What happens to the heirs with a reverse mortgage

Great question. Most reverse mortgages allow for the borrower (your father) to establish a cap in the amount of equity that can be paid to him in monthly payments. This would allow for some level of equity and/or inheritance protection. Most importantly, upon your fathers passing the reverse mortgage needs to be paid off. This would require you to either a) obtain a new mortgage on your fathers (now your) home, qualifying yourself -or- b) sell the home and payoff the existing lender. The difference between this and a traditional mortgage would be that on a traditional mortgage you could still make payments to that lender upon your fathers passing, without the need to qualify on your own merits for a new loan.

Hi Martin, are you on the title to the home now too? I am sure your father has the need for a Reverse Mortgage, with the poor economy, many seniors are faced with realization that the money they have at retirement is not going to be enough and many seniors are wanting a Reverse Mortgage to eliminate their mortgage payment so that they may have extra income or if their mortgage is paid off they can have a line of credit that will give them an increase in their monthly income with TAX-FREE money.Even with a regular mortgage you have 3 months to either repay the loan or if you want the home you can refinance the home in your name. Now with a Reverse Mortgage you have up to 12 months to take care of your father's estate. You also get to have the benefit of deducting the interest of the Reverse Mortgage as an heir to your father's estate so your inheritance tax will be less for you.

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