Forgotten Your Password?

Need to Register?

Question Icon

Debt payoff and reverse mortgage clarification

I was reading on here that those in my will would not have to pay off the reverse mortgage debt, but then I talked with a banker and they said the exact opposite, and any equity I use must be repaid. Is this because there are different programs maybe other than HECM? I need to use a program that wont result in my inheritors being affected by graiker7345939 from San Angelo, Texas. Jan 2nd 2015 Reply


Larry Gray (lgray_312_247)
#562 ranked lender in California - 1,127 contributions

Generally, a reverse mortgage can be viewed like the opposite of a standard mortgage loan. Instead of the homeowner paying a mortgage payment...the bank is tallying up the payment each month as though there was one, and thus the idea of equity due the bank holding the note on the reverse mortgage.. On the other hand each reverse mortgage needs to be reviewed differently. Sometimes there may have been sufficient equity wherein there is included an "equity line of credit" where the homeowner is paid interest rather than the other way around. I do not have financial expertise regarding that and would suggest speaking with an accountant and the current lender that holds your reverse mortgage. I do know whatever is owed the lender would need to be paid off by the heirs and the remaining equity should go to the heirs.

Jan 2nd 2015
0
0
Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Your heirs will have to pay off the loan when you no longer live in the house. Any equity left in the property will be theirs. If there is no equity, or more is owed on the loan than the house is worth, there is no deficiency penalty. I am a reverse mortgage specialist; call me if you have any questions.

Jan 2nd 2015
0
0
Richard Woodward (RichardWoodward)
#42 ranked lender in Texas - 101 contributions

To answer your question directly, there is no reverse mortgage program that will not affect the equity that your heirs receive. There are several different types of reverse mortgages but for new reverse mortgages which are FHA insured, any equity that remains upon you leaving the home belongs to the estate when the home is sold or refinanced.

Jan 4th 2015
0
0
Ralph Richard Guertin (ralph@absolutelowrates.com)
#137 ranked lender in Florida - 644 contributions

Well the revers mortgages out there now backed by FHA, allows the heirs to inherit any equity after the payoff is completed, once you are no longer able to live in the house. They typically give you 2 6 month periods to sale the house and if actively perusing refinancing or selling I have seen a 3rd 6 month exception in some circumstances...good luck

Jan 5th 2015
0
0
Subscribe to our news feed.