The bullshit tap is cranked full on with something in Canada called Reverse Mortgages. With a catchy tune this grinning moron comes on and asks "wouldn't it be nice.." if you could access some the equity in your home tax free!. They play the commercial over and over and over again. Plicks!

They have managed to trick about 12,500 Canadians (the really gullible ones) to go along with their deal and have taken out CHIP reverse mortgages in the last 20 years and to my horror there has been a 16% growth in these suckers in 2006 alone! The present interest rate is a very high 8.5% PLUS closing fees. Stupid stupid stew -pid! AND GET THIS -THEY COMPOUND THE INTEREST TWICE A YEAR!!! AFTER TEN YEARS YOU OWE TWICE WHAT YOU BORROWED!!! My personal opinion and I am never wrong is that the reverse mortgage is legalized thievery and that those responsible ought to be charged and placed in jail to do hard time. Not to put too fine a point on it these are the worst type of crooks we have in our financial system today. This is the most unethical practice in Real Estate today. In a word it is evil and wrong. (that's two words!)

Here it is. You get a loan from them for about 40% of the value of your home. You don't pay it back until you move or sell your home. So you trade your interest free home for an accelerating debt that will be much more expensive than a bank loan. The average reverse mortgage  holder is 72. 

A large part of the problem started with the real estate market which turned $25,000 houses into $250,000 houses and retired people were left  with huge equity in their homes and minimal savings and small pensions. So the market was there (demand) for a product that could remove equity from the home.  Traditional loans are based on ability to pay and age and sometimes the oldsters couldn't qualify. So along came the bottom feeders and offered the reverse mortgage with all its ugly tentacles.  Now I say bottom feeders but lets realize that this is how economics works- if there is a demand - on the supply side somebody will offer the product. I just think its very sleazy lending with very real risk of the older home owner loosing all their equity that they spent a lifetime building and having nothing to give to the next generation in their estates. 

Knock Knock anybody home? What you are doing is ruining your estate and spending money that would normally go to your sons and daughters. And you end up paying about three or four more percent than you would if you just went out and got a bank loan. Hello! This is a rip off!

I once worked as an Auditor. When you really want to figure out what is happening in a business deal you follow the money. Who benefits? The person who doesn't benefit here is the homeowner who will soon get fleeced. It seems that the reverse mortgage activity is not quite covered by most consumer protection legislation in Canada. Imagine that! Oh and the reason you need to be over 60 to get one? Its not because these crooks are trying to help old farts - its because if they opened the scheme to younger borrowers then when payback time comes the loan value would exceed the value of the house!. Its bullshit folks and if you or anybody you know are considering reverse mortgages please consider what I have said and do your due diligence. Do a bit of research. The facts are all there. 

Personally, I think this is outrageous legalized theft from some of our most vulnerable citizens who are also paying for all that constant advertising to get their business. It is one of the most disgusting events in Canadian finance. In a word reverse mortgages are Bullshit! I hope I have made myself clear. I think I have. I admit I tend to fixate on things and sometimes come down rather hard on things I don't like. You may have noticed that. 

Now it occurred to me that should anyone reading this who then does the suggested due diligence will save themselves and their estates tens of thousands of dollars. Want to express your gratitude? Well you can't because I am offering this information to you for free- so there!

I hesitate to do this to you. Many of your  brains will be hurting from the sudden expansion of useful probably new and unexpected  knowledge contained above. Some of you may have had a plan to cash in on that "tax free" equity in your house. Now you are pissed off with the messenger. But there is more. Good news? No. Bad news! Yes its difficult to believe reverse mortgages could be any worse but here is what happens.

When the suckers aka referred to as the (dear) old fart homeowners get the loot they often go out and purchase an annuity. And here is what happens  An annuity is a contract with an insurance company and as with all insurance contracts the insurance company earns good money for selling it to you. That's fair -they need to eat too and are providing a service -there is nothing wrong with insurance or annuities for that matter. But you need to understand the risks and costs and how they work. Find yourself a professional preferably independent insurance broker -they are good and know their stuff. Here the insurance company is essentially betting that you will croak before they pay you back all the money you gave to them. Its a complicated formula but they have the best mathematicians in the business working for them called actuaries. They KNOW the numbers. You don't. In the worst case you will die earlier and they pocket the money.

