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Could Mom and Dad use help with their mortgage?

January 12th, 2018 7:49 AM by Scott Fenner

Your parents could live the remainder of their years not paying a mortgage* and maybe even getting a monthly check as long as they live in their home.

 

Really?

 

Really.

 

Your parents may be eligible for an FHA Reverse Mortgage if they are 62 or older, meet financial requirements and have sufficient equity in their home. They will need to live in the home as their principal residence, maintain it, and pay taxes and insurance.

 

How It Works:

 

Proceeds from a reverse mortgage first pay off the current mortgage on the home, if applicable. Your parents can access additional funds through a lump sum payment, a line of credit or monthly installments. The amount available depends on the amount of equity they have in their home, settlement costs, interest rates, and their ages. In some cases, funds to pay taxes and insurance are set aside at closing or withheld from regular disbursements.

 

Points to Remember:

 

  • A reverse mortgage is a loan. Loan costs include interest, FHA Mortgage Insurance, and initial fees. It will come due when the last title holder of the property dies or when the title holder(s) sell or move from the home.
  • Because of FHA insurance, neither your parents nor their estate will be required to pay more than the value of the home at sale, even if the amount due is higher than the home’s value.
  • The home can stay in the family. Heirs will pay the amount owed or 95% of the home’s appraised value, whichever is less.
  • Your parents will speak with an independent HUD-certified housing counselor before formal application is made. You are encouraged to attend.

 

If you would like to discuss reverse mortgages for your loved ones, please give us a call. We’ll be happy to help.

 

*The homeowner is responsible for paying taxes and insurance and for properly maintaining the home. The home must be used as the homeowner’s primary residence.





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Posted by Scott Fenner on January 12th, 2018 7:49 AM

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