TLDR: parents have a large unique home that will be very difficult to sell and are thinking of doing a reverse mortgage.
My parents are both mid 70s and live in a nice house outside of El Paso across the state line in New Mexico. It's a private fly in community with its own runway. They built a beautiful spainish style house out there 20 years ago and added a hanger to the back. My dad then planted approximately 5000 vines around the house and sells the grapes to a local vineyard. So basically not only a unique area, but a vineyard as well.
Last night as dinner he casually mentioned he has started the process for a reverse mortgage. The house is appraised correctly IMO He owes just under $200k. The bank will give him some money. He wouldn't go much more into the initial terms of the reverse mortgage.
His reasoning is he believes the house will be very difficult to sell when they die and he doesn't want to burden the kids with trying to sell it. I asked how long he thinks it would take to sell and he told me when he asked the local HOA they told him the avg house in the fly in community takes 39 months to sell - over 3 years on average.
My folks plan on staying in this house until they die - for now. I live 20 mins away but I work out of town and would nothing more than for them to follow me when I move so I don't have to commute for work. My dad will not entertain that thought at all. He wants to stay here until he dies.
He feels that a reverse mortgage will free up cash by allowing him to stop paying his mortgage and to unburden the family when we eventually try and sell it. I have only heard negative outcomes with a reverse mortgage. I don't see how this is a good idea at all long term.
So what are your thoughts? Any and all ideas appreciated.
My parents are both mid 70s and live in a nice house outside of El Paso across the state line in New Mexico. It's a private fly in community with its own runway. They built a beautiful spainish style house out there 20 years ago and added a hanger to the back. My dad then planted approximately 5000 vines around the house and sells the grapes to a local vineyard. So basically not only a unique area, but a vineyard as well.
Last night as dinner he casually mentioned he has started the process for a reverse mortgage. The house is appraised correctly IMO He owes just under $200k. The bank will give him some money. He wouldn't go much more into the initial terms of the reverse mortgage.
His reasoning is he believes the house will be very difficult to sell when they die and he doesn't want to burden the kids with trying to sell it. I asked how long he thinks it would take to sell and he told me when he asked the local HOA they told him the avg house in the fly in community takes 39 months to sell - over 3 years on average.
My folks plan on staying in this house until they die - for now. I live 20 mins away but I work out of town and would nothing more than for them to follow me when I move so I don't have to commute for work. My dad will not entertain that thought at all. He wants to stay here until he dies.
He feels that a reverse mortgage will free up cash by allowing him to stop paying his mortgage and to unburden the family when we eventually try and sell it. I have only heard negative outcomes with a reverse mortgage. I don't see how this is a good idea at all long term.
So what are your thoughts? Any and all ideas appreciated.