Now had you paid for your annuity after doing due diligence and determining it was a good fit for your situation -with funds out of savings that you were going to use for your retirement years then everything would be fine. The shit hits the fan when you take money out of your home to buy an annuity and you run the risk of effectively ruining the value of your estate for your sons and daughters, That cost effectively adds to the already horrendous costs associated with your reverse mortgage compounded high interest rates because you have effectively turned an asset that you owned into assets owned by the insurance company and the reverse mortgage company.  Just think of the all flattering things your relatives will say about you at your funeral. Find an honest banker -there are lots of them and explain the situation to them and see what they can offer INSTEAD of a reverse mortgage.

The latest scam in their advertising is an offer to "release" some of the equity in your home "tax free". This is a total lie. First of all you most certainly are not "releasing some of the equity" which is a non financial term with no established meaning. You see your equity is an asset. What you are doing is trading your asset for a debt. So you are actually converting an asset into a liability. And the moment you spend that money you are locked into a downward spiral that will effectively take your home away from you and ruin your estate. And its not tax free either because when you go to repay the loan you need to do it with after tax money so in effect you are paying taxes on all the money you take from your asset when you go to pay it back. Don't listen to me - pay $300 to an Accountant and talk to him or her. 

I will stop now. But there it is. The skinny on Reverse Mortgages and some reasons why they are bullshit. To be fair some people deserve Reserve Mortgages. They believe anything they see in an advertisement and love the idea of tax free and something for nothing even when its all a myth. They would rather go on trips and redo the bathroom rather than leave anything for the next generation. They don't understand they are being fleeced and no amount of telling them about it will work for them. They deserve Reverse Mortgages because their brains are working in reverse !In fact we devote an entire page to these types of people right here.   It explains why a certain type of person falls for this scheme. 

But don't listen to one person's opinion on reverse mortgages -its a very large decision for you  and investing some time and effort in research to understand what you are getting into is a wise idea and part of the idea of doing due diligence. Talk to your Accountant and Bank Manager IF you have a good relationship with them and know they will look after your best interests. Some banks make a tidy commission from Reverse Mortgages so beware of that.   Here are some books on the topic too:

The nice thing about being retired -other that the fact you are older, is that nobody bugs you anymore. So you can pretty much do what you want to. I decided to experiment with websites and the internet as it has been an interest of mine for the last 14 years. To date we have approximately 30 websites. All are interesting and some are more interesting than others. All offer good deals on merchandise and services and most offer free information that will save you money and grief and help increase your enjoyment of life. I hope you enjoy them! 

We have a map on our home page of recent visitors. If you look you will find yourself there. The world is a global village thanks to the magic of the internet. Thanks for visiting, keep your spirits up and have fun!    -Ron your  webmaster.

JewelryShackInc.com -thousands of well priced jewellery items. For once in your life buy before that special occasion so you get the best price and are ready for it. You will be repaid. And you will not be forgiven if you forget. Bracelets, rings, pendants, children's, men's and women's jewellery right to your door no driving around town required no huge gas bills just shiny nice stuff that will make you and your spousal unit very happy And you know what happens when the spousal unit is happy! Happy wife happy life. 

BigCanuck.com Web Hosting -the Host with the Most. We started this company up because we were paying a lot of money for hosting our three dozen websites. This is good for you because we wouldn't use this service unless it worked well. We have spaces for approximately 200 more websites and after that I think we will cap it. We use a very well established supplier with a huge 24 hour data center and we can offer full website hosting for an amazing $5 and up per month -no long term contracts either. I think that the smaller and medium sized website owners would be particularly interested in this service. High volume websites would probably be happier with dedicated servers. We don't host scammer sites -the basic rule is be honest or find another host. 

EarthSolarDesign.com check out our new site on solar power. We intend to help save the planet and found out a way of doing it cheap. Not only will you save money you could very well make money. How cool would that be! We even have plans to build a wind turbine and solar panel for under $200 that could get you off the grid! You need to ask yourself "Why am I waiting?" Reduce your monthly power bill right now!