Would any of you have any experience with this?
If so, I would appreciate any input or advice.
My Dad is getting up there and running out of cash.
I'm thinking his quality of life could be a little better if he did this.

any input or thoughts is appreciated.

Edit:
I just found this on the web.
http://www.consumerlaw.org/initiatives/seniors_initiative/tips.shtml

a reverse mortage is almost always a bad idea. there is a time and place for them. if you are being sued, and have no heirs, it's a good idea. i don't know if you have siblings, or what your father needs $ for. but try to work it out with your siblings. if pop needs a few more $ a month, maybe you can pitch in. my siblings and i pitch $100 each in for my mom. her s.s. plus pension, and $300 a month gives her plenty to live on.

when you buy a home (example 100,000k), the bank adds interest to the point that you end up paying several hundred thousand for it. a reverse mortage, will give you a fixed amount.

my tax guy advises, you have dad quick claim the property to you, then go get a small mortage that you all can afford, and give your dad either a monthly addition to his current $, or a lump sum (not advised, because you can invest or flip c.d.'s for extra income).

this way if anything ever happens to dad, the property is in your name and you'll do better down the road when the market is better, plus get the tax incentive for extra home-non rental.....you get no tax benefit from a reverse mortage, and could add enough income to your father to jump him a tax level....

plus, by the way, the bank expects you to pay all the costs on a reverse mortage, such as apprailsels and inspections and loan costs. remember, a bank is only in business for one thing, to make $.....

Bill's right; last resort only. Might be better off selling and downsizing, just that the market is in the tank now. Might sound crazy but maybe a roommate.

I was going to suggest selling the house and having him move to an apartment or one of those old folks apartment complexes where they serve meals and stuff (not really an assisted living, but more than just an apartment). My grandma sold their house after grandpa died and did just that, and she felt much better off not having to take care of a house.

But, Bill's idea sounds better.

Also, I found out that the reverse mortgage is really a loan that the heirs have to pay. If they don't, there is interest they pay until they do.

thanks for the input.

I think we will look at doing something else.

I looked into them for my Dad and found:

1. The house is subject to inspection and any defects have to be fixed before the loan.
2. Loan to value will only be about 50%, maybe 60 if you are lucky. If the house is not paid off then you will get percentage of the equity.
3. You get to pay all closing costs normally associated with a home loan, these are added to the mortgage. In a normal transaction they would be split with the seller.
4. It appeared that getting the final closing taken care of could be a long and problematic deal, especially in todays market where home values may be dropping. They also would not give me a good idea of what would be included in the getting the final settle statement (reappraisal, additional closing costs to sell the home, etc.) or what would happen if the home could not sell.

We finally decided it would just be better to sell the house outright and park the cash.

Don't they are just a bad Idea

My mother recently looked into this. After getting all the info it was little better than a legal scam. Even the local senior center advised against it.

Yeah, my friends mother took one after his father died. She just died a little bit ago and he and his sister are clearing it out before the bank comes and changes the locks. He said she regretted doing it shortly after she signed the papers.

Neither he nor his sister wanted to keep the house, but it would still have been worth more to both of them if she had sold it and split the money between them.

We took mom to the bank for a mortgage a couple weeks ago. Mom is 72 and just today we got my mom approved for a 25% equity mortgage at 5.25%. She owns the place outright and they are only going 25%, but that is plenty and WAY better the the reverse mortgage give away. his is just a straight up mortgage with no stupid cost or fees or tricks to make you give the house away. My brother and I offered to cover the few hundred a month she is short, but she simply does not want that and wants to protect he IRAs which can be passed to us tax free.

It is kind if sad when I realize she spends a lot of time trying to pad our small inheritance! I really wish she would spend every pennie and go out with a bang.

A search pulled this up.

A reverse mortgage should be considered only as a last resort. (http://www.pfadvice.com/2007/12/04/reverse-mortgages-only-consider-as-a-last-resort/)