Anyone Dealt with Reverse Mortgages?

I just wanted to know if there was a way to reverse a reverse mortgage.

It is in the talks that I may acquire my grandmas property (10 Acres) and she would live with us until her time passes.

We are in discussion that she is going to possibly change her will so it will be set up that we either get the house outright or we will be in a "rent to own" type of situation.

Its not set in stone, but we are in serious discussion with my grandma about it.

Pay the bank back and it's reversed.

I assume from your post that grandma has a reverse mortgage. I would think that as long as she lives there she would still get her monthly check.. Once she passes, the property belongs to the mortgage company.and you would have to purchase the property from the them. If a deal can be made, great.

Yes she has a reverse mortgage.

I want to reverse it before it becomes a full mortgage. I don't think it's easy as starting to pay the bank back. I don't even know if you can do that.

Refi, it's as simple as that.

talk to the bank.. they might even set you up with a decent deal. Best to talk to the horse, so to say.

mad_machine wrote: talk to the bank.. they might even set you up with a decent deal. Best to talk to the horse, so to say.

"The bank" doesn't own the loan so there is no horse to talk to. Go to the best lender for the loan type you will be seeking and you.

Normally it's just a lien against the property as payment for the loan. Pay off the lien and you're released.

The contract and the lien itself may contain 1001 conditions and fees for the payoff.

Remember though, the bank doesn't want the house, they want the money. Money they hope to get from selling the property someday later in the future. They'll take money now, if it's profitable for them.

In a reverse mortgage, the loan company appraised the house and loaned a reduced amount using the house for collateral. At her death, the loan is due and the heirs can pay it off using other assets, sale of the house or let the house go into foreclosure. Get a copy of the loan docs and get very familiar with them before you talk to the loan company. There may be a due on sale clause which will prevent an assumption and there may be pre-payment penalties.
The basic premise for the loan company however is that they are betting that the house will be worth more at the death of the owner than the debt. Generally, the quicker they get their money, the better the return for them.

good answer … this was a zombie revived thread, but your answer is relevant

To me, it is a very sleazy business but acceptible if fully and properly explained. Now the really wild bet is taking assignments on life insurance or structured settlements.

Do you mind expanding on the "sleazy" aspect?

I had someone tell me they were a scam. As with many things I am sure there are good and bad versions.

Wow, zombie thread AHOY!

This isn't even happening anymore. My uncle moved in with her and all bets were off the table.

I live in my own house now.

I work as a notary and do reverse mortgage applications so I see this all the time. There are several options. Normally what happens is...when she passes away, whoever the home is willed to has one year to refinance and pay it back or sell it and then they receive the remainder of the money once the loan is paid back. Another option is for her to sell the home to you now and you will pay off the loan with the refinance. The cheapest option would have been for you to refinance it now. The longer she's in the home, the more that has to be paid back.

I see that the situation has changed but....here's a reliable answer from someone within the industry.

aircooled wrote: Do you mind expanding on the "sleazy" aspect? I had someone tell me they were a scam. As with many things I am sure there are good and bad versions.

I think it's assigning blame to something people don't understand.

I almost went to work for a company doing this type of work, but when they couldn't guarantee more than 12 months of work for my particular position, we mutually decided it wasn't worth it for either of us.