Need to selling house with reverse mortgage lien our real estate closing attorney will take care the paperwork for us. We buy houses As-Is near you for cash! A reverse mortgage is really very simply just another debt or lien that’s on the property. Typically what we will do when we have a situation like that is the homeowner will typically know approximately the amount of debt that is owed with the reverse mortgage, but what we can simply do is once we have an agreement in place we can have the title company contact the lender to get a full pay off, which is typically different than just a balance due because of course interest is accruing every day. So the title company will take care of getting the exact amount of the payoff to the day of closing and then just pay the lender off just as we would, or just as they would, on a normal loan or lien against the property.
It’s a very simple, straightforward process. Yes, we certainly can buy houses with reverse mortgages on. The only time that would be different is if that debt has climbed to the point where the value of the house is less than the amount of debt that’s on the house. Again, just like a regular lien, if there’s too much debt on the house, then we’re limited on what we can do for a homeowner or home seller.
But to start the process, if you have a reverse mortgage and you are considering selling a house, certainly give us a call. We can certainly provide the same benefits that we would in any other circumstance, in that we would buy the house as is. The home seller does not need to do any updating, any improvements. If you have stuff in the house that has accumulated over the years and you don’t care about, sell the stuff you want to sell, take and move the things you want to take, and anything that’s left in the house just leave it and we will take care of it. Typically we will wire funds in to the title company when we close. The title company will pay off that underlying debt, whether it’s a regular loan or a reverse mortgage, and the transaction goes just as it would any other time.
To check us out, if you have more questions Contact us and we’d be happy to help you in any way that we can. Thank you very much.
We Buy Houses AS IS near you like:
Condo, Townhomes, single family residential, duplex, 3plex or triplex, 4plex or fourplex multifamily unit apartment you can sell your raw land to us ASAP by call us or fillout our form at https://boracina.com/discovery/
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What is a Reverse Mortgage and How Does It Work? Understanding the pros and cons of HECM!
selling house with reverse mortgage short sale
How to get out of a reverse mortgage?
What Happens to Reverse Mortgage When You Die | Reverse Mortgage After Owner Dies
I’m a certified aging and place specialist. Today, let’s answer the question. What happens when I die and I have a reverse mortgage. The home equity conversion mortgage that we commonly call a reverse mortgage has only one payment during the life of the loan, and that is due when the borrower no longer lives in the home. Often that’s when the homeowner dies or if a couple, when the last surviving spouse dies. Both the principal and accrued interest are collected at that time. You may know that a reverse mortgage is like any other mortgage in that the title to the home stays in the homeowner’s name. The bank has a trust deed for security just as with other mortgage loans.
reverse mortgage problems for heirs
Upon the death of the homeowner, the title to the home would pass to their heirs. Of course, the loan is attached to the property, and at that time the loan would become do. The heirs have the choice of what to do with the home. They may sell and keep the proceeds or pay off the loan from savings, inheritance or by refinancing and keeping the property. Normally the property is more valuable than the amount of the loan and often the heirs wish to selling reverse mortgage home the property and have the cash. The government agency that regulates reverse mortgages, the Department of Housing and Urban Development or HUD, realize that to pay off the loan immediately might force the heirs to sell the home quickly and lose money, so they allowed the heirs more time to settle the debt. The heirs have up to one year with HUD approval to finally settle the payoff while they attempt to sell the property and get a fair price.
There are times when the real estate market has downturns and home values declined significantly. This is when the property may be financially underwater, where the loan balance is greater than the property value. We’ve seen this for both traditional mortgages and reverse mortgages during the 2007 housing crisis. The graph here shows the national averages. Some areas went down even more, but here too, the heirs have choices. The first thing to know is that a reverse mortgage is a nonrecourse loan, that means the home stands alone for the debt. Therefore heirs will never be forced to pay. If the home is financially underwater. The heirs still have two choices even in this situation, of course, they can just turn the property over to the bank and walk away.
how long do you have to sell a house with a reverse mortgage
But what if there was something special about the home and they wanted to keep it? Here again, HUD, that this may be the case for some families and they made a special provision for that. There’s a rule that allows heirs to satisfy the loan and keep the property by paying just 95% of the current market value. To illustrate this, let’s take a home owner living in Riverside County, California. In 2006, she got a reverse mortgage to pay off her existing mortgage. At that time, her home was valued at $300,000 then she lived comfortably without those mortgage payments for the next five years. In 2011 she became ill and passed away. Well, the 2007 housing crisis hit Riverside County pretty hard. The home values went down 60%. When her kids inherited her home, it was only worth $120,000. Now they could walk away if they wanted, but they loved the place and they were comfortable there. They wanted to keep it all they had to pay to satisfy the loan was $114,000, that’s 95% of the current market price. They arranged financing and with a $22,800 down payment, they were able to keep their mom’s home.
Reverse mortgages really can help people have a comfortable, secure place to live for the rest of their life. If the heirs know their rights, they can have happy endings too. Just to note here, I strongly recommend for my California clients to see an attorney about a living trust and other estate planning documents, so their property will easily go to their heirs exactly the way they want it to and save costly probate charges.
Now, if you feel this information was useful, you may be interested in seeing my other videos on my YouTube channel or my website. Here’s a partial list of titles.
A reverse mortgage when used properly, can provide you with a secure place to live for the rest of your life. All you have to do is keep up the taxes, insurance, and keep your home in livable condition just as you have to do now with or without a mortgage. But just as with other financial products, if you’s wrong, it can be devastating. That’s why I stress, you should not get financial products like investments, insurance, or mortgage loans on the internet or over the phone from a salesperson on an 800 number call center. Make sure you know the qualified professional you’re dealing with, where they’re located, how to contact them after the loan closes, and know that they’re dedicated to doing what’s in your best interest. That should include telling you not to get reverse mortgage if it’s not right for you. For more information about reverse mortgages, you may see my website, charlesguinn.com or call me and ask your questions. I’m happy to talk with you. Thanks for watching.
Selling a Home that’s encumbered by a Reverse Mortgage
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