity, would the place be sold for what it was worth minus the used equity? Say the bank priced it at $400,000, and she uses $300,000 in payments, would it sell for $100,000? Any advice would be appreciated. Other than that how does one get a farm nowadays? Other than inherent one, or being a millionaire !!! Thanks.
- Thread starter JayinNY
- Start date
3020jd2955
Member
I don't know anything about reverse mortgages, but if the owner owes the bank $300k then the bank isn't going to sell it for $100k....they are going to try to sell it for $300k...unless they can't find any takers, then the prie might drop.
Achin' Back
New User
The fact that she has a reverse mortgage has almost nothing to do with what the farm will be worth or sell for when she dies. Whoever loaned her the money on the reverse mortgage wants to get their money back. They will hopefully get it from the sale of the farm. It will, in all likelihood, be listed at or near whatever is market price for a similar farm in that area.
retired farmer
Well-known Member
Back in the ninetys I had to find a cheap one and put fifty thousand down. Lucky for me I had machinery that was all paid for before I bought the place. Couldn't do it again.
If it is worth 500,000 and she gets 50,000 a year in 10 years her money would run out and the bank owns it.
If she dies after 5 years and the value is still 500,000 her estate would get 250,000.
The bank would then own it and ask market value for it. Which may be 500,000 or if land has gone up they may ask 600,000 for it.
The bank is going to try to get market value for it no matter what.
Gary
If she dies after 5 years and the value is still 500,000 her estate would get 250,000.
The bank would then own it and ask market value for it. Which may be 500,000 or if land has gone up they may ask 600,000 for it.
The bank is going to try to get market value for it no matter what.
Gary
old
Well-known Member
- Location
- Camdenton Missouri
The way I understand it is they pay till the person dies then who ever did it gets it lock stock and barrel. Just another way of making sure no one gets an inheritance
GeneMO
Well-known Member
- Location
- Pilot Grove, Mo.
You either need to inherit it, or have too much money that you dont know what to do with it.
Or alreay well established in farming and have equity in the operation to allow you to buy more.
My son and I sold 120 acres in October to the NASCAR driver Carl Edwards.
Gene
Or alreay well established in farming and have equity in the operation to allow you to buy more.
My son and I sold 120 acres in October to the NASCAR driver Carl Edwards.
Gene
MarkB_MI
Well-known Member
- Location
- Motown USA
The property will be sold for whatever the market will bear. The amount of the reverse mortgage is irrelevant.
If you owe 10K on your mortgage, and your house is worth 100K, would you sell it for 10K or 100K? (Admittedly, there are lot of people who opt for the former, but I hope you're not one.)
If you owe 100K on your mortgage and your house is worth 10K, would you insist on selling it for 100K? Of course not, because you'll get no buyers. You might walk, you might try to get the bank to agree to a short sale, or you might hold on to it.
Mortgage companies think no differently than you, and the mortgage company must sell in the same market in which you will buy.
If you owe 10K on your mortgage, and your house is worth 100K, would you sell it for 10K or 100K? (Admittedly, there are lot of people who opt for the former, but I hope you're not one.)
If you owe 100K on your mortgage and your house is worth 10K, would you insist on selling it for 100K? Of course not, because you'll get no buyers. You might walk, you might try to get the bank to agree to a short sale, or you might hold on to it.
Mortgage companies think no differently than you, and the mortgage company must sell in the same market in which you will buy.
A everse morgage is basically selling your property, but you get to live in it until it's totally sold.
She sold her horse farm to the bank - it's likey really an investment business, more like a loan shark than a bank. Anyhow, she sold the property, and is collecting the payments slowly while still living there.
You would need to buy the property from the bank/ investmet place, the lady don't have anything to do with it any more. She's basically a squatter at this point, no say on the property.
They will not make you any deals, they bought the property with the idea of turning it around and making bucks off of it whenever they get it paid off.
There are a few cases where a reverse morgage can make some sense, but mostly not, sounds like, as you say, they just used the proprty for cash and will need to walk away some day with no planning.
--->Paul
She sold her horse farm to the bank - it's likey really an investment business, more like a loan shark than a bank. Anyhow, she sold the property, and is collecting the payments slowly while still living there.
You would need to buy the property from the bank/ investmet place, the lady don't have anything to do with it any more. She's basically a squatter at this point, no say on the property.
They will not make you any deals, they bought the property with the idea of turning it around and making bucks off of it whenever they get it paid off.
There are a few cases where a reverse morgage can make some sense, but mostly not, sounds like, as you say, they just used the proprty for cash and will need to walk away some day with no planning.
--->Paul
steve terplak
Member
What farm/where? Acreage? Buildings?
