Before you obtain reverse mortgage quotes for your parents, you should ask these important questions:
When my parents die or move, and the balance is of the home’s value, am I responsible?
No matter how big the balance of the loan, your parents never will need to pay more than the appraised home’s value or sale price. The feature is called non-recourse. If a loan balance goes over the appraised home’s value, the federal government will absorb the loss. The government will pay for it with proceeds from their insurance fund the borrower pays into on a month-to-month basis.
If my parents receive a reverse mortgage, what will their responsibilities be?
Primary lien: Reverse mortgages have to be the main lien on a home. All previous mortgages have to be fully paid to receive the reverse mortgage.
Occupancy requirements: The home utilized as collateral for reverse mortgages have to be your parents’ main residence.
Insurance and Taxes: Your parents will be required to stay current on their home insurance, real estate taxes, and if applicable, condominium charges, or they’re prone to default.
Property Condition: Your parents will be responsible for completing all mandatory repairs and sustaining the property’s condition.
Rights of a Non-Borrower Resident during Termination of Loan Time: If there’s a non-borrower resident residing in the house but who isn’t on title, it is vital that they know what occurs as an owner on the title permanently vacates the home, by either death or moving out, and a loan becomes payable and due. It is critical that those factors be discussed with your loan officer before the closing of the loan. In the instance of a couple, if a spouse is under 62 years of age, it might be possible for that individual to continue living in the house after the older spouse dies, as long as specific conditions are met.
Before getting reverse mortgage quotes, keep this in mind: If a disabled daughter or son is residing at home, and their parents receive a reverse mortgage, the daughter or son might need to search for alternative housing choices as the loan becomes payable and due, unless other arrangements have been made in advance to pay off the reverse mortgage.
For more information on our reverse mortgage quotes, contact Longbridge Financial today.