Don't understand reverse mortgages
I have read various articles about reverse mortgages and I still donÂt understand the concept.
My Dad is 70 and struggling to make ends meet. IÂve subsidized him to the tune of $1850 in 9 months Â not a lot to some, but itÂs a lot to me. I know IÂll be laid off soon; IÂve been given 4 previous layoff dates, but miraculously the date has been extended each time; I donÂt expect this good fortune to continue indefinitely. IÂve been squirreling away money to prepare for layoff, and I have a goal to save a minimum 9 months living expenses before this job ends.
ThatÂs all to say that my money is allocated for my well-being.
I donÂt have issues about saying ÂNOÂ to my father, well maybe some; heÂs so pitiful and has always been totally clueless about valuing the power of accumulated money. For the record, I find the idea of NOT helping himÂwellÂabhorrent. (chalk that up to cultural influences) I hadnÂt fallen far from his tree, financially speaking; I thank divine intervention for waking me up to new ways 4 years ago. IÂve given Dad money 3 times. The second time I gave him money I told him he had to write down his living expenses, so we could see where his money was going. This third time (Monday) he asked for money, I asked had he finished his list of living expenses? ÂI tried to budgetÂ, he said, Âbut the house and car insurance snuck up on meÂ. I told him I didnÂt ask him to budget, I asked for a list of his living expenses. So now IÂm going to give him a list to fill out and we will determine what his monthly outgo is and what is monthly income is. I will tell him that I will not give him any more money until he does this work. (The ÂpowerÂ of those two numbers amaze me: monthly living expense vs. monthly income)
Once I get this information, I can determine how to proceed. ThatÂs why IÂm asking for some plain talk explanations about reverse mortgages, because I know thatÂs an option for elderly home owners. I just want a better understanding of reverse mortgages. I do a modicum of financial reading, but I canÂt quite grasp this concept.
Please explain it to me like IÂm a six year old. I know IÂm an intelligent woman, but I hit roadblocks on this reverse mortgage concept. I liken this to my struggle with physics in college. If you fail a course 3 times, you are booted out. I had failed Physics twice with the same professor. The third time, I was given a different professor and, voila!, he was able to teach me. I actually began understanding the concepts. I could visualize the problem, and therefore, envision the solutions. Still didnÂt get an A, but got a B. DoesnÂt mean the first professor was bad, he just couldnÂt simplify his explanations enough for the non-physics-gifted.
So, please, you financially knowledgeable people, IÂd appreciate your best attempt at reaching the non-financially-gifted student. Thanks.