Reverse Mortgage

Can a Reverse Mortgage be “Reversed?”

Published on: December 23, 2019 | By McCulloch & Miller, PLLC

There are many rules about reverse mortgages, including what happens at the end of the mortgage. What if the children decide they want to undo the reverse mortgage and buy out their parents, so the home can be kept in the family?

Let’s start by understanding what a reverse mortgage is, and how it works. This is a way for seniors to tap the equity in their homes. It’s usually done to generate cash, sometimes to pay for care and other times to supplement retirement accounts. However, the rules are a bit complex, says nj.com’s recent article, “Can we undo a reverse mortgage to keep the home?”

One of many common misconceptions about reverse mortgages is that the bank owns the home.

Should a Reverse Mortgage Be Part of My Retirement Plan?

Published on: June 5, 2019 | By McCulloch & Miller, PLLC

If you’ve got a fair amount of equity in your home and no other way to cover a healthcare cost or if the bills are coming in faster than your retirement accounts can manage, it might be time to consider a reverse mortgage.

For retirees in a financial tight spot, a home equity line of credit or borrowing against an existing home equity line of credit can provide a short-term solution. If you are at least 62 with a home that is not heavily mortgaged, a reverse mortgage is another option.

A revere mortgage gives you tax-free cash. No repayments are due, until you die or move out of the house.

Reverse Mortgages: Know Potential Pitfalls

Published on: July 10, 2015 | By McCulloch & Miller, PLLC

Caution is urged when considering a reverse mortgage as a solution to financial problems during retirement years. Television commercials targeting seniors leave out most of the unpleasant parts of a reverse mortgage. Rates and fees are extremely high and the homeowner is still responsible to pay property taxes, insurance and upkeep. It’s important to understand the positive and negatives before signing on the dotted line.

The Better Business Bureau receives a lot of complaints about reverse mortgages. As these complaints show, there are problems and issues with reverse mortgages, and they also illustrate that more than a few consumers are confused when they sign up.

A recent article in The (Appleton WI) Post Crescent, titled “Be cautious before taking on reverse mortgage,” says that some consumers don't know that a reverse mortgage is a loan that leverages their home’s equity. It's actually one of the most expensive forms of credit a person can get, with its origination fees, interest charges, and insurance premiums topping those of most other types of loans. Typically, a reverse mortgage origination fee can be up to $6,000 and the initial premium for federal insurance is set at 2% of the home’s value.

Reverse Mortgage Schmortgage … Look at Other Options in Houston

Published on: November 10, 2014 | By McCulloch & Miller, PLLC

Home equity loans can be problematic if not done correctly and require careful attention to the rights of the surviving spouse, if you are married. And of course, the end of the process means you or your heirs give up your home. There are other ways to tap into your home’s equity that are worth considering. Here, we take a quick look at the top alternatives to reverse mortgages.

Is a reverse mortgage really the answer to your cash-flow needs? It all depends on your situation and the options at hand.

A recent Investopedia article, titled "5 Top Alternatives To A Reverse Mortgage," examines some of the top alternatives to reverse mortgages.

Houston Home Owners: Make Note of New Reverse Mortgage Rules

Published on: September 19, 2014 | By McCulloch & Miller, PLLC

In a decision issued September 30, 2013, the U.S. District Court for the District of Columbia agreed with AARP and told HUD to find a way to shield surviving spouses from foreclosure and eviction.

A recent Elder Law Answers article, titled "Feds Move to Protect Some Surviving Spouses of Reverse Mortgage Holders," notes that if only one spouse's name is on a reverse mortgage and that spouse died, the surviving spouse would have to repay the loan in full or face eviction.

AARP sued the Department of Housing and Urban Development (HUD) on behalf of the surviving spouses of individuals who took out what is called a Home Equity Conversion Mortgage (HECM). These mortgages are the most common reverse mortgages and are overseen by HUD. These spouses were unable to sell and repay their loans because their homes were worth less than the balance due on the reverse mortgage due to the downturn in the economy.