This is a very detailed information about reverse mortgage that can help senior citizens undersand how this works and can help them come up with a confident decision. Those who are still asking what is a reverse mortgage will surely learn more about this after reading this post and with the help of these resources: revmortgage/education/what-is-a-reverse-mortgage/ and http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten.
It is a beneficial financial tool but borrowers should keep in mind their responsibilities and the risks involved. Don't believe the advertisements you see and hear these days because they are misleading. Borrowers are at risk of losing their homes if they don't keep up with their property taxes, home insurance and other fees. They will also lose their homes if their reverse mortgage accounts are not settled when the borrower passes away, changes residence or sells the house. In my opinion, these are two of the most important things that can help borrowers understand reverse mortgage and thus can make this work to their advantage.
Please read over everything when it comes to a reversed mortgage.... and remember it is a *mortgage* that needs to be paid back along with the interest and various fees.
If your parents get a reverse mortgage, make sure both names are on the loan, otherwise if the loan was processed prior to August of 2014 there is a problem, if the person who is named on the loan passes away, the spouse has only a small time frame to refinance the house or to sell the house.
My boss was in for a huge surprise when the reverse mortgage company told him he only had 30 days to refinance the house or to sell it since his late wife was the only name on the loan. He wasn't able to refinance the house, so he had to sell. Talk about scrambling to find a place to rent and moving out 40 years of stuff. Most of his household goods that they had were auctioned off because there was no room in the rental. Here he thought he had a year to live in the home to give him time to decide what to do. He is so exhausted plus still grieving as his wife died only a couple months ago.
If a child inherits the house the grown child could stay in the home but he/she eventually will need to refinance the house to pay back the reverse loan... or will be required to sell the house at fair market value. The total loan value will go back to the mortgage company, along with the interest and fees.
Today's reverse mortgage are more difficult to obtain then they were years ago. One now has to qualify like they would if they were getting a regular loan to buy a house. In the past background credit wasn't checked and that created problems for both the lender and the home owner.
Reverse mortgage is a great payment option but you need to understand that it comes with risks. Like any financial transaction there can be risks that can happen. Just make sure that you can manage your financial resources wisely before foreclosure can happen if you failed to pay for insurance and your property taxes in time.
This is very beneficial nowadays especially to people who have failed to plan for long term care. You can use the pay out to cover expensive long term care cost.
My parents have recently taken out a reverse mortgage - At first I thought it was a horrible idea since we have had the home in our family now for many generations but after speaking to my lender they explained that my parents home be mine as long as I can pay off anything that the borrow. I am calculating that the home appreciation alone should cover over the interest costs so it is essentially a free loan for them - I'm glad that they now have more money for their retirement.
IF MY MOM'S HUSBAND GOES AND DOES A REVERSE MORTAGE , AND MY MOMS NAME IS NOT ON THE MORTAGE, WHEN HE DIES, DOES SHE HAVE TO MOVE OUT? SHE THINKS SHE CAN LIVE THERE TILL SHE DIES. (THE HOUSE WAS BUILT ON LAND MY GRANFATHER GAVE MOM TO TAKE CARE OF HIM NEXT DOOR WHILE HE WAS BATTLING THROAT CANCER AND LATER DYING.) BUT HE, HER HUSBAND,TOLD HER NOT TO LET ME AND MY SISTER KNOW ABOUT THE R.MORT. HE ALWAYS MADE THE HOUSE PAYMENTS AND MOM MAKES ALL THE UTILITITY,STILL. SO IT LOOKS LIKE NOW HE IS FREE AND CLEAR OF FINACIAL RESPONIBILITY BY DOING THE MORTAGE SITUATION. HOW CAN I CHECK THIS OUT WITH OUT HIM KNOWING I WAS TOLD BY MY MOTHER? I THINK HE HAD DONE REFINACING FOR EXTRA CASH AND THIS HELPED HIM TO RESOLVE HAVING TO PAY HIGH PAYMENTS AFTER REFINACING. MY MOM IS STARTING DEMINCIA AND GET THINGS ALL MIXED UP , FORGETS , AND LIKES TO THINK ALL IS WELL AND CAUSE NO RIPPLES. PLEASE HELP ME TO KNOW WHAT TO DO?
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How Seniors Can Tap Home Equity for Retirement Income
It is a beneficial financial tool but borrowers should keep in mind their responsibilities and the risks involved. Don't believe the advertisements you see and hear these days because they are misleading. Borrowers are at risk of losing their homes if they don't keep up with their property taxes, home insurance and other fees. They will also lose their homes if their reverse mortgage accounts are not settled when the borrower passes away, changes residence or sells the house. In my opinion, these are two of the most important things that can help borrowers understand reverse mortgage and thus can make this work to their advantage.
If your parents get a reverse mortgage, make sure both names are on the loan, otherwise if the loan was processed prior to August of 2014 there is a problem, if the person who is named on the loan passes away, the spouse has only a small time frame to refinance the house or to sell the house.
My boss was in for a huge surprise when the reverse mortgage company told him he only had 30 days to refinance the house or to sell it since his late wife was the only name on the loan. He wasn't able to refinance the house, so he had to sell. Talk about scrambling to find a place to rent and moving out 40 years of stuff. Most of his household goods that they had were auctioned off because there was no room in the rental. Here he thought he had a year to live in the home to give him time to decide what to do. He is so exhausted plus still grieving as his wife died only a couple months ago.
If a child inherits the house the grown child could stay in the home but he/she eventually will need to refinance the house to pay back the reverse loan... or will be required to sell the house at fair market value. The total loan value will go back to the mortgage company, along with the interest and fees.
Today's reverse mortgage are more difficult to obtain then they were years ago. One now has to qualify like they would if they were getting a regular loan to buy a house. In the past background credit wasn't checked and that created problems for both the lender and the home owner.
This is very beneficial nowadays especially to people who have failed to plan for long term care. You can use the pay out to cover expensive long term care cost.
BUT HE, HER HUSBAND,TOLD HER NOT TO LET ME AND MY SISTER KNOW ABOUT THE R.MORT. HE ALWAYS MADE THE HOUSE PAYMENTS AND MOM MAKES ALL THE UTILITITY,STILL. SO IT LOOKS LIKE NOW HE IS FREE AND CLEAR OF FINACIAL RESPONIBILITY BY DOING THE MORTAGE SITUATION. HOW CAN I CHECK THIS OUT WITH OUT HIM KNOWING I WAS TOLD BY MY MOTHER? I THINK HE HAD DONE REFINACING FOR EXTRA CASH AND THIS HELPED HIM TO RESOLVE HAVING TO PAY HIGH PAYMENTS AFTER REFINACING.
MY MOM IS STARTING DEMINCIA AND GET THINGS ALL MIXED UP , FORGETS , AND LIKES TO THINK ALL IS WELL AND CAUSE NO RIPPLES. PLEASE HELP ME TO KNOW WHAT TO DO?