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.

Done Correctly, Reverse Mortgages Can Be a Positive Solution to Some Houston Homeowners

Published on: May 16, 2016 | By McCulloch & Miller, PLLC

The numbers are still small, but as Boomers age, the reverse mortgage may grow in popularity to maintain a certain quality of life.

Reviled for years for high costs, today the reverse mortgage—sometimes referred to as a Home Equity Conversion Mortgage (HECMs)—is a government-insurance loan that allows qualified seniors to turn illiquid home equity into tax free cash that they can use in a variety of ways. Many older adults in Houston use the reverse mortgage to make it possible to stay in their homes during retirement.

The Fifty-Plus Advocate says in "Top ways to use a reverse mortgage" that when used properly, a reverse mortgage may be the solution to living an independent, fulfilling life. A reverse mortgage lets you retain full control and ownership of your home. You are still obligated to maintain the property and to pay real estate taxes and homeowner's insurance, but you can stay in your home for the rest of your life. You also can sell your home at any time without a penalty, and any profit from the sale after paying off the reverse mortgage belongs to you. In many instances, properties held in a trust or life estates are eligible.

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 Should Know Key Issues Of Reverse Mortgages

Published on: April 2, 2014 | By McCulloch & Miller, PLLC

Death of the borrower triggers the loan payoff, but the estate and heirs will never owe more than what the home is worth.

Family homes are unique assets. And like many assets, family homes can be as complicated as they are meaningful. Even when heirs inherit a home with no strings attached, issues can arise.

But what about when there are strings that come with inheriting the family home? What if there is still a mortgage or, increasingly common, a reverse mortgage? Notably, when a reverse mortgage is in play there are a few more things an heir needs to know.