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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.

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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.

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Learn more about reverse mortgages: https://www.daveramsey.com/blog/how-reverse-mortgages-work

Want to hear more of what Dave has to say? Listen to a caller ask Dave about reverse mortgages: https://www.youtube.com/watch?v=r65XTx2lxFM

Read the Washington Post article here: https://www.washingtonpost.com/business/economy/more-seniors-are-taking-loans-against-their-homes–and-its-costing-them/2017/08/25/5f154072-883a-11e7-961d-2f373b3977ee_story.html?utm_term=.6aff35ae2697


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The Dave Ramsey Show : Reverse Mortgages Are SCAMS!


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  1. Owing and paying property taxes doesn’t identify a scam. I like Dave but this segment makes no sense. These loans are given to people with low cash flows. Therefore the 14% failure rate may not be so high.

    I think Dave is saying that many reverse mortgages are going to the wrong audience. He might also be complying RM rates are too high relative to traditional mortgages.

    Reverse mortgages can be a good idea for a specific and narrow group of people.

  2. 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.

  3. 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

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. Reverse mortgages are great for investing. You can finance the purchase of your third or fourth property, by reverse mortgaging the second. And because the interest rate on a reverse mortgage is low, it's quite probable that the rental income can cover it. In a worst case scenario, simply sell off one of your houses. What's the big deal?

  9. Another thing I noticed. A house is average 30 years to pay off. Why are senior's still paying mortgages at an age where your income wasn't the same 30 years ago? At what age did they buy their houses? Oh my age 45. I rest my case. Don't buy a house on a mortgage after the age of 30. Just my opinion

  10. 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?

  11. It is not a scam, they tell you the deal up front. Reverse mortgages do not cause people to lose their homes. Years and years of bad planning and an evil world where they get riped off all of their lives causes people to lose their homes. Most of the people who lose their homes were going to lose their homes a lot sooner without the help of a reverse mortgage. What a reverse mortgage does is delay the process of losing your home by 1,2,5,10,20 or 50 years. It does not cause people to lose their homes lolol these were people destined to lose their homes anyway whether they took out a reverse mortgage or not. So if you are going to lose your home ANYWAY it hardly ever hurts to delay that process. If somebody tells you the deal up front and delay your losing your home then I disagree that it is a scam. If a reverse mortgage delays me losing my home by 10 years and I end up dying in 9 years, then I die right before I lose my home thanks to a reverse mortgage. How did that hurt me? It helped my avoid being homeless for the last 9 years of my life, what a "scam."


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