There are so many things that cross your mind upon the death of a loved one, and the last thing you would want to think about is all the loans you or they have acquired. The problem is compounded when they haven’t left a will behind that legally states what to do with their belongings and assets. The one thing that can complicate everything is if your loved one had a reverse mortgage on their home.
Even though they may have spent plenty of years without paying any mortgage, mainly because of their home equity, you will need help from Mortgage Brokers in Vancouver now that they are gone. Most heirs in such situations don’t know how to deal with a reverse mortgage loan and what implications they will suffer if they don’t act fast.
We share some of the problems that heirs can face if their loved one had a reverse mortgage on their house and why they should visit mortgage brokers in Vancouver as quickly as possible.
Reverse Mortgage Problems Heirs Could Face
The heir or beneficiary has a big decision on their hands about whether they should continue with the loan or end it. The problem can be complicated, especially if there is no will left, and you will need to contact mortgage brokers in Vancouver to deal with the lender and discuss how to pay off the loan. However, most beneficiaries don’t inherit large sums of money or have a large bank balance of their own to pay off the entire loan, which could be a significant amount of money.
The most preferred option then is to put the property up for sale, which is the safest and wisest thing to do, even if that means you won’t have a large house to live in with your family. You don’t want to be in a situation where you face foreclosure, and it’s the fastest and most convenient method for paying back the loan completely.
The Responsibilities of Heirs
The first step that all heirs and beneficiaries must take is to hire licensed mortgage brokers in Vancouver to review the remaining balance on the reverse mortgage loan. That will give you a good idea about how much equity remains in the property, which will inform your decision about whether to sell or keep the house. Whatever decision you make, you should let the lender know as you don’t want to deal with any complications further after suffering the loss of your loved one.
Reverse mortgage loans allow individuals to enjoy their golden years without worrying about paying off their home loans. If you’re nearing retirement, are a homeowner, and are above 55 years old, you can qualify for a reverse mortgage. Contact Nicolle Dupont, a specialist in reverse mortgages, to learn more.
Kyle Mayers is the author of this article. For more details about Reverse Mortgages Brokers in Nanaimo please visit our website: reversemortgagesinbc.com
Most adults have heard of reverse mortgages, but many are unsure of what these loans mean and how they work.What Is a Reverse Mortgage?In a nutshell, these loans are outstanding loans intended for people over the age of 62 to have access to equity in their homes.
This type of loan is especially desirable to people who want, or need, to supplement their pension funds.How Does A Reverse Mortgage Purchase Loan Work?A reverse mortgage purchase loan works by first using part of the home equity to repay an existing residential mortgage - that is, if it still has a mortgage.The homeowner is not required to pay the loan monthly for the reverse mortgage, as the loan balance falls due until the final borrower leaves the house, passes away, failure to pays taxes or insurance, or neglects house maintenance.Although they are not required to make month-to-month payments, doing so could decrease the regular monthly interest or prevent it from accruing entirely.
If they decide not to make a month-to-month payment on the loan, interest for that month will get added to the total loan balance.After paying off the existing mortgage, the reverse mortgage purchase loan lender will pay any proceeds that are left from the new loan.
The homeowner gets to choose how to receive the funds.Types of reverse mortgage purchase loans: Home Equity Conversion Mortgages (HECMs)HECMs are insured by the federal government and make up more than 90% of all reverse mortgages purchase loans.Eligible residences include properties with one to four units, as well as approved manufactured homes, apartments, and co-ops.Proprietary loans: Private institutions fund proprietary loansSingle-purpose loans: Non-profit and other organizations fund single-purpose loans.
As the name suggests, single-purpose loans must be used for a specific purpose, which the provider typically dictates.
Currently, loans that are subject to proprietary or single-purpose loans are rarely given to borrowers.Who Is Eligible For A Reverse Mortgage Purchase Loan?To be eligible for a reverse mortgage purchase loan, the homeowner must meet at least the following criteria:Must be 62 years of age or older.Must have adequate equity in the home – about 50%, but the amount required varies depending on the lender.Must participate in a counseling session from a Department of Housing and Urban Development-approved counselor.Must go through a financial assessment.In addition to these requirements, the house also needs to qualify for the loan.
