Can children be liable for a reverse mortgage of deceased parents? Should I get an insured reverse mortgage? How do I protect heirs from reverse mortgage?
When you receive a reverse mortgage you are receiving money from the equity of your home. At the time of your death your home will be sold to cover the expenses associated with the reverse mortgage. If the sale of the home does not cover the outstanding balance of the reverse mortgage, your children/heirs can be liable for the remaining amount due to the lender. Depending on the contract that you signed when you applied for the mortgage your heirs could be responsible for the remaining amount due immediately. If you are not sure that the sale of your home will cover your debt, you should apply for a federally insured reverse mortgage.
Should I get an insured reverse mortgage?
Having your reverse mortgage federally insured is always the safest route to take. A FHA/HUD backed reverse mortgage is the only way to actually guarantee that your children/heirs will not be burdened with any financial risk associated with the reverse mortgage. An insured reverse mortgage will cost a little more to begin with and there are fees associated with it each year. But there is also peace of mind that comes with those insurance premiums. In the event of your death and the subsequent selling of your home the sales price does not cover your reverse mortgage debt, the insurance policy will cover the remaining balance. Your heirs will not be required to pay anything.
How do I protect heirs from a reverse mortgage?
There are three ways to guarantee protection of your heirs from a reverse mortgage. First, carefully read any contract you sign and check for any possible clauses that may damage your heirs. Second, only take a loan out that is less than the equity available. This will help once the sale takes place. Third, go with a federally insured mortgage. The insurance policy will cover any lacking funds after the sale of your home.
Related posts:
- How Can Parents Prepare Their Children For Reverse Mortgages?
- Are Children Responsible For Their Parent’s Reverse Mortgage?
- If My Parents Die, How Am I Affected By Their Reverse Mortgage?
- Can My Children Inherit My Home With A Reverse Mortgage On It?
- Can My Family Owe On My Reverse Mortgage When I Die?
It seems odd that you can be held financially responsible for something in which you signed no contract or paperwork.
Need advice please, my mom just passed away (4/6/2010) own a Manufacture home (reverse mortgage), we (me / 62 & wife / 52) moved in since 10/2010 to take care of here, unfortunate she left without any message. I knew that she just move in since mid-2008.
question ,
just received the property taxes $ 1000 need to be paid, how I manage that? owner just pass away??
Can I stay here (in this house)? for how long ?
I paid all the utilities and otheer thing since 10/2009.
Need advice please, how can I stay here.