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Reverse Mortgage |
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I have several questions regarding reverse mortgages. If my parents choose to go that route, and decide later they want to move, will they lose all of the equity they have in their long paid for home? If they die, will the children be somehow responsibile for making payments? Neither I nor my children who are the sole heirs, want the house, particularly |
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If your parents go for a reverse mortgage, a gradual debt builds up against their home, with interest. It starts with their closing costs, then grows as they're sent money. Whether it uses up all their equity depends on how much they've borrowed at the time it must be paid back -- when they die or move out.
You would never have any liability. With the most common program, HUD's Home Equity Conversion mortgage, if the house can't be sold for enough to pay off the loan, FHA insurance takes care of the rest.
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Edith
Originally published on March 6, 2008 |
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