NLIC.org

Victor Said:

Help with a Reverse Mortgage?

We Answered:

Hello Tara,

A Home Equity Conversion Mortgage HECM) which accounts for over 90% of reverse mortgages and is regulated and insured by the Federal Govt. can be considered due if the borrower does not reside in the home for 12 CONSECUTIVE months. I wish your grandfather well and hope he is on his way home soon.

For disclosure purposes I am a Reverse Mortgage Consultant with 5 years experience and work for one of the top 5 Lenders in the country

Francisco Said:

What is a reverse mortgage?

We Answered:

Takes the equity he has in his property out and encumbers the property for that amount with no monthly payments.

When he dies, his estate may eitehr pay off the reverse mortgage and take title, or pass it on to the mortgge holder

Lucy Said:

how do you feel about reverse mortgage?

We Answered:

I am not in favor of the "reverse mortgage" concept. IMHO, it is too risky. Seems to me that with a reverse mortgage, you sign over title to your house to someone else, and you run the risk of being evicted. This may not be the case, I don't know. I just don't like it.

My advise would be for your mom to take a home equity line of credit on the property. With this she can write a check if she needs to and it goes against the home equity. You and your brother could make monthly payments on it if she could not. or maybe the equity line of credit could be negotiated with no payments, with the property as collateral I would think that would be possible. Even interest only payments would not be a large load for you and your siblings.

I wish my brother and I had done this with my dad when he sold his house in Sun City West, to go in to assisted living. We could have rented the house and still kept the property. It could have sold for nearly twice what he sold it for, only a year after he sold it. And what he ended up taking out of it in equity loans before he passed would not have come close to that value.

62! Shes got a lot of years left in her! I would go with the equity line of credit if she needs the money. With perhaps an eye to selling it in 10 years or so. I say, no to reverse mortgage... did I say that already?? ;-)

Jim

Tyrone Said:

Any true testimonials about how a reverse mortgage helped them.?

We Answered:

I have know people who benefited from obtaining a reverse mortgage. However, closing costs for a reverse mortgage are very high.

You should search Google and read some of the very good information there about reverse mortgages, and then decide if this suits your plans.