Posted on: 14th Jan, 2007 10:36 pm
My father-in-law and mother-in-law have a lump sum payment on their credit cards, around $5000. But their income is limited. And they are elderly aged 81 and 89 years. They have never managed their money well and I am now just trying to help them take out a reverse mortgage and enjoy the remaining years of their lives. My wife and I don't want their money but we want them to enjoy it all. I have heard that payments on credit cards are going to be doubled. Since my wife and I have no credit card debts, we don't know exactly when this is going to happen. If it happens, my in-laws would be in trouble as their income is already very low. Will a reverse mortgage be the right choice? When will be payments going higher. Is it for certain levels of debt?
Yeah, the minimum payments on credit cards have gone up in every state. And it's almost double the amount debtors have been paying in the past. So, opting for a reverse mortgage will be a good idea. They can pay off their credit cards with the cash obtained and probably get some additional income for the rest of their lives.
Hi Howard,
Welcome here.
At the age of 81 and 89, reverse mortgage seems to be perfect for your in-laws. They will borrow against the home equity and can pay off their credit card debts just after taking out cash against their equity. That's the rule for reverse mortgage – take out a loan and if there's any existing loan against the same property, use the reverse mortgage to repay the debt.
I hope you are aware of the fact that the reverse mortgage does not require monthly loan payments, the loan will be paid off only when your in-laws die. You will have to pay off the debt. You can also sell the property and pay off the loan.
Thanks,
James.
Welcome here.
At the age of 81 and 89, reverse mortgage seems to be perfect for your in-laws. They will borrow against the home equity and can pay off their credit card debts just after taking out cash against their equity. That's the rule for reverse mortgage – take out a loan and if there's any existing loan against the same property, use the reverse mortgage to repay the debt.
I hope you are aware of the fact that the reverse mortgage does not require monthly loan payments, the loan will be paid off only when your in-laws die. You will have to pay off the debt. You can also sell the property and pay off the loan.
Thanks,
James.
Since your in-laws are quite aged, they will be able to borrow more against their home as their life expectancy is lower. After they pass away either you or the mortgage company can sell off the property to get back the borrowed amount.
If the sale proceeds exceed the loan amount, the extra cash will be offered to the heirs.
If the sale proceeds exceed the loan amount, the extra cash will be offered to the heirs.
i specialize in reverse mortgage and this seems like the perfect solution for you in-laws. with the proceeds from the loan, they will be able to payoff the high interest credit cards and if they choose they can set up the loan to pay them a monthly income. there are no restrictions on how they use the money. and the best part is they are not required to make any payments until they leave the home. as long a 1 of the borrowers remains in the home the loan is in place & only after the last borrower passes away will the loan become due. it can be satisfied through sale of the property or you can refinance it & keep the home. be aware the the fha hecm loan can be costly to do, but no fees are required to be paid out of pocket & can be rolled into the loan. there are other reverse mortgage programs that are less costly upfront, but require large draws at closing & have higher interest rates. these are generally better choices for homes with a value of over 500k. in ca where i am this is not hard to achieve.
good luck. this a great solution for you in-laws. good for you!
good luck. this a great solution for you in-laws. good for you!
Hi Richey,
Welcome to our forums.
I too feel that a reverse mortgage can be an ideal choice considering the situation. Howard's in-laws will be able to repay credit card bills using a reverse loan. There are various types of reverse loans available in the market. And, by comparing the costs of each, the in-laws will be able to decide upon the one that will suit them best.
What I like the best about reverse mortgage is that there are a number of ways of receiving the loan proceeds and one is free to choose the option he prefers, whether it’s the entire loan amount, a credit line or monthly loan advances.
The costs on different types of reverse home loans actually vary with the FHA HECM being costly than reverse loans offered by state and local governments. But the HECM is less expensive than privately insured reverse loans.
The rates of interest charged on HECM are comparatively lower than other reverse mortgages requiring smaller fees. But when anyone takes out an HECM, in most cases, he gets one of the largest loan advances compared to any other reverse loan.
Thanks,
Caron.
Welcome to our forums.
I too feel that a reverse mortgage can be an ideal choice considering the situation. Howard's in-laws will be able to repay credit card bills using a reverse loan. There are various types of reverse loans available in the market. And, by comparing the costs of each, the in-laws will be able to decide upon the one that will suit them best.
What I like the best about reverse mortgage is that there are a number of ways of receiving the loan proceeds and one is free to choose the option he prefers, whether it’s the entire loan amount, a credit line or monthly loan advances.
The costs on different types of reverse home loans actually vary with the FHA HECM being costly than reverse loans offered by state and local governments. But the HECM is less expensive than privately insured reverse loans.
The rates of interest charged on HECM are comparatively lower than other reverse mortgages requiring smaller fees. But when anyone takes out an HECM, in most cases, he gets one of the largest loan advances compared to any other reverse loan.
Thanks,
Caron.
Hi Howard,
I know i might be a little late to this question but there was a few things mentioned that I thought was unclear.I have been assisting borrowers for the past 3 years with Reverse Mortgages.
I to agree that this could be a solution to your in-laws needs. If no one has offered it to you, there is a free report I can send you called a RMA - Reverse Mortgage Analysis that will give you a clear picture if the reverse is beneficial for your in-laws.
I few things I want to clearify, The HECM is a non-recourse loan meaning that if the debt of the loan out grows the home value, the homeowners or heirs are not responsable to pay back the debt. The mortgage insurance covers that concern.
The home can be sold or laon paid off at anytime. If one of the homeowners passes the other can stay in the property for the rest of thier life. Both must beon the deed. Typically you have up to 12 months to sell the home.
If thier monthly cash flow is tight, they can take a lump sumto pay off immediate debt and take the rest of the proceeds as monthly income for the rest of thier life, this all depends on the available equity.
I hope this helps and will be glad to answer any other questions you may have
Regards
Tony g
I know i might be a little late to this question but there was a few things mentioned that I thought was unclear.I have been assisting borrowers for the past 3 years with Reverse Mortgages.
I to agree that this could be a solution to your in-laws needs. If no one has offered it to you, there is a free report I can send you called a RMA - Reverse Mortgage Analysis that will give you a clear picture if the reverse is beneficial for your in-laws.
I few things I want to clearify, The HECM is a non-recourse loan meaning that if the debt of the loan out grows the home value, the homeowners or heirs are not responsable to pay back the debt. The mortgage insurance covers that concern.
The home can be sold or laon paid off at anytime. If one of the homeowners passes the other can stay in the property for the rest of thier life. Both must beon the deed. Typically you have up to 12 months to sell the home.
If thier monthly cash flow is tight, they can take a lump sumto pay off immediate debt and take the rest of the proceeds as monthly income for the rest of thier life, this all depends on the available equity.
I hope this helps and will be glad to answer any other questions you may have
Regards
Tony g
