As home value rises who is entitled to the money in a reverse mortgage? Who keeps any profits from the sale of my home? Can I get a 2nd reverse mortgage?
Over time, and in a good market, the value of your home will increase. If you have a reverse mortgage on your home this does not mean that your credit line will increase. Your equity amount was determined at the time of the closing on the mortgage. Increases in home value will not automatically be given to the borrower. At the time of the sale of your home you, or your estate, will receive any extra money generated from the sale.
Who keeps any profits from the sale of my home?
When your home is sold to cover a reverse mortgage debt the lender only keeps the amount due. This amount would be the amount that had been borrowed and any interest on that amount. All extra monies will be given to the homeowner or their heirs when the debt is paid off. Contrary to popular belief, the lenders will not keep any extra money made on the sale. That is fraud, and fraud is against the law. Lenders will not risk their business on this type of activity.
Can I get a 2nd reverse mortgage?
A homeowner can only have one reverse mortgage on their main residence at a time. If your home has increased significantly in value, you may consider refinancing the reverse mortgage. Because obtaining a reverse mortgage is very expensive, the increase in value would need to be very high to make it worth while. If you are considering this option you should contact a credit counselor and discuss your options. Most of the time it is not in the borrowers best interest to refinance a reverse mortgage.
Related posts:
- How much am I entitled to receive through a reverse mortgage?
- How Can I Get Extra Money With A Reverse Mortgage?
- Does The IRS Consider The Money From A Reverse Mortgage Income?
- Does The Money From A Reverse Mortgage Affect Medicare, Social Security, or Pension Benefits?
- Do I Have To Use The Reverse Mortgage Money Right Away?