From: "Lisa K.V. Perry" <lisakvperry AT gmail.com>
To: homestead AT lists.ibiblio.org
Subject: Re: [Homestead] reverse mortgages
Date: Tue, 11 Nov 2008 17:44:34 -0500
On Tue, Nov 11, 2008 at 4:18 PM, EarthNSky <erthnsky AT bellsouth.net> wrote:
> I know Lisa and others have mortgage experience. I keep seeing those
> ads for a reverse mortgage. How exactly does that work and what is the
> downside? Bank gets the property when you die, right?
>
You have to be minimum age 62. This was a niche market that I thought about
becoming an expert on had I stayed in the business, but I did not. Maybe
down the road I'll get back in it and only do reverse mortgages, who knows.
Found a couple sites to answer your questions, but if you're thinking for
you in particular, you and Ron are too young.
You must own your home, and generally all of the owners must be at least
62 years old.
-
>
> If you have any debt against your home, you must either pay it off *
> before* getting a reverse mortgage or - this is what most borrowers do
> - use an immediate cash advance *from* the reverse mortgage to pay it
> off. If you don't pay off the debt beforehand, or do not qualify for a
> large
> enough immediate cash advance to do so, you cannot get a reverse
> mortgage.
>
> *When do you pay it back?*
>
> - When the last surviving borrower dies, sells the home, or permanently
> moves away. "Permanently" generally means you have not lived in your home
> for 12 months in a row.
>
>
> - You might also have to pay it back if you fail to pay your property
> taxes, fail to keep up your homeowner's insurance, or let your home go to
> waste. But if you do, the lender may be able to make extra cash advances
> to
> cover these expenses.
>
> Just remember, reverse mortgage borrowers are still homeowners and
> therefore are still responsible for taxes, insurance, and upkeep.
>
>http://www.reverse.org/faqs.htm