With proper DPOA allowing for any & all financials, house can be sold. But whether or not to do this - both for time & $ involved - to me very much depends on just what RM end amt is and property value.
RMs aren’t really designed to be repaid by owner, their more abt having property be acquired by RM or a subsidiary company to sell it. I’d suggest you clearly find out how much overall $ RM truly is as a first step. There’s 2 types: full amount loaned and a line of credit loan. Loans are usually 45-55% of property value. Both types can actually be on a draw but LOC type is lower interest and only includes actual draw done for tally of $ repayment. HOWEVER Both types will have all sorts of fees, interest, whatever’s atop $ loaned; AND can be quite a lot of $.
Some have insurance bundled into loan. Scenario is elder owns home outright for decades and has old low premium homeowners policy likely way underinsured for 2020 build costs. But as it’s a spanking new mortgage, it needs new insurance coverage. If property is in an area where NFIP/flood, windstorm or earthquake insurance is required for mortgages, then those too will be needed. Hazard insurance can be super pricey. RM is only too happy to help that happen and it’s usually worked as an aside into the overall borrow. Please please find out just what the full payoff amount is and if RM agreement allows for mom to sell it independently before you start to talk with a Realtor. Please find out $$$ amount before y’all put real $ into the now empty property.
RMs requires owner to pay property taxes as well. See if mom is current in these. Tax assessor delinquency has pretty nasty late fees & interest.
As mom has moved out, it is no longer owner occupied. The StateFarms & Allstate’s require owner occupied to have policy in force & do renewals. Property will need some sort of vacant dwelling policy. My experience is vacant dwelling is speciality underwriting by independent agent and limited to really being a fire policy. Not cheap. May need a minimum assessed value to get written too.
if mom has Legally moved out, she is now out of compliance for the terms of her RM. RMs allow for the owner to take trips, go on long long vacations, be away for a few months. But if she has changed her legal address to the NH (like she applied for Medicaid or filed LTC insurance and shows her address as the NH on application), she’s out of compliance. RMs can do a call-in on the loan requiring repayment in full within 120/90 days OR if heirs/ family want the home they need to have funding for paying off RM at 90% within 120/90 days. If they are HUD backed RMs these rules are in place.
Remember selling a home has cost$. If home going on the market, you have to keep yard up, utilities on, spiff up or clean out the interiors, coverage for having folks do walk thru’s, perhaps get repairs done. Whose going to pay these costs & spend time to do whatever’s?? You can look at her old bills or ask around to find out what these costs might be for what the DOM (days on market) is for her area.
If mom has $$$$ for property costs plus private pay for her care, that’s one thing. But if she’s applying to Medicaid, she will realistically have zero $ for property costs due to Medicaids copay. So it’s on family to pay till property sold and the RM fully repaid and if any $ left that $ is hers. She cannot easily repaid you all if you front property costs as that looks like gifting and not allowed by Medicaid. Imo & experience, unless she has a solid 200k, it’s likely she just might outlive her $ and need to apply for Medicaid as average LTC stay is 2.5 years. You don’t want gifting becoming an issue in the future.
Because of all this, sometimes it’s flat just easier to let the RM assume the property and they deal with selling it. If it sells for more than RM tally, mom gets the $.
RMs aren’t really designed to be repaid by owner, their more abt having property be acquired by RM or a subsidiary company to sell it.
I’d suggest you clearly find out how much overall $ RM truly is as a first step. There’s 2 types: full amount loaned and a line of credit loan. Loans are usually 45-55% of property value. Both types can actually be on a draw but LOC type is lower interest and only includes actual draw done for tally of $ repayment. HOWEVER Both types will have all sorts of fees, interest, whatever’s atop $ loaned; AND can be quite a lot of $.
Some have insurance bundled into loan. Scenario is elder owns home outright for decades and has old low premium homeowners policy likely way underinsured for 2020 build costs. But as it’s a spanking new mortgage, it needs new insurance coverage. If property is in an area where NFIP/flood, windstorm or earthquake insurance is required for mortgages, then those too will be needed. Hazard insurance can be super pricey. RM is only too happy to help that happen and it’s usually worked as an aside into the overall borrow. Please please find out just what the full payoff amount is and if RM agreement allows for mom to sell it independently before you start to talk with a Realtor. Please find out $$$ amount before y’all put real $ into the now empty property.
RMs requires owner to pay property taxes as well. See if mom is current in these. Tax assessor delinquency has pretty nasty late fees & interest.
As mom has moved out, it is no longer owner occupied. The StateFarms & Allstate’s require owner occupied to have policy in force & do renewals. Property will need some sort of vacant dwelling policy. My experience is vacant dwelling is speciality underwriting by independent agent and limited to really being a fire policy. Not cheap. May need a minimum assessed value to get written too.
if mom has Legally moved out, she is now out of compliance for the terms of her RM. RMs allow for the owner to take trips, go on long long vacations, be away for a few months. But if she has changed her legal address to the NH (like she applied for Medicaid or filed LTC insurance and shows her address as the NH on application), she’s out of compliance. RMs can do a call-in on the loan requiring repayment in full within 120/90 days OR if heirs/ family want the home they need to have funding for paying off RM at 90% within 120/90 days. If they are HUD backed RMs these rules are in place.
Remember selling a home has cost$. If home going on the market, you have to keep yard up, utilities on, spiff up or clean out the interiors, coverage for having folks do walk thru’s, perhaps get repairs done.
Whose going to pay these costs & spend time to do whatever’s??
You can look at her old bills or ask around to find out what these costs might be for what the DOM (days on market) is for her area.
If mom has $$$$ for property costs plus private pay for her care, that’s one thing. But if she’s applying to Medicaid, she will realistically have zero $ for property costs due to Medicaids copay. So it’s on family to pay till property sold and the RM fully repaid and if any $ left that $ is hers. She cannot easily repaid you all if you front property costs as that looks like gifting and not allowed by Medicaid. Imo & experience, unless she has a solid 200k, it’s likely she just might outlive her $ and need to apply for Medicaid as average LTC stay is 2.5 years. You don’t want gifting becoming an issue in the future.
Because of all this, sometimes it’s flat just easier to let the RM assume the property and they deal with selling it. If it sells for more than RM tally, mom gets the $.