Q: My grandparents are thinking about getting a reverse mortgage. Is it true they can lose their home after getting a reverse mortgage? Helen, Bridgewater, NJ A: The simple answer to your question is yes. If at any point during the loan period a reverse mortgage holder becomes delinquent on property taxes, homeowner’s insurance or HOA fees it could result in a default that could trigger a foreclosure action against the reverse mortgage holder. In addition, since one of the terms of a reverse mortgage is that the homeowner is required to live inside the home as their principal residence for most of the year, if the reverse mortgage holder spends the majority of the year living outside the property […]
continue reading Q: Gerald, you previously mentioned some of the disadvantages of reverse mortgages, are there any advantages? Hillary, Washington D.C. A: A reverse mortgage is a special type of home equity loan sold to homeowners aged 62 and older. Here are 3 advantages of reverse mortgages: It takes part of the equity in your home and converts it into cash payments The money you get is usually tax-free and generally won’t affect your Social Security or Medicare benefits. The loan doesn’t have to be repaid until you or your spouse sells the home, moves out, or dies. Here are 3 disadvantages of reverse mortgages: When you get a reverse mortgage, you don’t receive the full value of loan Higher-than-average closing costs, […]
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