A common question and concern surrounding reverse mortgage is what will happen to the home after the homeowners pass? Will the bank take possession? Will it be allowed as inheritance? Will it be possible to keep the home in the family?
These are very valid concerns – so I’d like to offer some clear and concise guidance.
When the last homeowner passes, whether we’re talking about you or a loved one, the home will transfer into the estate or a specific person according to the wishes expressed in the homeowner’s will. At this time there are three main options:
1. Pay off the remainder of the loan
Depending on the amount of equity that still exists in the home, the financial situation of the family, and just the overall ability of those involved, this may or may not be a feasible option.
2. Obtain a conventional loan.
Many mortgage brokers are familiar with the reverse mortgage process and the right broker will be able to help those in need identify the best route in obtaining a conventional loan and keeping the home.
3. Sell the home
The final option is to sell the home. When there is not a desire to keep the home, the heirs can sell the home.
One last note, as long as the communication lines remain open, the bank will typically allow up to one year to help with the transition. This one year is allotted in three month increments.
Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, and Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.