Reverse Home Mortgage
Information Regarding Heirs

Introducing the reverse home mortgage, the answer to a fuller life for senior homeowners reaching retirement age. Isn't it time to fulfill your dreams after taking care of those you love for many years? Does stable income after the age of 62 requiring no repayment appeal to you? Or does the worry of leaving debt behind to your heirs stop you from pursuing the program?

Reverse Home Mortgage Information

Let's face it. You're already waiting longer than your parents to retire. So does this promise of income seem a little too good to be true?

Well, think again. With sufficient equity in a home, homeowners retain ownership and even the freedom to make home improvements with reverse home mortgage financing.

Let's back up a moment for a quick overview of the reverse mortgage program. For senior homeowners of at least 62 years old, borrowing against equity in their homes can provide ongoing stable income without the pressure of a monthly repayment schedule.

Here's what they don't get - The requirement to pay back the funds!

Homeowners are still responsible for paying property taxes and homeowner's insurance, just as before. But receiving a stable monthly income without a house payment equals the comforting difference.

Heirs of Homes Financed by Reverse Mortgages

Okay, so far so good. But what about heirs? When they inherit the house, will they have to pay off the debt accumulated by your reverse home mortgage financing? How does the loan eventually get repaid?

These are valid questions that I'm often asked by senior homeowners and their family. The answers are simple.

  1. The amount borrowed does not have to be repaid as long as property taxes are consistently paid, normal upkeep of the house is performed, and the homeowner remains living in the home.
  2. Heirs can refinance the balance of the loan (or pay it off in cash) and keep the house.
  3. Heirs can sell the house. Any profit is theirs to keep. However, if the sales price is less than what is owed, the deficiency is forgiven.

Read news regarding surviving non-borrowing spouses and foreclosure: December 2013 Reverse Mortgage Court Rulings which follows October 2013 FHA Reverse Mortgage News.

Reverse Mortgage Income and Alternatives

Next in this series, learn who to contact for help evaluating income for senior homeowners.

If you begin to feel that reverse mortgage plans are not right for you, consider your other options. Have you thought about selling your house? How about renting it and moving to a warmer climate. Perhaps a smaller condo or apartment might be more manageable.

Ask Kate About Heirs Selling a House with a Reverse Home Mortgage

By Elvia G. from El Paso, Texas

Kate,

Who is in charge of selling a home financed with a Reverse Mortgage after the owner dies? Is it the executor or the lender?

Ask Kate answers: Heirs Selling a House with a Reverse Home Mortgage

Dear Elvia,

The heirs or executor are responsible for selling a home financed with a Reverse Mortgage.

But let's say after the loan becomes due and payable that the home is not sold in a timely manner. In that case, the lender will start foreclose proceedings on the property.

Best wishes,

Kate

Ask Kate

Do you have a reverse mortgage program question?

Go ahead, ask Kate so you can arrive at an informed decision.

Important: Senior homeowners should consult a financial planner, tax accountant, and/or attorney as applicable to evaluate their circumstances before financing with a reverse mortgage. Even if not a loan requirement, reverse mortgage counseling is highly recommended.

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