Comments by "TeeKay" (@teekay_1) on "Reverse mortgage company starts foreclosure after Florida homeowner ignores mail" video.
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@jimcarrington6744 Reverse mortgages are a symptom of misplaced priorities:
1) People make a big deal of paying off their mortgage before they retire. In theory a noble goal
2) But that money you used to pay down the mortgage is now in the house, and you can't really get that money out of the house without selling it
3) Unexpected circumstances come by, broken car, medical bills, junior lost his job, and they have no cash
4) So they turn to the only source of income, their house, and take out a reverse mortgage.
The point is that a paid-off house is great, but if you pay it off by using money that you'd be better off saving for retirement, then it may not be a great idea, and houses are an asset that can't easily be leveraged to generate cash.
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@sammi-joreviews1135 All of your assumptions are wrong including about my age
If you have a 2.5% loan, you're essentially getting free money, particularly with inflation running at 10% plus. If you pay off early, the bank should send you a thank you note from the CEO and a free vacation. You're FAR better off putting that extra payment into a bank account.
The trouble with a house is that it is a completely non-liquid, non-performing asset. Worse, once you retire, the only way to get money out of your house is to take out a HELOC or similar. But you're retired, so the bank won't give you one because.... you're retired.
If you had kept your money liquid, you'd have the situation in hand. You should never pay off a mortgage early UNLESS you have a bad interest rate or you have 9 months of salary saved.
So going with your advice, you find yourself with a $50,000 medical bill and $2K in the bank. What would you do?
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