Ask Terry Questions Reverse Mortgage

Reverse Mortgage

By Terry Savage on March 30, 2020 | Housing / Real Estate

I did see a segment with you on WGN Morning show that talked a little on Reverse Mortgages. I had a reverse mortgage for 8 years and see even though there is no withdrawal monthly interest and mortgage insurance premium is added to amount that will be required to repay when property is sold. I fully understand this but, if I’m correct, you used a situation in your family that caught my ear. When your Father passed the amount he owed was more than his house was worth. So the keys were handed to company who held the reverse mortgage and that was it. I’m 79 a widow living only on social security and if this statement is true it would be a great relief to me. I will be able to live my life with a little bit of peace. Your expertise would be greatly appreciated!

Terry Says

Relax. That is absolutely true — and exactly what happened with my father’s RM. Since he lived to be 96, the amount withdrawn (including interest) grew to be worth more than his condo, by far! My brothers and I had agreed when we did the RM that we didn’t want to own the condo later after he passed on. So that’s how it ended.
By the way, the lender is insured against taking a loss on the eventual sale of the property! It’s just that my Dad lived far longer than they anticipated! (Good for him!)

If you have a reverse mortgage, as long as you can pay property taxes and insurance, and the upkeep of the property, you can stay there. But if you move out permanently (or even to a nursing facility), or die, they can “accelerate” the loan and take the property. But they can’t PUSH you out because you owe more than the property is worth! Enjoy your home with that peace of mind.

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