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  1. #5861
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    Quote Originally Posted by couta1 View Post
    I see a reverse mortgage as a good choice for those elderly that need the extra cash and at least they get to enjoy their hard earned cash themselves rather than leaving it to those that either don't deserve it and or the ungrateful. PS- Winner I don't really care what language they present the results in as long as its a forward thinking, adaptable and growth kinda language
    It may be for some, but I think you're missing the point couta.

    For the luxury of retaining their home which invariably is typically a good deal larger and more expensive than they need (family gone, husband/wife in firmed or deceased), and for as long as their equity provides for the reverse mortgage, they trade off their financial independence. Then comes the inevitable move out from the family home, which they had by definition tried to avoid with the reverse mortgage, with no equity which has gone to the bank, and the remainder of their life dependent on the government rest home subsidy. This can be many many years for some. Better might have been to just sell the house, invest the returns, and live in a more modest home until such time as they are committed to the aged care system.

    This is not just a criticism of Heartland per se, it just irks that they target the oldies with advertising on the tired and worn out TV channels that they know the oldies are watching. That said, the banker who is a pillar of society is an also worn out concept.

  2. #5862
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    Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic.

  3. #5863
    percy
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    Questions for you Baa Baa.
    Great uncle Baa Baa is 75 years young.
    He has a mortgage free property in Auckland with a market value of $1.1 mil.
    The only income he has is super.
    He would like to visit friends one last time in UK.
    He loves where he lives.Near his doctor,his bank and supermarket.Loves his house and does not want to leave it.Prefers to live alone.
    Borrowing approx $80,000 he can do up the bathroom,have his trip and some other things.
    No bank will lend him $80,000 as he does not manage on his super.
    So $80,000 at REL interest rate of say 8% is $6400 pa.
    Now how much pa do you think his property is increasing in value pa.10% would be $110,000.pa
    So staying in his house,not paying huge fees to trade down he is miles better off.
    He lives to 90. Please compound how much better off he/estate will be by him staying put.!
    As we can see old great uncle was where the Baa Baa family brains came from.
    No reason why he can't keep on borrowing $1,000 a week or more.Maybe $2,000 a week?
    Last edited by percy; 02-08-2015 at 08:45 PM.

  4. #5864
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    Quote Originally Posted by couta1 View Post
    Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic.
    And with that you make my point, that why bother with a reverse mortgage giving ones equity and financial independence back to the bank, when one can as easily sell the home and invest the capital and maintain financial independence for as long as they live. Whether or not it is in a rest home. This is what galls me about Heartland's press on reverse mortgage loans, leveraging the TV channel and preying on the elderly much like a common utility company.

    This may be lost on people who don't have EPA over an elder who has substantial equity in their home but offset by very limited income. Heartland offer a solution, but I don't think it is the best solution. And I dislike their advertising targeting the vulnerable elderly who cannot see past the days when their financial independence will have been sacrificed to the bank.

    Banks don't offer these solutions for the betterment of their elderly customers, they do it because it is a profitable line of business. Question is then whether to sacrifice the financial independence of an elders estate or equity to the bank's underlying profit, or to do the best thing for the elder.

  5. #5865
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    Quote Originally Posted by Baa_Baa View Post
    Clever Ad, targets the vulnerable oldies for the reverse mortgage loans. Is it really better than just selling their house, if they have to, and putting the excess dosh else where? Possibly a good thing for some, but heartbreaking for many to lose control of their home to a bank and know one day, if they are unfortunate to live long enough, they'll have no equity and have been right royally up the rear, especially if the live to really old age. At least there's the government subsidy for their rest home care if needed. You have to realise that when these oldies signed up for their first mortgage, not only was it near impossible to get a loan, and at outrageous interest, when they did it was at the behest of the banker who was a pillar of society, someone to be trusted, beyond reproach. Sad to have to give back what they wanted so desperately and paid for so heavily to a bank who made it all possible.
    Personally, I think that if I had to make the choice between a reverse mortgage or moving into a retirement village, I would choose the reverse mortgage. The retirement village guarantees a capital loss. Historically the family home has grown in value which should In part offset the cost of the HNZ reverse mortgage which has conservative maximum lending rates depending on the age of the borrower at the time of taking the reverse mortgage.
    SCOTTY

