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I inherited a Malibu vacation home from my aunt, but she had a reverse mortgage and withdrew all of the equity. What should I do?

I already own several properties in NY but I don't have any experience refinancing or getting a new mortgage after a reverse mortgage. I'm confused about the process and financial implications. If someone could explain my options that would be great. by thomasina624 from Montauk, New York. Jul 24th 2013 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 8,052 contributions

You basically have 3 options.. you can pay it off, refinance it, or sell it.. but unlike a regular conforming loan, you would not be allowed to assume the reverse mortgage.. Call the lender and get a payoff.. and check with a local agent and see what the home is worth.. if there's equity, then you can exercise one of the 3 options I just listed.. if the property is not worth what is owed, then all you need to do is contact the lender and let them know you have no intent on keeping the property and wish to assign it back to them.. this will not affect your credit in any way.. it's one of the features built into a reverse mortgage.. if the borrower dies, there is no further liability.. 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

Jul 24th 2013
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Steven Cook (stcookmortgage@gmail.com)
#38 ranked lender in Washington - 256 contributions

Basically, you would just be doing a refinance to pay off the existing mortgage - actually you will be basically buying it from the bank which holds the reverse mortgage. It is very difficult to pull ALL the equity in a reverse mortgage as there are percentage limits in the laws that prevent taking it all, though the interest may have brought it near the total value.Talk to a local lender who is able to assist you in walking through the process of understanding what the steps will be for doing this refinance. If there is nearly no equity you may have to pay something into the system (like a down payment) since this is not a primary residence.

Jul 24th 2013
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Dave Metsker (DaveMetsker)
#38 ranked lender in Oregon - 2,317 contributions

Based on a recent court decision, as a relative, you can pay off the loan at 95% of the appraisal value, or the loan balance, whichever is less. In California, as well as several other states, the decline in property value has caused many reverse mortgages to be "upside down". I am a full-time specialist in reverse mortgages, and would be happy to assist you with this, starting with a realistic valuation estimate, at no charge to you, or the estate. There may also be probate issues involved, and I can assist you with these, as well, perhaps even saving you money on the attorney fees associated with probate.

Jul 24th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#2 ranked lender in New York - 2,237 contributions

More info is needed, current amount owed and current value? You should be able to refinance the home at a max of 95% of the appraised value, regardless of what is owed. The loan size is where you may run into a problem. If you already own several properties in NY you will have options most likely. Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation ask for Michelle or Benny. We will find the Best Mortgage Option to suit your needs! Check us out at www.BestMortgageOption.comAsk us about the awesome discounts we offer heroes as a Homes for Heroes affiliate!

Jul 24th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#2 ranked lender in New York - 2,237 contributions

You can go up to 90% as a second home on a rate and term refinance if the loan amount is 417K or less.

Jul 24th 2013
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All the above answers are correct. Most of the Reverse Mortgage banks will give you up to one year to either refinance or sell, maybe even more depending on each particular case. Check our website at: www.reverseunited.com (works best with Google Chrome) It is a very, very complete and informative website and will answer most (if not all) of your questions. We are here in Queens, NY but from the 10th. of August to the 17th. I will be spending some time in Amagansett, NY as I do every year and we have several friends in Montauk that we visit everyday. So perhaps we could meet personally then and discuss your situation and options more "in depth". In the meantime, please check our website and navigate through it. All my information is there, if you wish to contact me. Thank you and good luck, Paul.

Jul 24th 2013
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Manuel Gonzalez (mmortgage1)
#91 ranked lender in New Jersey - 89 contributions

Your going to get the same advice from me. Loan can't be assumed unless your of the required age for reverse mortgages in Malibu.

Jul 24th 2013
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Raymond Denton (Raymond)
#12 ranked lender in Ohio - 224 contributions

Since the equity is depleted, you can purchase it from the Bank for 95% of its current value.

Jul 31st 2013
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