Can I do a reverse mortgage on my mother's house?

2 answers | Last updated: Oct 12, 2016
A fellow caregiver asked...

My mother had a reverse mortgage and the year of extension is coming up in December. I am now of age to do a reverse mortgage. Can I do it on my mother's house and how does it work? I am 63.


Expert Answers

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.

When homeowners take out a reverse mortgage, they do not have to pay anything back as long as they live in the house. If they move out of the house or pass away, the balance including principal and interest becomes due. There is a 6 month grace period for the homeowners or their heirs to pay off the mortgage. The heirs can either sell the house or keep it. Either way, the mortgage must be repaid. It is possible to get up to two 90 day extensions to give the heirs additional time to sell the house. You are quickly coming up to end of the maximum extension of one year (6 months + 90 days + 90 days).

In order for you to take a reverse mortgage, you must be over age 62, own the property and live in the house. If you meet these criteria, you can use a reverse mortgage in your name to pay off your mother's reverse mortgage. The amount you can borrow depends on the appraised value of the house, current interest rates and your age. The younger you are, the less you can borrow. So at age 63, you might not have access to as much principle as your mother had. The amount you can borrow may not cover the payoff for her loan. You may have to add cash to pay off her mortgage.


Community Answers

Sjolley2 answered...

Before you get a second reverse mortgage on mom's house understand all your rights as an heir. When mom passed you had a nutmber of rights but would have needed to communicate with the lender within 30 days of receiving a due and payable letter to set the time clock in your favor. The lender has no responsibility to give you any time beyond the 30 day notification if you do not respond appropriately and timely. The second important element is if you live in a judicial or non-judicial foreclosure state. Also, foreclosure laws vary from state to state. Bottom line is you need to know your rights and options for your circumstances and state in order to make the best financial decision for your wellbeing. Happy to answer questions. Sandy Jolley, Reverse Mortgage Suitability and Abuse Expert