This week I received a call from a very frustrated woman who was trying to help her elderly sister and brother-in-law understand the reverse mortgage that is currently on their home.
Irene, the woman who called, was at her wits end. She has been working with her sister, the estate planning attorneys and the banks since January trying to get answers on how all of this works.
Irene’s sister is adamant that she wants to leave an inheritance to the people she loves and cares about. Those same people only want her and her husband to be taken care of in their elderly age.
Irene’s brother in law was placed in an assisted living facility last year. Her sister still lives in the home where they have had a reverse mortgage in place for several years. The couple has over $100,000 in annuities. Irene’s sister is very worried that when both she and her husband pass away that the bank will come after the annuities.
I was able to answer Irene’s questions and put her mind at ease. The great news about a reverse mortgage is that the loan is insured with mortgage insurance. This mortgage insurance protects the homeowner and homeowner’s estate from owing more than the home is worth. When Irene’s sister either moves out of the home or passes away, one of two things will happen:
- If the house is worth more than the balance of the reverse mortgage loan, they can sell the home and the heirs will receive the difference.
- If the house is upside-down and they owe more than the home is worth, they can call the bank and turn it back over to them.
A reveres mortgage is a non-recourse loan, meaning that the bank can never make the homeowner or heirs owe more than the home is worth.
For questions about a reverse mortgage, please contact me directly at 559.994.3692 or 800-779-1851.
Comments(4)