How does a reverse mortgage work?
My parents are considering taking out a reverse mortgage on their home, however, I don't fully understand the loan concept so I'm a little skeptical. My concern is, what happens if my parents pass away with debt accumulated as a result of a reverse mortgage? Will the bank repossess their home or will I be somehow responsible for the debt? by MMause_653_674 from Orlando, Florida. Aug 10th 2012
Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,431 contributions
Reverse mortgages have provisions that allow for the loan to continue once one of the borrowers passes. Once the second borrower passes, the heirs have 18 months to retire the loan. If there is equity, they can sell or refinance. If the home is upside down, then the heirs DO NOT have any obligation to pay the shortage. For more information about Reverse mortgages, go to http://www.loansa2z.com/reverseMortgages.php. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
A reverse mortgage is a loan where your principal balance INCREASES each month because the lender pays the borrower monthly based on the provisions of the mortgage agreement. No payments are due on this type of loan; however the balance must be paid once the last owner is no longer living in the property. If there is equity in the home, you can pay off the mortgage and keep the property, or refinance the balance owed and keep it.. You can also sell the home, payoff the balance and the equity goes to the estate or heirs.. if the home is worth less than what is owed, then FHA mortgage insurance pays the deficiency and no liability is passed on to the estate or heirs.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
The National Council on Aging has an excellant booklet called "Use Your Home to Stay At Home" that you can access on their website. It will answer your basic questions about Reverse Mortgages. I'm located in Central Florida and will be happy to meet with you and your family to discuss rheir options. Ryck Hundredmark (NMLS 241483) Affordable Home Loan Corporation ( NMLS 321134) 386-295-1388.or contact me at Ryck@floridamortgageanswers.com and I'll be happy to answer your questions.
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