A lot of reverse mortgage questions come from sons and daughters, not the homeowner. If you are trying to figure out whether this makes sense for Mom or Dad, you are in the right place.
Questions families usually ask
- Can my parent stay in the house for the rest of their life?
- What happens to the house when they pass away?
- Will we owe money if the loan is more than the house is worth?
- Is this a scam? Why does it get a bad reputation?
- Would downsizing or a home equity loan be better?
Steve answers all of these plainly, and he is happy to have you on the call with your parent.
What happens to the house
Your parent keeps the title. When the last borrower passes away or moves out for good, the loan comes due. The family can sell the home and keep whatever equity is left, or pay off the loan and keep the house. With an FHA-insured HECM, heirs generally will not owe more than the home is worth.
Why bring family in early
- Everyone hears the same facts at the same time
- Heirs understand the plan for the home before anything happens
- Your parent has someone to help track taxes, insurance and paperwork after closing
The required HUD-approved counseling session is also a good time for family to listen in and ask questions.
Talk to a real person in Kansas City
Steve Clune is a licensed loan officer for Kansas and Missouri. Call or text with your questions. If you miss him, send a text and he’ll get back to you.