Nope! Reverse mortgages are non-recourse loans. This means that neither you nor your parents will have to pay more than the loan balance or the appraised value of the home at the time the home is sold and the loan is repaid, whichever is less.
A reverse mortgage loan becomes due and payable after your death and after the death of any coborrowers or of an eligible nonborrowing spouse. Once your heirs receive a due and payable notice from the lender, they have 30 days to buy, sell, or turn the home over to the lender to satisfy the debt.
A reverse mortgage usually must be repaid when the borrower moves out for 12 consecutive months or more, such as into a nursing home or other care facility. If the borrower is married, their spouse can remain in the home under certain conditions.
No, so long as you are not a borrower or guarantor, you have absolutely no personal liability for the mortgage debt of your parents.
Your mother or father may have had substantial credit card debt, a mortgage, or cr loan. The short answer to the question is no, you will not be personally responsible for the debt, but failure to pay such a debt can affect the use and control of secured assets like real estate and vehicles.
Filial responsibility laws, also known as filial support laws, are legal statutes that require adult children to financially support their parents if they are unable to do so themselves. In California, these laws are outlined in Family Code Section 4400.
If your reverse mortgage loan is in default and you've received a notice that the loan is “due and payable,” you may sell your home for 95 percent of its appraised value.
A reverse mortgage may be a good idea if:
You and your spouse/partner are both 62 or older. You are in a strong financial position. You are able to physically maintain your home.
The problem, say advocates, is that many senior homeowners don't understand the fine print in a reverse mortgage. Some wrongly assume the lender will pay the taxes and insurance. But fall behind on those payments or fail to maintain the home, and the lender can foreclose.
Selling a house with a reverse mortgage isn't as simple as selling a home with a traditional mortgage — but it can be done with a little planning. With a reverse mortgage, you borrow against the equity in your property to receive cash upfront or a stream of monthly payments.
The right to potentially assume (take over) the mortgage.
All successors in California have a right to apply for an assumption of the loan, as long as the loan is assumable. The servicer may evaluate your creditworthiness, including your credit scores, when considering you for an assumption.
Reverse mortgage loans typically must be repaid, usually by selling the home, when the last borrower dies. However, non-borrowing spouses may be able to stay in the home if they meet certain criteria.
Under reverse mortgages and traditional home mortgages, a property will serve as collateral when a borrower violates their end of the loan agreement. Only in this situation can a reverse mortgage company or bank take your home.
Though a reverse mortgage has no specific term, with a term reverse payout, the borrower will receive equal monthly payouts ending at a predetermined stop date. If the borrower lives longer than the agreed-upon term, they will outlive their available funds.
The state may file a TEFRA lien against one's home if it is believed that their stay in a nursing home is permanent. With a lien, a legal claim is made against the home to collect debt. This does not mean that the home must immediately be sold.
The nursing home must have a system that ensures full accounting for your funds and can't combine your funds with the nursing home's funds. The nursing home must protect your funds from any loss by providing an acceptable protection, such as buying a surety bond.
An adult child who inherits a home that has a reverse mortgage would need to pay off the balance to keep the home, though they're not legally obligated to do so.
The 60% Utilization Rule
Home equity conversion mortgage HECM borrowers may only take the greater of 60% of their total available equity or the total amount of their mandatory obligations plus 10% in the first payout.
The borrower cannot outlive a reverse mortgage. Implications that a reverse mortgage is not a loan, but instead a government benefit or entitlement.
If you have existing unpaid medical bills, and go into a nursing home and receive Medicaid, the program may allow you to use some or all of your current monthly income to pay the old bills, rather than just to be paid over to the nursing home, providing you still owe these old medical bills and you meet a few other ...
If you have no money, Medicaid is often the primary option for covering nursing home costs. Other potential solutions include: Veterans Benefits: Veterans and their spouses may qualify for financial assistance. Reverse Mortgages: Seniors who own their homes may use a reverse mortgage to cover nursing home expenses.
The states that have such laws on the books are Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, ...