Posted on: 06th Nov, 2008 06:02 pm
if my parents get a reverse mortgage then what happens to the 20,000 they owe on a home equity loan?
Hi buddyhollyhjs!
Welcome to forums!
A reverse mortgage allows you to convert a portion of your home's equity into cash. Moreover, when a person applies for a reverse mortgage, the home should free off any other liens or mortgages. As your parents have already taken a loan on the home equity, it will be difficult for them to get a loan. However, they can speak to the lender. Sometimes it happens that you can pay off the other liens and debts with a reverse mortgage.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
A reverse mortgage allows you to convert a portion of your home's equity into cash. Moreover, when a person applies for a reverse mortgage, the home should free off any other liens or mortgages. As your parents have already taken a loan on the home equity, it will be difficult for them to get a loan. However, they can speak to the lender. Sometimes it happens that you can pay off the other liens and debts with a reverse mortgage.
Feel free to ask if you have further queries.
Sussane
Hi buddyhollyhjs,
When your parents go for a reverse mortgage, they'll have to pay down any outstanding debt on their property. Either they can pay off the home equity loan and then take out the reverse mortgage or else they can utilize the loan proceeds to pay down the equity loan.
To get an idea on how a reverse home loan works, take a look at the information available on reverse mortgage.
good luck
When your parents go for a reverse mortgage, they'll have to pay down any outstanding debt on their property. Either they can pay off the home equity loan and then take out the reverse mortgage or else they can utilize the loan proceeds to pay down the equity loan.
To get an idea on how a reverse home loan works, take a look at the information available on reverse mortgage.
good luck
sussane, it is not necessary for a home to free and clear of any liens prior to taking a reverse mortgage. a lender is going to require that all mortgages be paid in full with the proceeds of a reverse mortgage, and it will clearly affect how much is available to a borrower, but "free and clear" is not a requirement.
