Reverse Mortgage and the Children of Seniors

As the child of a senior who is considering taking out a Reverse Mortgage, it helps for you to understand how their decision can impact their lives, the future of their home and ultimately, their heirs.

Many seniors, age 62 or older, are in a position with their current home equity to consider utilizing the advantages a Reverse Mortgage program can offer. Some of these benefits include increasing their monthly income, paying off debt or helping family members with purchases they need.

The HEMC Reverse Mortgage program is a federally-insured loan. It has safeguards built into it to protect seniors, such as a required counseling session that ensures they are aware of all their options and are fully aware of the guidelines and processes involved in a Reverse Mortgage.

The funds receive from the loan is tax free and the borrower will not owe any payments on the loan until a future time. The loan will become due to the lender when the last remaining person on the deed is no longer living in the home. As the heir, you have the option of selling the home to repay the loan or taking out a traditional mortgage and keeping it. The remaining home equity is preserved for heirs to inherit (depending on how long the borrower paricipates in the program). When the loan balance is repaid, the remaining equity stays with your estate and can thus, be passed onto the living heirs.

The title stays in the homeowners name and there is no risk of losing it to the lender. Additionally, with all the varying factors in the housing market today, it does not matter when the home is sold—your parent(s) will never owe more than the value of the home when it is sold. If the balance due on the home is more than what it sells for, no one has to pay the difference. If the home sells for more than the loan balance, the extra money goes to the estate.

Call or us today and one of our Mortgage Specialists will answer any questions you may have about this program.