If a person has paid PITI on their $175,000 home over 15 years and now has taken out a reverse mortgage, how many years can that person expect to be paid back from that mortgage (plus, I guess the mortgage company will be deducting their fees)? And, what happens to the home and the person after the reverse mortgage has ended.
2007-09-26 16:58:33 · 9 answers · asked by sophieb 7 in Business & Finance ➔ Renting & Real Estate
Part of PITI IS the payment toward the house so yes it depends on how much was paid on the mortgage from PITI.
And, I didn't ask anything about death.
2007-09-27 03:53:50 · update #1
so how many years will this pay down of the mortgage last? 10 years, 15 years, less? what's your guess?
2007-09-27 14:12:01 · update #2
OK, first of all, I do reverse mortgages, and believe me...we do not get a "huge" commission on reverse mortgages. Quite the opposite actually. A reverse mortgage is not for everyone. And just like it sounds, the mortgage goes backwards not forwards. It's an EXCELLENT loan for the right person, and it is not for everyone. Instead of making a mortgage payment, the person has 3 options. One is to take out a 1 time lump sum, and make no payments other then taxes and insurance (the loan does a negative amortization). Another is to get a set amount every month, and another is just to refinance and get no cash. The only thing you pay is your taxes and insurance, and no matter which option you chose, the loan does a negative amortization (gets bigger). Reverse mortgage can be refinanced, paid off, there is an end to the loan if the principal balance is paid. The bank does NOT own the house if the person should parish, it is the estates responsibility to sell the home or pay the loan off. There is an income limitation, and age limitation, and reverse mortgages CANNOT BE DONE by a lender that is not HUD approved. If you know anything about HUD, they are on top of every loan that goes through to make sure that there is a true benefit to the borrower. If there is no benefit, the loan is rejected. HUD frequently comes in and audits every loan file done by a HUD approved lender. If they feel there is any fraud, abuse, neglegence, or anything out of line, there is an investigation done and the lender could be shut down. There could also be criminal prosecution depending on the violation.
If you are in the North or South Carolina area, you can e-mail me at work with more questions. Loans are typically lender specific, and different states have different guidelines. If you are not in the Carolinas, I can connect you with a PROFESSIONAL in your area that knows about reverse mortgages to answer your questions correctly. My work e-mail is - sulrich@firstdecisionmtg.com
I hope this helps.
2007-09-27 00:04:30 · answer #1 · answered by Shawna Marie 3 · 0⤊ 0⤋
The lender DOES NOT "own" the house upon death.
They ARE owed an amount of money. If the house can be sold for more than that amount, the heirs get the difference, or they can usually pay back the amount due and keep the house.
Fees are deducted up front. Reverse mortgages are not the best option for people who can qualify for a regular loan.
Some that sell them are slick salespeople. The up front fees can be HUGE. A dangerous loan IMO.
The reverse mortgage is for life. It doesn't end until death OR usually if borrower is out of the home for 12 consecutive months, like in a nursing home.
NEVER AGREE if you don't understand EVERYTHING in writing, not only what the salesperson tells you. They get a huge commission.
Do you already have one ????
2007-09-26 19:21:05 · answer #2 · answered by CommonCents 4 · 0⤊ 1⤋
The PITI paid on the original mortgage has nothing to do with the reverse mortgate. The amount available on a reverse mortgage would depend on how much equity the person has in their home, and their age.
After the person dies, the lender generally owns the house unless there is some other stipulation in the reverse mortgage contract.
2007-09-26 17:52:52 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
He is crazy. They are expensive and not a good idea, and in the situation you describe it's dangerous. He could end up losing the house, and if the market goes up, depending on the loan, the equity won't be his. There are plenty of ways to get money for college, fill out the FAFSA form and ask. Look into Pell Grans etc. You also can go to a state school for the first 2 years and transfer later. Sounds like he doesn't have money for college for you, so why not let the colleges give you their money. As far as vacation etc goes, if he blows the house now, what will happen when he is old and sick. Where is the money going to come from to take care of him? Help him find an Internet or work from home job if he really needs the money.
2016-04-06 03:05:29 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2007-09-27 14:11:11 · answer #5 · answered by Anonymous · 0⤊ 0⤋
can you get a reverse mortgage if you are making payments to the irs?
2015-01-21 04:43:28 · answer #6 · answered by williamr 1 · 0⤊ 0⤋
I was the Chaplain of a recreational vehicle park where many resided year round. There was to be seen on many visiting RV's, "I am spending my childrens' inheritance" bumper sticker.
2007-09-27 09:59:20 · answer #7 · answered by Jonathan W 2 · 1⤊ 0⤋
It depends
2016-08-24 17:41:19 · answer #8 · answered by Anonymous · 0⤊ 0⤋
challenging stuff. check out from yahoo and bing. that will may help!
2014-12-08 14:43:32 · answer #9 · answered by ? 3 · 0⤊ 0⤋