By Admin on Sep 9, 2010 in Financial Services
My Dad passed away in June. He and Mom have two homes One has a reverse mortgage the other he took out a loan on for a line of credit. He apparently out lived his money and over the last ten years cashed in most of his life insurance policies. Bottom line, he left my mother the task of being responsible for two homes while receiving only ,100.00 a month from social security,She did receive 00.00 from the VA but this has been spent on bills. She has done nothing since my Dad did on June 25th, but sit at a table all day and night writing checks. My mother was not involved with the finances and is very much in need of guidance from a professional but cannot afford to spend any extra money for anything. She was advised that she should sell one or both of her homes. Although the line of credit she has in the one house is helpful (this is an interest only loan), it is not enough to support two homes and herself. I have been staying with her since Dad became ill on June 3rd. This house is close enough to mine where I can travel back and forth to my own home and try to keep it up as well, The other house (with the reverse mort.) is to far away for me to pull this off. She’s 86 and I’m concerned this stress will kill her too. Any advice is appreciated. Thank you
She isn’t looking for a loan really, she’s looking for a way out of one or two. She has no idea how my Dad handled the money, she just knows he would take money from one account and put it in his living expenses account. She thought it was the home equity-line of credit account he took it from so she did that. We have since decided she shouldn’t do that anymore. The reverse mortgage house can’t be rented, it’s their rules. Plus it’s a condo in an HOA and every time they’d turn around they’d be getting an assessment (sometimes 00.00) for for something plus they pay 0.00 a month to the association to live there. In their own house. It’s not a good situation in my opinion but, who knows. Thank you for (continuing) to respond.
Contact the holder of the reverse mortgage property. She needs to sell it now or give them deed so they can sell it. I don’t believe she will be responsible for any remaining debt once the house is sold. Ask that question though. She should stop dipping into the equity line since making interest only payments doesn’t put a dent in the principal & using it keeps adding to the principal. Good luck!
Beverly S | Sep 9, 2010 | Reply
Have your Mom go to Consumer Credit Counseling and have them consolidate all her monthly bills into one payment. They are a non-profit company that helps people get out of debt, and will give you sound advice. MY Mom paid off all her bills through them in a short time. Maybe your Mom could rent out the home with the reverse mortgage and add to her income. I have known many people who have gone to Consumer credit counseling and they paid off all their debts with there help, they are a non- for profit agency and help people get out of debt. My condolences on the passing of your Dad, I lost my Dad 7 years ago. How gracious of you to stay with your Mom she needs your help and support emotionally. Best Wishes.
Janice 10 | Sep 9, 2010 | Reply
I think a reverse mortgage may be a good idea in the situation where someone has limited retirement income. If you’re retired and having trouble getting by but own your home outright then I’d consider it. I don’t think inheritance should be a consideration either, supporting yourself in retirement takes precedent to leaving money to others.
dubai property | Sep 9, 2010 | Reply
Selling a home with a reverse mortgage = when the home sales, she has to pay back all the money that she has received on the property. If she has received more than the house is worth, she will not receive anything in the sale and will most likely be required to pay back the additional amount. Depending what the balance is on this loan, it might be better to keep this house. Since when she dies, any additional payment is not recoverable since she has no assets.
HELOC are home equity lines of credit = if she is usually this as living expenses I’m guessing she is breaking the terms of the loan. It is suppose to only be used to increase the equity of the house and it is not a tax write off if she uses the money for any other purpose.
Have you looked into a retirement home for her? That’s another options since it’s likely that medicare will front the cost for this.
Smiling | Sep 9, 2010 | Reply
She needs to stop using the line of credit and sell one home. The line of credit being interest only means she is just digging herself further in debt. Sell the reverse mortgage house, as she is also paying condo fees on this. It’ll save her a bunch.
the kid | Sep 9, 2010 | Reply
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Andrian Ramirez | Sep 9, 2010 | Reply