effect on heirs in reverse mortgage

Guest 0.10 Dollars($)

If I take a reverse mortgage, is it going to affect my heirs?

Guest 0.10 Dollars($)

Hi Gibbs,

Your heirs can sell the home to repay or payoff the mortgage from some other means to keep the home.

If there is any money left on selling the house to payoff the mortgage, then the excess amount goes to your heirs.

Samuel

jameshogg · Posted: Thu Jan 12, 2006 1:31 pm Post subject:

After your death the mortgage becomes payable. Your heirs can make the payment either by selling the home or can refinance the reverse mortgage to keep the home in their possession.

Only the outstanding balance on the loan has to be paid. If the money collected from the sale of the house is more than the outstanding amount then the excess amount will go to your heirs.

James

Guest 0.10 Dollars($)

Thanks for the replies. If the outstanding value becomes more than the property value, then my heirs has to pay the excess amount?

jameshogg · Posted: Thu Jan 12, 2006 1:47 pm Post subject:

Hi Gibbs,

I don't think you need to be afraid of that. The reverse mortgage is a non recourse loan. If the loan balance exceeds the market value of the home, then none in your family has to pay the excess amount.

FHA insurance on the reverse mortgage covers up the balance due to the lender as a result. Yours heirs can't be asked for any excess amount.

James

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