Get A Reverse Mortgage

Christian Said:

Can a Person Receiving a Reverse Mortgage be Absent from the House for Long Stretches of Time?

We Answered:

Yes, the reverse mortgage must be on your primary residence. They will verify it during the loan process by looking at your utility bills, mailing address, etc.; especially if they see you own multiple properties. You cannot be gone from your primary residence where you have the reverse mortgage for more than 12 consecutive months. Lenders ask that you tell them when you will be gone for a while; don't know if folks actually do that, but if you plan to be gone for more than 6 months, you might want to do that. The lender will typically send you quarterly letters asking you to sign and send it back proving that you still live there. If you haven't returned it after a few months (say 6 or 9 months), or if it is undelivered, they may send someone out to check. But it is not a problem if you are a snowbird and travel around during the year visiting different family members or vacationing in Mexico. If San Diego is truly your primary residence where you spend a majority of the year, then don't worry about it. See an excerpt below from one lender:

"The subject property must be the principal residence of each borrower, which is defined as the dwelling where the borrower maintains his or her permanent place of abode with residency of a minimum of 183 days per calendar year. A person may have only one principal residence at any one time."

Nancy Said:

If you take out a reverse mortgage do you still get the benefit of house price increases while you have this?

We Answered:

Your kids will get the benefit unless you refinance to the higher amount.

Raul Said:

If I take my name off the deed to my how so my wife can get a reverse mortgage, do i lose everything?

We Answered:

The below, from http://www.reversemortgagepage.com, answers the question pretty much exactly,

What if one spouse is under 62?

The short answer is that this means a reverse mortgage is not available on the property. Both husband and wife must be 62 or over. This is only true, of course, if the property is titled in both names, typically called a joint tenancy when between a husband and wife.

With a reverse mortgage, the loan comes due at the death or permanent move of the person whose name is on the reverse mortgage. The reverse mortgage lender, at this point, will want the reverse mortgage to be paid off. Therefore, the living (or still living there) spouse will be forced to come up with sufficient funds to pay off the reverse mortgage. This can obviously be quite daunting.

However, a reverse mortgage coming due does not mean the house belongs to the bank or to the reverse mortgage lender. The house merely secures the loan. The lender just wants the money. In fact, they probably don’t want the house anymore than you want to give them the house.

So ultimately, the person who remains in the house will need to have sufficient funds to pay off the reverse mortgage, or will need to move out.

First, “the move out.” When the spouse on the reverse mortgage dies or moves to a nursing home, it may in fact be a better option for the other spouse to relocate. The house may be too big, the responsibilities to great, etc.

Second, “the payoff.” Life insurance and/or long-term care insurance may be the only possibilities. A life insurance policy can be purchased to provide sufficient funds to satisfy the reverse mortgage. In fact, the life insurance can be put in a trust to avoid the probate process, thereby making the funds immediately available for use to take care off the reverse mortgage. The long-term care insurance would need to be substantial in order take care of the care, the bills, and the reverse mortgage.

Things to keep in mind

1. The insurance policies must be sufficient to take care of the intended purpose.

2. It is best to speak with a financial planner and/or insurance agent to make sure your goals get met.

3. Make sure the terms of the reverse mortgage in general.

4. Make sure, specifically, you know how long a person being out of the house constitutes a “permanent move.”

Best of luck in all your endeavors.

Tonya Said:

I would like a reverse mortgage, but recently the city rezoned our property to commercIaL?

We Answered:

You can't.

If the city has rezoned your home, the legal term is called "legal non-conforming".

That means that as long as your structure stands, you can use it as a residence, you can sell it, you can mortgage it, you can do anything you want to with it.

However, if the property is a total loss, they will not permit you to rebuild....that would defeat the entire purpose of rezoning your propoperty.

In many, many years of underwriting, once it is discovered, I have never seen a city issue a letter granting permission to rebuild in the event of a TOTAL loss.

Discuss It!

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