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Reverse Mortgage

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tigger22472

Senior Member
What is the name of your state? Indiana

Looking for some insight on this subject and see if I understand it correctly.

My cousin has suggested that my grandparents get a reverse mortgage and said that the bank would in turn give them money each month and after their deaths and the home is sold that the money they received from the bank would go back and then the profits split between the children. Is this correct?

My grandparents live on a limited budget and are having to borrow from next month to pay for this month and into their savings every month. It is unlikely that they would live another 20 years and after they pass their home would have to be sold anyways as there are too many hands involved. If it is as I understand it I agree with my cousin. We would rather our grandparents live comfortably now then worry about what inheritance we would get later. There are 5 kids involved and at least 3 would agree to this also.
 


U

Ummonx

Member
This is more a finance question.

They work, I can't tell you they dont. And to tell you the truth there is nothing wrong with taking the equity out of your home. The question is, what happens if they outlive the reverse mortgage. Now they are homeless.

If they are open to moving, it might be a beter idea to have them sell the house, buy a smaller/cheaper place and invest the rest into something that will pay them income. I would see a financial adviser to see what options are open
 
M

Milena

Guest
If they have life insurance, I believe they can sell it in a life settlement and leave their home alone.
 
T

tigger22472

Senior Member
They are both nearly 80 years old and had major health problems in the last year. The odds of them living another 20 years is slim and even if they did there's no way that at nearly 100 they would be able to live alone especially the way things are now. I hate saying that but it's reality and like I said, we would rather them live comfortably now. They wouldn't even think of selling their home now or even moving now. They are too independent minded however, my cousin and I thought if the majority of the family sat down with them they would be more apt to do this.
 
T

tigger22472

Senior Member
If I read that site correctly they can't take the home from them or force them to move because they wouldn't have to repay it until the second one either moved or died and the house was sold and they can not owe more then the house is valued at. It does sound like a good deal. Thanks again Jetx.
 
R

rainmand

Member
They'll be able to receive a monthly payment for the rest of their lives and you don't have to worry about them being forced out of their home, loosing their home or ending up owing more than the house if worth. The Lender must absorb the loss if the home's value falls below the amount owed on the Reverse Mortgage (actually, an insurance policy protects the Lender in case this happens).

The best site I've seen on the subject is www.reverse.org.
 
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