Posted: Fri Mar 26, 2004 4:54 am Post subject: When do people have to pay reverse mortgages back?
Reverse mortgages usually don't require any monthly payments towards its repayment. A borrower does not have to make payments towards the repayment of the debt until and unless he or the co-owner vacates the property. In general, reverse mortgages are payable when the last surviving borrower dies or sells the property apart from relocating to some other location.
However, lenders may require repayment of such mortgages at any time because of the following reasons.
The borrower may file bankruptcy.
The borrower may donate or abandon his home.
He may fail to pay the property taxes or make home repairs or fail to keep the home insured.
A reverse mortgage is also payable provided it has an acceleration clause which restricts a borrower from the following actions.
Renting a certain portion or the entire property of the borrower.
Adding a new co-owner to the title of ownership of the property.
Changing the homes zoning classification.
Taking any other loan against the same property.
At the end of the loan term, a reverse mortgage requires a borrower or his heirs to pay back the loan amount as well as interest charged on it. In case the borrower uses his loan amount to pay closing costs, then these costs are also added to the loan balance and they must be repaid when the loan term is over.
Posted: Tue Apr 04, 2006 8:58 am Post subject: Aging Parent who has a reverse mortgage
My parent has a reverse mortgage. Her mobility is becoming very limited but not to the point of being put into a home. She does however desire to move to an apartment based on her income but with the house, she does not qualify. She would like to sell the house (and of course pay back the loan) but that would also considered funds which would cause her not to qualify. Can the house be put in my name, and the house be put on the market to sell (and repay loan)? That way, my mother will not show any assets from the house.
I would like to know the problem that your mother is facing with the current mortgage. Since, she already has a reverse mortgage which needs not to be paid back during her lifetime, why is she thinking of getting rid of it?
As per the financial condition that you mentioned, I don't think it will be a wise decision for her to move out of the mortgage at this point of time.
If the financial condition improves somehow and other conditions satisfy, then she can make a change.
The house can't be transferred to you with the reverse mortgage due on it and the mortgage is not transferable to you.
She has to repay the loan first if she wants to change the title. You may talk to your lender for a suggestion. If you want my suggestion, then I would stress on continuing with the loan now.
My grandmother currently has a reverse mortgage. My question is; who exactly are considered heirs? My grandmother has 3 surviving children, none of which would ever qualify to take over the loan in the event of her death. One is on disablility, one is on drugs and the other has no (if ever) employment abd basically does home health care. I would hate to she the government take her home which she owes less than 100,000 and resell it for a huge profit. As her grandaughter what can I do? _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Posted: Thu Apr 20, 2006 10:49 pm Post subject: RE:
Hi Tracy,
Welcome to the Forums.
In a reverse mortgage, the term 'heirs' indicate those who will inherit the property after your grandmother as stated in the will. What you can do is ask your grandmother to talk to the lender if he will allow her children to take over the responsibility of paying the mortgage.
Since the children are disabled, drug addict and unemployed, I guess the lender may not accept the proposal. In that case, if your grandmother can transfer her property title in your name, then after she dies you can take over the responsibility of the mortgage. But your grandmother needs to discuss this with her lender.
Posted: Thu Apr 20, 2006 11:11 pm Post subject: RE:
Hi,
I think you should sort it out with the lender. You may be allowed to pay the mortgage when your grandmother is no more. But I guess she's doing well, isn't it? So, don't worry, just talk to the lender and know about the process.
For more details on reverse mortgage, please read this section.
Sam
