A Family Decision

PEW Research Center states that 75% of middle-aged adults feel responsible for providing financial assistance to an elderly parent in need. However, a reverse mortgage can take the financial burden off both the borrower and their family. The loan can help access funds to pay for medical bills, home improvements, in-home care, and other expenses for loved ones.


Frequently Asked Questions

Will the bank own the home?

No — Just like a traditional mortgage, homeowners borrow money using their home as a guarantee for the loan. The difference is that the loan is not due while the borrowers are still living in the home. The only time the loan can become due while borrowers are living in the home is if they are not complying with all of the loan terms. Borrowers will not be required to make monthly mortgage payments but must continue to pay their property taxes, homeowners insurance, and keep the house in good condition to comply.

What happens to the home when the loan is due?

With a reverse mortgage, borrowers can still leave their home to their loved ones. When the loan becomes due, the heirs can either sell or keep the home after repaying the loan. If the loan balance is less than what the home is worth, the heirs will keep the remaining funds. If the balance is more than the home is worth, heirs won’t have to pay more than 95% of the appraised value. The remaining balance of the loan is covered by mortgage insurance. The heirs will never assume the debt of the reverse mortgage loan.

What happens if our parents leave their home before receiving their full proceeds from the loan?

If your loved one leaves the home, any part of the loan that hasn’t yet been disbursed remains as equity in the home. The reverse mortgage loan becomes due and the heirs are given a reasonable time to sell the home. They also may keep the home by paying off the reverse mortgage or refinancing. Otherwise, the home is sold with proceeds first paying off the reverse mortgage loan, and the remaining balance going to the estate.

Help for Family Caregivers

AARP conducted a study among family caregivers that help parents or older loved ones. The report states that more than three quarters are incurring out-of-pocket costs adding up to an average of $7,000 per year. A reverse mortgage can help alleviate financial stress for not only the borrower but for their family as well.

the average that family caregivers spend per year
the average out of pocket costs for long-distance caregivers
more than three in four family caregivers are incurring out-of-pocket costs as a result of caregiving

Speak to a Loan Officer

There are many misconceptions surrounding the reverse mortgage loan. The best way to clear up whatever questions you may have is to speak to one of our licensed loan officers. Call us today to speak to a professional in your area.