  6. #5866
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    Quote Originally Posted by percy View Post
    Questions for you Baa Baa.
    Great uncle Baa Baa is 75 years young.
    He has a mortgage free property in Auckland with a market value of $1.1 mil.
    The only income he has is super.
    He would like to visit friends one last time in UK.
    He loves where he lives.Near his doctor,his bank and supermarket.Loves his house and does not want to leave it.Prefers to live alone.
    Borrowing approx $80,000 he can do up the bathroom,have his trip and some other things.
    No bank will lend him $80,000 as he does not manage on his super.
    So $80,000 at REL interest rate of say 8% is $6400 pa.
    Now how much pa do you think his property is increasing in value pa.10% would be $110,00.pa
    So staying in his house,not paying huge fees to trade down he is miles better off.
    He lives to 90. Please compound how much better off he/estate will be by him staying put.!
    As we can see old great uncle was where the Baa Baa family brains came from.
    Let's not get personal percy, the BaaBaa's are wooly creatures not known for their brains. Lucky great uncle BaaBaa has property in Auckland. He could be anywhere else and not be enjoying outrageous capital gains. Look, if it's best for him to stay at home and take a reverse equity mortgage with Heartland, then do it. But if it's not his decision anymore, whose is it and what is their motive to pandering to his desire to stay at home while pilfering away his equity on a reverse equity mortgage?

  7. #5867
    Guru Xerof's Avatar
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    Quote Originally Posted by couta1 View Post
    Baa Baa inequality is rife even in the retirement village setting you refer to, over the many years I've been involved with the sector I've witnessed many very wealthy people receive the residential subsidy from the time they enter a village while their next door neighbour who doesn't qualify for the subsidy have their wealth eaten away after 10 years, ending up the same as those that entered the facility with no money and obtained a subsidy from day one as did the very wealthy group with iron tight trusts, how ironic.
    speaking of iron clad trusts, rorts and inequality, are those wealthy people with no income in their own name still putting their kids through Uni on the Student Allowance (not loans) and accomo supplement, or has that been sorted out? I know of a couple of farming families who have done that - no respect from me, but then I suppose the Trusts won't make anything this year, so fair enough?

  8. #5868
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    Of course the difference being Baa Baa is that those that choose a reverse equity mortgage to enjoy their money and spend it on what they so desire and then enter a care facility and obtain a residential care subsidy because they are below the asset threshold have truely enjoyed their money rather than just paying for a room which they now are able to live in for less than their pension(Which includes 24hr nursing care) and all thanks to their reverse equity mortgage, ain't that neat.
    Last edited by couta1; 02-08-2015 at 09:04 PM.

  9. #5869
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    Quote Originally Posted by couta1 View Post
    Of course the difference being Baa Baa is that those that choose a reverse equity mortgage to enjoy their money and spend it on what they so desire and then enter a care facility and obtain a residential care subsidy because they are below the asset threshold have truely enjoyed their money rather than just paying for a room which they now are able to live in for less than their pension(Which includes 24hr nursing care) and all thanks to their reverse equity mortgage, ain't that neat.
    I think under the current subsidy scheme reverse mortgages could make sense for elderly couples to finance home improvements etc. If one partner needs care, the home is excluded from the means test for the care subsidy. So keep that old big property, get a reverse mortgage to remodel and renovate it.

    In so many areas, in my opinion, the poor and the wealthy, with top advice and ironclad trusts & other schemes, get the state's help. The moderately wealthy miss out.

  10. #5870
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    BUGGER, a really bad day today

    Looks like the 50MA has crossed below the 200MA - a DEATH CROSS

    But I seez nothin, nothin. It's all OK
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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