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Renee Said:

What to do with a house that seems unsellable and you have limited or no equity?

We Answered:

The situation is complicated by the reverse mortgage your dad took out.

The terms of a reverse mortgage are that if the house is sold, the entire sum plus interest becomes immediately due and payable. Or if the occupant dies, the house is sold and any remaining equity after the reverse mortgage has been settled is due to the heirs.

A reverse mortgage does not work like a regular conventional mortgage where one can walk away from the house. I don't think one can simply walk away from a reverse mortgage.

I strongly suggest you consult a lawyer knowledgeable in such matters.

Phillip Said:

Reverse mortgage limits in the Virginia counties of Loudoun, Madison, and Clark.?

We Answered:

You can only use the Fannie Mae Home Keeper program for a purchase.

The Home Keeper only allows for 1 unit properties - single family, condo, townhouse.

There is only one limit for the country - $417,000.

The FHA HECM is the program that has the loan limits by county. But you can not use the HECM for a purchase.

If you were taking a HECM on a primary residence and using the funds to purchase a 2nd home you can do that.

For the HECM the loan limits would be:

Loudoun - $362,790
Madison - $200,160
Clarke - $362,790

But remember, that's not the amount you can borrow as a lump sum at closing.

If you would like some figures, email me. I don't do VA, but I can give you the numbers.

Victoria Said:

Are you ready seniors for more rip-offs?

We Answered:

I don't know what your question is.

1. insurance rates have been increasing far more than the rate of inflation for many years now.
2. reverse mortgages are a creation of the finance industry - similar to the creative "investment vehicles" that wall street is always coming up with and that, in large part, cause the recession
3. there are not any "age limits" in the health care bill. There are not any "death panels."
4. Your "limits on the unborn" are based upon a political definition used by conservative politicians to rile up voters
5. Legal jargon? We are a nation of laws and, as such, we have laws composed with "legal jargon." Much of that is because the laws have to be flexible enough to deal with the unforeseen but exacting and rigid enough to be enforceable.

Sonia Said:

Is there a downside to taking a reverse mortage?

We Answered:

There really is only one downside to taking out a reverse mortgage. The children are not left with 100% of the value of the home for an inheritance.

With both of your parents being 78, they qualify to get around $230,000 to use as they will. The house is still in their name it just shows that there is a mortgage on the home like any other conventional mortgage. They can take the full amount in a lump sum, split it up in monthly payments or leave it in a line of credit which right now has a growth rate of about 7%. This means if they didn't touch the line of credit in one year they would have $246,000 dollars. With the line of credit they are only charged interest on what they pull out of the line of credit and that interest rate right now is right around 6.5%. The rest of the money sits there untouched until they need it. These loans are set up so that there should always be equity in the home to pass along to their heirs.

All of this money is tax free and there are no monthly payments to make. You CAN make a payment if you want and are concerned about keeping the balance down. You even get a tax break if you pay back the interest you are being charged.

This is a much better option than a home equity loan which you have to make high monthly payments and if something happens and they get behind could lose their home.

So really the only downside to reverse mortgages is that someone like you wouldn't get 100% of the home value for your inheritance.

I'd be happy to send you some more information if you would like. This is what I specialize in and our company can do reverses almost anywhere in the country. If you would like some more information please email me at bburns@griffinloans.com