Yes, there are many opportunities for elders to get taken advantage of in reverse mortgages, so consult a real estate attorney and/or advisor before doing any reverse mortgage.

The most common practice when buying a home is to make an offer on the home you want to buy ‘contingent’ on the home you own selling first. That means you’re not stuck with the financial responsibility for two homes. That does however mean you have to have folks coming into your home to look at it while your grandparents are still living there. So it might not be possible for your grandmother to get your grandfather out of the house on a moments notice when a real estate agent wants to show the house. If your grandparents are financially capable of buying one house, and then selling theirs, that might be best in your situation. Make sure there is no penalty for early payoff of the mortgage, if they intend to pay off the new mortgage with the proceeds from the sale of their home. Some reputable builders offer something called a home trade program, where they will buy your home when you buy theirs. Most will pay close to fair market value. At least 90% of FMV is usually fair to allow them to pay expenses, etc.

Best advise, get a professional realtor to walk you through it.

Hi Grammie,
Good Question Dear Friend.. I would like to know my self..
Your Friend,
poppy1

Do you want to sell your grandma’s home???? I don’t understand your question..b/c in the body of the message you talk abt her buying a house.

The idea behind reverse mortgages is that they are supposed to be issued to people who will pass away prior to the expiration of the reverse mortage’s term. People lose their homes when they are healthy enough to live past teh reverse mortgage’s term.

A typical reverse mortgage will have a 30 year term. (You take out the mortgage, and for thirty years you receive payments. from the mortgage company.) In the unlikely event you live for the full 30 years of the reverse mortgage, the mortgage company will have completely paid for the property. The homeowner then has two options. First, the owner can repay the amounts owed on the reverse mortage. Second, the owner can turn the property over to the lender.

It is rare, but it happens.

Yes, speak with their attorney first. Best to know if she can sign for grandpa if he is incapacitated or unable to comply due to mental incapacity. A Realtor can help you with selling their current home. Moving them before you put the house on the market is a good idea. Less for them to go through. Maybe grandma could give you power of attorney.

to make it simple, when someone who has nothing and about less than 10 years to live, they do a reverse mortgage. They give up the house to the bank and the bank gives them a VERY small monthly payment for it.

Instead of the homeowner that ownes the house giving money to the bank, The bank owes the house and gives money to the prior owner.

I haven’t seen such articles and I don’t think you have either..

Reverse mortgages are set up as non-recourse loans. Eg, the lender and FHA absorbs any loss at the time of sale. Therefore the borrower cannot lose their home just by doing a reverse mortgage.

The borrower’s heirs may have assumed they’d get the house when mom/dad died, but that was only if the estate could pay back the loan (and if it could, they wouldn’t have gotten the reverse mortgage in the first place).

I could see someone getting the reverse mortgage and being unable to pay all of their bills and still losing their home for other reasons such as property taxes. (If the property taxes and insurance aren’t paid, the reverse mortgage can become due.)

And alas, there is always the possibility of fraud.

i think it is the best thing since slice bread!!!

If you own your home 100% then you will not loose it via a reverse mortgage. The bank pays you until they have paid for the house. At that point they stop paying and wait for you to pass to claim their property.

Some people may be doing this while still owing a mortgage. If they default on the mortgage they owe then their homes can be foreclosed.

a reverse mortgage is just a equity loan either in a lump sum or monthly payments. They can foreclose on it like any other type of loan and there are fees and points up to 10% of the amount borrowed upfront along with an adjustable interest rate.

if you have to go to a nursing home the bank will call the debt due. If you let the home fall into disrepair they can call it due. If the property taxes or insurance become one day late they can foreclose.

many dangers and scams out there

it is expensive, but a good idea if you NEED the money.

IT is a VERY expensive way to get money

There are a lot of variables that come into play here. Starting with your age, if you are a younger senior and you take all the equity out of your house, live to be a ripe old age, your daughter could possibly owe more on the reverse mortgage than the home was worth. Since a reverse mortgage is a nonrecourse loan, which means that only the house has to pay the loan back, your daughter would not be liable for the difference. If the real estate market goes back up and you only takes out what you need to live on, the payoff of the reverse mortgage could be handled with a forward mortgage, to retain ownership of the home.
The best way to find a where you stand and if a reverse mortgage will work for you and your daughter is to contact a reverse mortgage specialist. The information should be free.

With reverse mortgages, the home is always yours. You can refinance out of it or leave it to whoever you want. The loan will need to be paid, but they can certainly keep the home.

What you describe is exactly how the process works. Your daughter still inherits the house, she just has to pay the debt on it. If you don’t want her to owe anything, you can’t borrow. It’s that simple.

There are many types of reverse mortgages. But the major ones are: federally insured reverse mortgages, single-purpose reverse mortgages, and proprietary reverse mortgages. When the federal government provides insurance for the mortgage, it is called federally insured reverse mortgages. Single-purpose reverse mortgages, and proprietary reverse mortgages are financed by the agencies authorized by government, banks and financial mortgage companies. There are pros and cons for each of these mortgages. You need to consider them carefully before submitting your application.

The larger the loan becomes the more the banks will be owed. This simply means that your equity will shrink over time. Therefore when your father passes away you will inherit a smaller portion of the homes value. If you are the majority shareholder, you can opt to keep the home but will be forced to pay off the loan.

you can’t have it both ways . she could probably have it if she paid back the reverse mortgage on your death.- do a reverse mortgage with your daughter now - let her pay you now monthly

There’s a lot of controversy on reverse mortgages - mainly because of interest rates and how it leaves surviving family members to pick up the pieces in the event of death.

I know financial institutions are pushing this - but the AARP warns against them becuase you are basically turning your home over to the bank after you die and any surviving familiy members have no say-so in the possessions and property.

Please do as much research as possible and talk to your immediate family about your choice. There have been reports of people owing the bank MORE than the home was valued at and the family was in financial hardship as a result -

Best of luck!

All of them do.

If your daughter repays the loan you are taking out then she can keep the house.

Hi,

If you are a legal heir, you will be asked to pay. If not, the mortgage company will initiate steps to repossess the house. You will have to take a decision depending on your financial circumstances and willingness to retain the home. It’s better to consult an expert. Checkout for some useful info and tips. Good luck!