Reverse Mortgages

[JerseyGrl]

My 80 year old mom’s house has 10 years of deferred repairs. My brother thinks its a good idea for her to get a reverse mortgage to fix the roof and garage, update the bathroom and clean up the basement. This is in the northeast and zillow shows homes in her neighborhood going for between 250-300K. The house really is in need of work. She will stay in her home as long as possible; she has a family member living with her so she’s not alone.

It looks like the upfront costs of this arrangement are pretty high. Does anyone have experience/knowledge with this type of financing? Thanks in advance for any advice or suggestions.

[bearishgurl]

Maybe a Pigg in the lending biz would know more but from what I know, they can be six points or more up front. There is a cap on the loan and some RE commission also built into the contract for the lender to unload them upon move out to relative/board and care or death. The cap is set lower than the lender thinks it’s worth at the time of making the loan so they will have $$ to unload it. Any remainder would go to the heirs.

It’s like an expensive open HELOC, whereby if your mom could just document some kind of “income,” she might be able to take out a modest HELOC for free (lender typically pays costs for a HELOC).

toots, can you or any of your siblings take turns going back there to perform repairs?? Perhaps you mom can pay for some inexpensive mat’ls or you all can split this cost. (She doesn’t *need* granite and Pella windows at this late date.)

If most of the work is just lumber, shingles, etc. and elbow grease, I would go back and help clean out and fix things for awhile or at least supervise a handyman or “Got Junk” crew if my mother was 80 (mine lived to be 59). This will preserve you and your sibling(s) inheritance. Otherwise, the reverse mortgage $$ may be squandered on unscrupulous “contractors” if your mom is not closely supervised.

If your mom is able to qualify for a “free” HELOC of say, $5-$25K (for mat’ls), either you or another sibling must set it up so that this lender is paid at least the miminum payment by the due date EVERY MONTH. Otherwise you could be “asleep at the switch” living in another state and an NOD/NOS (or whatever they call it back there) will be posted on the door and your mom may not even know what it is.

IMHO, the best thing to do in this case is get with your siblings and eyeball the mat’ls/repairs needed and see if you can pool some $$ together to make this happen. And then sit down with your mom and tell her what you are doing and make sure she has a will and/or trust that has been reviewed by a lawyer and gives you each a copy. She is “80,” after all.

In your case, I think I would veto a reverse mtg. if it’s just for repairs and she doesn’t need the $$ to live off of.

[bearishgurl]

Maybe a Pigg in the lending biz would know more but from what I know, they can be six points or more up front. There is a cap on the loan and some RE commission also built into the contract for the lender to unload them upon move out to relative/board and care or death. The cap is set lower than the lender thinks it’s worth at the time of making the loan so they will have $$ to unload it. Any remainder would go to the heirs.

It’s like an expensive open HELOC, whereby if your mom could just document some kind of “income,” she might be able to take out a modest HELOC for free (lender typically pays costs for a HELOC).

toots, can you or any of your siblings take turns going back there to perform repairs?? Perhaps you mom can pay for some inexpensive mat’ls or you all can split this cost. (She doesn’t *need* granite and Pella windows at this late date.)

If most of the work is just lumber, shingles, etc. and elbow grease, I would go back and help clean out and fix things for awhile or at least supervise a handyman or “Got Junk” crew if my mother was 80 (mine lived to be 59). This will preserve you and your sibling(s) inheritance. Otherwise, the reverse mortgage $$ may be squandered on unscrupulous “contractors” if your mom is not closely supervised.

If your mom is able to qualify for a “free” HELOC of say, $5-$25K (for mat’ls), either you or another sibling must set it up so that this lender is paid at least the miminum payment by the due date EVERY MONTH. Otherwise you could be “asleep at the switch” living in another state and an NOD/NOS (or whatever they call it back there) will be posted on the door and your mom may not even know what it is.

IMHO, the best thing to do in this case is get with your siblings and eyeball the mat’ls/repairs needed and see if you can pool some $$ together to make this happen. And then sit down with your mom and tell her what you are doing and make sure she has a will and/or trust that has been reviewed by a lawyer and gives you each a copy. She is “80,” after all.

In your case, I think I would veto a reverse mtg. if it’s just for repairs and she doesn’t need the $$ to live off of.

[bearishgurl]

Maybe a Pigg in the lending biz would know more but from what I know, they can be six points or more up front. There is a cap on the loan and some RE commission also built into the contract for the lender to unload them upon move out to relative/board and care or death. The cap is set lower than the lender thinks it’s worth at the time of making the loan so they will have $$ to unload it. Any remainder would go to the heirs.

It’s like an expensive open HELOC, whereby if your mom could just document some kind of “income,” she might be able to take out a modest HELOC for free (lender typically pays costs for a HELOC).

toots, can you or any of your siblings take turns going back there to perform repairs?? Perhaps you mom can pay for some inexpensive mat’ls or you all can split this cost. (She doesn’t *need* granite and Pella windows at this late date.)

If most of the work is just lumber, shingles, etc. and elbow grease, I would go back and help clean out and fix things for awhile or at least supervise a handyman or “Got Junk” crew if my mother was 80 (mine lived to be 59). This will preserve you and your sibling(s) inheritance. Otherwise, the reverse mortgage $$ may be squandered on unscrupulous “contractors” if your mom is not closely supervised.

