Reverse mortgage info

[lisars]

What is the name of your state? PA
My Aunt and Uncle are on a very low fixed income and have come to my husband and I about the possibility of doing a reverse mortgage on their house and land. I've always been under the impression that they are only done between property owner and a lender. And the lender pays the owner a certain amount monthly based on property value. My Aunt has mentioned something along the lines of us paying their property and school taxes, and upon their deaths the property is ours. Whether that be ten months or ten years from now. Can that be constituted as a reverse mortgage? Can something like this actually be done? Or would we have to buy the house outright and they pay rent? They are very worried about what's going to happen. Taxes keep going up, but my Uncle's SS checks don't. And yes, they are both over 62. Also, if all of this is possible, would my husband and I be able to build on the property before they pass on? We don't want to live in their house, just make sure that they can continue to do so in the house they've lived in for the last 30+ years. Any input is greatly appreciated. Thanks, Lisa

 

[JETX]

A reverse mortgage is done by you PURCHASING their property in full. They then pay you rent for them living in your property. This gives them immediate cash (from the sale) and you get tax benefits and hopefully equity potential.

 

[lisars]

Thanks, I knew the solution would be more simple than I thought.

 

[HUD-1]

They should also look into a Reverse Mortgage from a lender. Both FNMA and FHA have good products. If they have a lot of equity in the property, they can take a line of credit or receive monthly payments. The home secures the advances. When they permanently move out of the house (or pass away) the house is sold and the debt paid off. www.hud.gov/groups/seniors.cfm has some good information.

 

[lisars]

She has said she would only want to go to a lender as a last resort. They paid off the mortgage at least ten years ago, so equity isn't really the problem. She said if we weren't able to work something out, they would probably have no choice but to go to a lender. Bad dealings with bankers have made them a little leery, so they wanted to "keep it in the family" if possible. But I will pass on the links to her. We just wanted to be able to help in some way.Thanks again.

 

[HomeGuru]

There are several ways to create a transaction to accomplish the goal.
Talk to a real estate attorney about options such as a life estate, an installment contract and a PMM.