Posted on: 17th Jan, 2005 02:02 am
Before you select a reverse mortgage, you should think again for your heirs. They need to be informed of the details of this deal. This is because, in reverse mortgage you keep getting a certain amount and you never pay back anything. Thus the home equity keeps decreasing. Yet the debt can never exceed the value of the house. The lender will always get the lion's share leaving barely anything for the heirs. The options for the heir after the debtor dies are:
- Repay the loan balance and regain the house.
- Sell off the house and pay off the loan with the proceeds. Keep the rest if any.
- Refinance the mortgage by some other package, which allows repayment.
Zero. The proceeds from a Reverse Mortgage aren't taxable.
It will not be taxable. this scheme is specially designed for sr citizens.
Can the heirs repay the loan and get deed from Reverse Mortgage without going thru probate?
if there is no will, then the heirs do not have to go for a probate. as far as the reverse mortgage is concerned, the heirs will have to refinance it in their names and pay it off in order to save the property.
my mother had a reverse mortgage. when she passed away, my sister repaid it (in 2009), and now has the deed to the house (my brother and i, the only other heirs, gave up our interest through quit claim deed). since this is the first home my sister has purchased, would she be eligible for the first time homebuyers credit?
Hi plaw,
As your sister already has a property in her name, she won't be able to qualify for the first time home buyer's tax credit.
Thanks
As your sister already has a property in her name, she won't be able to qualify for the first time home buyer's tax credit.
Thanks
Don't let your parents do this. It is impossible to get a refinance loan in today's banking environment and you will lose your inheritance. Reverse mortgage should be illegal if the heirs don't want it. Especially if the house was in a family trust. My sister and I will lose everything our father worked so hard for because our step mom was selfish.
R Horton you may have had a selfish stepmother, but that isn't reason for you to state that reverse mortgages ought to be illegal. There are plentiful examples of elderly folk who have benefited substantially from the ability to obtain a reverse mortgage. Not every heir is hurt. Furthermore, one's property is just that - one's own. An owner of property need not answer to anyone - heirs included - when it comes to the disposal of that property.
I don't mean to imply that you're selfish, but you're wrong to issue such a blanket statement. I also don't mean to impugn you concering your own situation, but that cannot be the basis for other people's decisions.
I don't mean to imply that you're selfish, but you're wrong to issue such a blanket statement. I also don't mean to impugn you concering your own situation, but that cannot be the basis for other people's decisions.
>>Reverse mortgage should be illegal if the heirs don't want it.
Why should Heirs determine how their Parents are allowed to spend their own money? If they're just barely getting by, why should you be allowed to tell them they can't liquidate some of their assets to improve the quality of their lives?
George won't say it, but I'll say it - "you're selfish". Your parents don't owe you a dime, and they deserve the right to spend their hard earned money and equity anyway they see fit, and don't have to ask anybody's permission, including their Heirs.
Why should Heirs determine how their Parents are allowed to spend their own money? If they're just barely getting by, why should you be allowed to tell them they can't liquidate some of their assets to improve the quality of their lives?
George won't say it, but I'll say it - "you're selfish". Your parents don't owe you a dime, and they deserve the right to spend their hard earned money and equity anyway they see fit, and don't have to ask anybody's permission, including their Heirs.
Amen!
what does the lender mean by they will take a deed in lue of foreclosure
hi rabbit!
welcome to forums!
as you're unable to pay the dues, the lender will not foreclose the property, rather they would go for a deed in lieu of foreclosure. in this case, the lender would sell off the property but he won't come after you for the balance dues resulting from the sale. however, the credit affects in case of a deed in lieu of foreclosure and a normal foreclosure would be the same.
feel free to ask if you've further queries.
sussane
welcome to forums!
as you're unable to pay the dues, the lender will not foreclose the property, rather they would go for a deed in lieu of foreclosure. in this case, the lender would sell off the property but he won't come after you for the balance dues resulting from the sale. however, the credit affects in case of a deed in lieu of foreclosure and a normal foreclosure would be the same.
feel free to ask if you've further queries.
sussane
Rabbit, a deed in lieu of foreclosure is a deed from you back to the bank, granting full title to the property to the bank; instead of having them go through the agonizing process (for everyone) of a foreclosure. It is a faster, more efficient way for them to collect the collateral for their loan, and it saves much stress for you, for them, for anyone else involved in the process. That's the general consensus, anyway.
If you have reverse mortgage on a house and that person passes, what happens to the balance of the line of credit that was not used? Can the money go to the trust or does the bank keep it?
Dee, when a borrower dies, the loan in question becomes payable in full. The estate of that person would be liable for repayment, and the line of credit becomes null and void. There is no money for the bank to "keep." By that, I mean that if the line was $200,000 and the amount borrowed was $150,000, that'd make $50,000 available to the homeowner. At death, that $50K simply disappears. The bank lends nothing out to anyone in that scenario. I hope that's clear.