How do we buy a house back that had a reverse mortage?

A fellow caregiver asked...

When my grandma died, we found she had a reverse mortgage on her home. We want to buy the house back but don't know where to start. Do you have advice?

Expert Answer

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for Caring.com.

You should start with the company that is servicing your grandmother's mortgage. This may or may not be the lender. She should have been receiving monthly statements from the servicing company. The servicing company collects a monthly fee that is charged back to the reverse mortgage. They should be able to either put you in touch with the lender or advise you how to pay off the loan.

You have 6 months from the date your grandmother passed away to pay off the loan. If you need additional time, you can get a 3 month extension and, in extreme cases, an additional 3 month extension (for a total of 12 months.)

You should do a financial analysis to make sure paying off the loan and keeping the house makes financial sense. If there is equity left after the loan is taken care of, you will be ahead. However, if more is owed on the mortgage than the house is worth, this may not be a sound investment. Of course, you may have other non-financial reasons for wanting to keep the house.