Reverse Mortgage Family Questions
Wherever you look, all you can see is additional expenses. In the rough economy of the past few years–with home values and retirement savings down, government benefit programs threatened and people living longer–many children of seniors are concerned about their parents being able to finance the remainder of their lives, even if they have been diligent about retirement planning. Reverse Mortgage Family Questions should all be answered here, if not contact me at (205) 908-2993 or email Scott@ReverseMortgageAlabama.com. How to use a Reverse Mortgage to pay for in home care.
We like for the adult children to be involved because today’s Reverse Mortgage is so much safer and flexible than the stories, they have heard that they learn about it and are not as worried. We love Family to be involved and to ask “Family Questions” to help them feel asked if there are making a very informed decision.
Today, most seniors have their wealth in their home equity. And if your parents are struggling to meet their month-to-month expenses or paying for health expenses, tapping into that equity may be the best solution. A reverse mortgage is a financial product that allows them to do just that. Determining if a reverse mortgage is the right financial option for your parents is a very personal decision and based on many factors. In most cases, your parents will discuss this option with you before making their decision. You want to be prepared to answer their questions or get involved and be on the phone with the counselor.
Here are some questions you most likely will want to be answered: What is a reverse mortgage? A reverse mortgage is a loan available to homeowners over 62 years of age that enables them to convert part of the equity in their home into cash. The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed. Instead of making monthly payments to a lender (as with a traditional mortgage), the lender makes payments to the borrower.
What do people use reverse mortgages for? Reverse mortgages were conceived as a financial tool to help people in or near retirement who have limited income use the money, they have put into their home to pay off debts (including traditional mortgages), cover basic monthly living expenses or pay for health care. There is no restriction on how a borrower may use their reverse mortgage proceeds.
Will a reverse mortgage increase my parents’ monthly expenses? No. Borrowers are not required to pay back the loan until the home is sold or otherwise vacated. While they live in the home, they are not required to make any monthly payments towards the loan balance, but they must remain current on tax and insurance payments.
If my parents take a reverse mortgage, does the bank then own their home? No. With a reverse mortgage, the borrower always retains title to or ownership of the home. The lender never, at any point, owns the home even after the last surviving spouse permanently vacates the property.
How much money can my parents expect? The amount of funds they are eligible for depends on the age of the youngest parent, the value of the home, the interest rate, and upfront costs. The older a person is, the more proceeds he or she can receive.
Funds can be delivered as a lump sum, as a line of credit or as fixed monthly payments, either for a specified period or for as long as your parents live in the home. They can also use more than one of these options, for example, take part of the proceeds as a lump sum and leave the balance in a line of credit.
How much will the loan cost my parents? Loan fees can be paid out of the loan proceeds. This means a borrower incurs little out-of-pocket expense to get a reverse mortgage. The only out-of-pocket expenses are the appraisal and possibly the counseling session which answers many questions by speaking with an unbiased counselor (depending on which counseling agency you work with), which together total a few hundred dollars.
When the loan is eventually paid off, the balance equals the amount borrowed, plus interest and mortgage insurance. The loan balance grows as the borrower continues to live in the home. In other words, when the borrower sells or leaves the house, he or she will owe more than originally borrowed. Look at it this way: A traditional mortgage is a balloon full of air that loses some air and gets smaller each time a payment is made. A reverse mortgage is an empty balloon that grows larger as time passes. With any questions, please call Scott Underwood-Alabamas Reverse Mortgage Guy since 2007. Offices in Birmingham and Huntsville offices and serving everyone in between! We are also licensed and work with our neighbors in Georgia, Mississippi & Tennessee.
Scott- Alabamas Reverse Mortgage Guy”.
Call (205) 908-2993
Toll-free (888) 220-0393
Email scott@ReverseMortgageAlabama.com
