Senior Reverse Mortgage

Reverse mortgages are loans that can affect the whole family.  These loans often impact borrowers’ estates, thus reducing their heirs’ future inheritances. Prior to getting a reverse mortgage, most families have several important questions. To answer some of your family’s questions, consult these three reverse mortgage facts for families.

Taking a Reverse Mortgage Will Not Necessarily Eliminate Your Children’s Inheritance

While researching reverse mortgage facts for families, many people are very interested in discovering how a reverse mortgage will affect their future estate. In most cases, reverse mortgages are repaid through the sale of the borrowers’ home. This means that instead of leaving the home to one’s children, the home will be sold and the profits will go to the lender.

However, this doesn’t have to be the case. If the home is worth more than the borrowers’ loan balance, their heirs will receive the remaining funds. The borrowers’ heirs can also repay the balance themselves, refinance the loan, or repay the reverse mortgage with a conventional mortgage loan. The bottom line is if your children want to inherit the family home, they will have
several options to ensure that happens.

Reverse Mortgages Are Non-Recourse Loans

Because a reverse mortgage is a non-recourse loan, borrowers’ owed balance cannot exceed more than their home is worth. In the event that the balance does exceed the home value, the difference will be forgiven once the home is sold to repay the loan. Getting a reverse mortgage will never leave your heirs with a financial burden.

Your Family Members Will Not Be Responsible for Selling Your Home to Repay the Loan

Selling a home is a detailed and often stressful process. Most parents would rather not leave their children with this responsibility after
their passing. Fortunately, your heirs will not be responsible for selling your home to repay your reverse mortgage. Upon your death, the house can be turned over to your lender.

However, if the home is worth more than the balance of your loan, your heirs can choose to sell the home and keep the additional funds. If your children choose this path, they will be given ample time to sell the home, assuming that they are making a reasonable effort to do so.

Hopefully these reverse mortgage facts for families have answered some of your loved one’s questions. For additional assistance, call us at 877-267-0274, and one of our loan specialists will be happy to answer any remaining questions you may have.