If your mom is able to qualify for a “free” HELOC of say, $5-$25K (for mat’ls), either you or another sibling must set it up so that this lender is paid at least the miminum payment by the due date EVERY MONTH. Otherwise you could be “asleep at the switch” living in another state and an NOD/NOS (or whatever they call it back there) will be posted on the door and your mom may not even know what it is.

IMHO, the best thing to do in this case is get with your siblings and eyeball the mat’ls/repairs needed and see if you can pool some $$ together to make this happen. And then sit down with your mom and tell her what you are doing and make sure she has a will and/or trust that has been reviewed by a lawyer and gives you each a copy. She is “80,” after all.

In your case, I think I would veto a reverse mtg. if it’s just for repairs and she doesn’t need the $$ to live off of.

[bearishgurl]

Maybe a Pigg in the lending biz would know more but from what I know, they can be six points or more up front. There is a cap on the loan and some RE commission also built into the contract for the lender to unload them upon move out to relative/board and care or death. The cap is set lower than the lender thinks it’s worth at the time of making the loan so they will have $$ to unload it. Any remainder would go to the heirs.

It’s like an expensive open HELOC, whereby if your mom could just document some kind of “income,” she might be able to take out a modest HELOC for free (lender typically pays costs for a HELOC).

toots, can you or any of your siblings take turns going back there to perform repairs?? Perhaps you mom can pay for some inexpensive mat’ls or you all can split this cost. (She doesn’t *need* granite and Pella windows at this late date.)

If most of the work is just lumber, shingles, etc. and elbow grease, I would go back and help clean out and fix things for awhile or at least supervise a handyman or “Got Junk” crew if my mother was 80 (mine lived to be 59). This will preserve you and your sibling(s) inheritance. Otherwise, the reverse mortgage $$ may be squandered on unscrupulous “contractors” if your mom is not closely supervised.

If your mom is able to qualify for a “free” HELOC of say, $5-$25K (for mat’ls), either you or another sibling must set it up so that this lender is paid at least the miminum payment by the due date EVERY MONTH. Otherwise you could be “asleep at the switch” living in another state and an NOD/NOS (or whatever they call it back there) will be posted on the door and your mom may not even know what it is.

IMHO, the best thing to do in this case is get with your siblings and eyeball the mat’ls/repairs needed and see if you can pool some $$ together to make this happen. And then sit down with your mom and tell her what you are doing and make sure she has a will and/or trust that has been reviewed by a lawyer and gives you each a copy. She is “80,” after all.

In your case, I think I would veto a reverse mtg. if it’s just for repairs and she doesn’t need the $$ to live off of.

[bearishgurl]

Maybe a Pigg in the lending biz would know more but from what I know, they can be six points or more up front. There is a cap on the loan and some RE commission also built into the contract for the lender to unload them upon move out to relative/board and care or death. The cap is set lower than the lender thinks it’s worth at the time of making the loan so they will have $$ to unload it. Any remainder would go to the heirs.

It’s like an expensive open HELOC, whereby if your mom could just document some kind of “income,” she might be able to take out a modest HELOC for free (lender typically pays costs for a HELOC).

toots, can you or any of your siblings take turns going back there to perform repairs?? Perhaps you mom can pay for some inexpensive mat’ls or you all can split this cost. (She doesn’t *need* granite and Pella windows at this late date.)

If most of the work is just lumber, shingles, etc. and elbow grease, I would go back and help clean out and fix things for awhile or at least supervise a handyman or “Got Junk” crew if my mother was 80 (mine lived to be 59). This will preserve you and your sibling(s) inheritance. Otherwise, the reverse mortgage $$ may be squandered on unscrupulous “contractors” if your mom is not closely supervised.

If your mom is able to qualify for a “free” HELOC of say, $5-$25K (for mat’ls), either you or another sibling must set it up so that this lender is paid at least the miminum payment by the due date EVERY MONTH. Otherwise you could be “asleep at the switch” living in another state and an NOD/NOS (or whatever they call it back there) will be posted on the door and your mom may not even know what it is.

IMHO, the best thing to do in this case is get with your siblings and eyeball the mat’ls/repairs needed and see if you can pool some $$ together to make this happen. And then sit down with your mom and tell her what you are doing and make sure she has a will and/or trust that has been reviewed by a lawyer and gives you each a copy. She is “80,” after all.

In your case, I think I would veto a reverse mtg. if it’s just for repairs and she doesn’t need the $$ to live off of.

[CA renter]

Good advice, BG.

[CA renter]

Good advice, BG.

[CA renter]

Good advice, BG.

[CA renter]

Good advice, BG.

[CA renter]

Good advice, BG.

[Rich Toscano]

Not a mortgage expert but as far as I know, HELOCs are always variable while some reverse mortgages are fixed. This is a huge difference IMHO as the latter protect you from the risk of increasing interest rates.

[Rich Toscano]

Not a mortgage expert but as far as I know, HELOCs are always variable while some reverse mortgages are fixed. This is a huge difference IMHO as the latter protect you from the risk of increasing interest rates.

[Rich Toscano]

Not a mortgage expert but as far as I know, HELOCs are always variable while some reverse mortgages are fixed. This is a huge difference IMHO as the latter protect you from the risk of increasing interest rates.

[Rich Toscano]

Not a mortgage expert but as far as I know, HELOCs are always variable while some reverse mortgages are fixed. This is a huge difference IMHO as the latter protect you from the risk of increasing interest rates.

[Author]

Posts