Can you do a reverse morgage when you are losing your second?
home? My mother in law wants to ddo a reverse mortgage and is losing the 2nd home due to the situation with the loans that are going on right now. Should she wait to lose the 2nd home first? or do reverse mortgage befores she loses her 2nd home?
tom4bucs posted: 02 Sep at 7:02 am
doesn’t a reverse mortgage sell the house out from under you (and you get to live in it till you die) so that one has to be paid off – - and by the way – that leaves no house for the inheritance
she needs to have a sit down with her banker or financial planner to examine the fine details of her holdings –
and you may want to ask if your wife can sit in with her to help her make this decision
sorry – I do not know much about about them – but even I am concerned
have a great 2008!
heyteach posted: 02 Sep at 7:54 am
The two issues are not really connected.
Here’s some info on a reverse mortgage:
http://www.aarp.org/money/revmort/
If she actually has TWO HOMES, the loss of one is irrelevant to a reverse mortgage which has to do with the home a senior lives in. He ends up either having started with a paid off house or in the process the house IS paid off and the equity of the house, less interest, etc., is then doled out to him based on a formula for his anticipated lifespan.
The person must still pay his real estate taxes and his utilities and for any maintenance issues for the house.
“When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.”
http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm
Also:
“HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.
10. How do I receive my payments?
You have five options:
Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term – equal monthly payments for a fixed period of months selected.
Line of Credit – unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted.
Modified Tenure – combination of line of credit with monthly payments for as long as the borrower remains in the home.
Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower.”
http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm
If there is a second home and a deficiency judgement, that might have to be paid and there would be equity in the first house, so that COULD potentially be an issue. You’d really have to ask someone who is in the business in that state AND who knows the details of the situation. If you meant second MORTGAGE, not second HOME, then it’s unlikely she’s going to be able to do a reverse mortgage.