Just curious
Just curious
MarkB_MI
Well-known Member
- Location
- Motown USA
Jay, you missed my point. I was trying to help you understand the point of view of the mortgage company. Why on earth would you expect this property to sell for more or less than the market value?
Jay- the way you described this situation I would tender my guess as...the property owner has gotten the reverse mortgage because she does not intend to leave any heirs to her property. It seems she has only this property to maintain her until she passes.
The lender will ask fair market value for the property regardless of the balance.
So, it is between you and the lender to come to an equitable agreement.
HTH
The lender will ask fair market value for the property regardless of the balance.
So, it is between you and the lender to come to an equitable agreement.
HTH
Wife's uncle sold his lake home on a reverse mortgage because her aunt has had a lot of medical expenses. He has to maintain the property at a certain level or they can take the property at any time. When he first did it he thought it was a good idea but is now regretting it.
In your case you would need to find out who she sold it to then find out about buying the mortgage. Be assured that they will want to make a profit on it and anything they owe her will now be yours to pay to her if they are willing to sell now. Most likely they will wait until they take position of the property before they will want to sell......at a profit.
Rick
In your case you would need to find out who she sold it to then find out about buying the mortgage. Be assured that they will want to make a profit on it and anything they owe her will now be yours to pay to her if they are willing to sell now. Most likely they will wait until they take position of the property before they will want to sell......at a profit.
Rick
Thanks mark, I misunderstood your post. I thought you thought I was losing my property. I Also really don't understand how a reverse mortgage works, now I understand that the holder won't be "giving" the farm away. Oh well, I'm gonna keep working hard, with some luck, maybe I can get the place! But I can tell you one thing, iv never been in debt, and I'm not gonna go into debt to get the place, I protect my assets.
I agree, I'd have to pay the place off in full to tear the house
down! I work for a guy who had 2 houses on his property, he
tried for about 2 months to sell the one house for$850,000,
and it wasn't a crappy house, hard wood floors, marble, ect,
he got sick of the property tax, and the towns,so he paid $150,000 to have it
ripped down. He paid me GOOD to spread mulch hay over
the site, so the town would take it off there tax base! I said
good for him, Freg the town! Lol
down! I work for a guy who had 2 houses on his property, he
tried for about 2 months to sell the one house for$850,000,
and it wasn't a crappy house, hard wood floors, marble, ect,
he got sick of the property tax, and the towns,so he paid $150,000 to have it
ripped down. He paid me GOOD to spread mulch hay over
the site, so the town would take it off there tax base! I said
good for him, Freg the town! Lol
Brad Buchanan
Member
Hey Gary.
I did some research on the subject for a family member and as far as I found out the owner retains title until they pass away.
As long as they live there.
But I have been known to be wrong.....
Brad
I did some research on the subject for a family member and as far as I found out the owner retains title until they pass away.
As long as they live there.
But I have been known to be wrong.....
Brad
Paul has it almost right.
The Bank owns the farm. They have bought and she holds the mortgage when the mortgage pays off she has to move out. One my co-workers had a friend who took a reverse mortgage then out lived the payments. The bank insisted he move so the co-worker bought the property from the bank to allow the man to have a place to live--very big of him.
After the individual died the co-worker fixed the place up and sold it. It wasn't pretty.
The Bank owns the farm. They have bought and she holds the mortgage when the mortgage pays off she has to move out. One my co-workers had a friend who took a reverse mortgage then out lived the payments. The bank insisted he move so the co-worker bought the property from the bank to allow the man to have a place to live--very big of him.
After the individual died the co-worker fixed the place up and sold it. It wasn't pretty.
That sounds like my neighbor across the street from me. When her husband died she got a reverse mortgage. Her husband always handled the money and she has wasted all the money. She had all new windows ordered for the whole house and had to pay 1/3 down. When the windows were delivered she claimed the windows were killing her. She claimed the same thing on new tv and returned it. She came over to our house and never claimed about our new windows or any of the tv sets. I told her it was in her head. She didn't get the deposit back on the windows. She's a retired nurse and should be in an assisted living home. She doesn't like her son's wife and he's never around. He lives in MO. Hal
Billy Shafer
Well-known Member
Friend on mine that deals in such things. Told me stay as far away from a reverse mortgage. Just another legal scam. They can tell you how to live and what you can do with the property. Want to plant a tree or have a garden. You have to get permission first.You become a caretaker and they can boot you out at anytime. Just break one of the rules.
Blackhole49
Well-known Member
- Location
- White Lake MI
One thing, explain how "iv never been in dept" and "this has nothing to do with my mortgage, mines almost paid for" equate.
massey 333
Member
I could be wrong,but every penny that is paid out has INTEREST building on it same as a line of credit and making draws on it.Nothing is free,it is a money making business.
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