Other family members such as your children even though they may be adults they are not eligible to apply for a reverse mortgage or be on title of your reverse mortgage if they do not meet the minimum age requirement of 55. If you happen to pass away and your property has a Reverse Mortgage on it and you have left your property to other family members, they will not be able to assume the Reverse Mortgage as they will not meet the required criteria at this time.
What Is Your Current Understanding Of A Reverse Mortgage?
Here we address the question – “can a family member be added to a reverse mortgage?”
A family member can be added to a reverse mortgage if they meet all of the following;
- a family member must be 55 years or older,
- the property must the family member’s principal residence,
- however, the family member has the option to pay-off the mortgage
Can I Add A Family Member To A Reverse Mortgage?
The Question is “Can a family member be added to a reverse mortgage?” In order to answer this question let’s look at the criteria to be eligible for a reverse mortgage.
Click here to learn more from our Living Your Best Retirement With A Reverse Mortgage Webinar.
Who Is Eligible For A Reverse Mortgage?
First of all, people on title must be 55 years of age and must designate the property to be mortgaged as their principal residence.
The property value must be a minimum of $200,000 and the maximum loan to value is 55%. The maximum loan amount is based on the age of the owners, the location of the property, the type of dwelling, marital status of the registered owners.
Generally, the older you are the more you will receive in your reverse mortgage.
For example, if you are a male, 55 years of age and own a condo in Vancouver, BC valued at $600,000 your maximum loan amount would be 179,00 versus if you are a male, 75 years of age your maximum would be $293,000. A female the same age is slightly higher until the age of 75 years when the maximum loan amount drops slightly below that of a male of the same age.
A detached home is going to net you a higher loan amount as well and if it is an urban center it will earn you more than if you are outside the city. Location and marketability is key for determining the amount of equity available.
If your adult children are over the age of 55 years and the same home is their principal residence they can be on title of the home, however, you may receive less in the amount of equity you could receive. If your adult children are under the age of 55 years of age and this is not their principle residence, they cannot be added to the title of the home.
If your adult children wish to keep the family home, they can refinance the reverse mortgage with a traditional mortgage making the principle and interest payment on that new mortgage should you pass.
How Can A Reverse Mortgage Be Repaid
Let’s review when a reverse mortgage can be repaid. This partly addresses the questions “how to get out of a reverse mortgage?” and “how to get out of a reverse mortgage?”
Typically, reverse mortgage is paid back when the homeowners no longer live in the home and the home is sold. Or you can pay it back at any time if you have the funds available, withdrawing investments or the sale of another property for example.
If a spouse passes away, the surviving spouse remains in the home with the reverse mortgage intact.
Benefits Of A Reverse Mortgage
A reverse mortgage is a niche product, the benefits are; no mortgage or interest payments, tax free cash, allows you to stay in your home you love.
You can renovate your home to allow you to age in place, or take your family on a dream vacation, whatever you wish to do with your equity is up to you. Your pension income does not get affected by taking out your equity.
With the real estate market increasing year after year, makes a reverse mortgage a smart choice for financing your retirement. With the massive changes in the economy since 2008, and another blip in 2020, retirees have less money than they expected when they were planning their retirement.
A reverse mortgage is a perfect option to consider to ease the financial stress you may be feeling. If you would like more information, please contact me without an obligation on your part. Let’s connect and see what financing product suits your needs best.
Expert Advice to Guide You Home
Click here to learn more from our Living Your Best Retirement With A Reverse Mortgage Webinar.
How does a reverse mortgage work if you own your home?
If you already own your home reverse mortgage works by taking a part of your home equity and using it to pay off your current mortgage, assuming you do have one. Since you don’t have a mortgage debt to pay off, you’ll collect the whole loan proceeds if you buy your home free and simple.
How A Mortgage Broker Can Help?
A mortgage broker is a legally approved licensed specialist who has connections with various lenders and mortgage products. They have the knowledge of many types of mortgage products and rates and offer you a wide variety of options to choose from. You can compare between various lenders, rates and other factors and choose wisely.
What happens when you sell your home with a reverse mortgage?
When you sell your home with a reverse mortgage the title company will send the required payoff amount to your reverse mortgage lender once your house has sold. Ascertain that the reverse mortgage loan is fully paid off with the proceeds and that your lender account is closed. Any extra money will be given to you.
What Questions Should I Ask A Mortgage Broker?
The top 2 questions that I would recommend asking a mortgage broker, or anyone that you are speaking to who is offering you mortgage advice (this includes your bank, your friends, your parents). What type of mortgage did you get, and why? What was your thought process, or strategy behind selecting your mortgage product? What strategy are you recommending for me, and why (what is it based on).
Are reverse mortgages transferable?
Reverse mortgages are not transferable and it usually belongs to one person or two married spouses. If one spouse dies but the surviving spouse is identified as a co-borrower on the reverse mortgage, the surviving spouse will stay in the house and the loan terms remain unchanged. Adult children and other nonspouse descendants, on the other hand, must pay off the debt when the last borrower dies. They have the option of keeping the house, selling it, or handing it over to the lender.
Are Mortgage Brokers A Good Idea?
When mortgage brokers first came on the scene, many years ago, the thought was that they were only there to help you get financing when you were desperate and your bank turned you away. Today, thanks to mortgage brokers, we have access to a competitive marketplace. Yes, that is right. Mortgage brokers keep the industry competitive by their very nature. By bringing options and choice to the consumer, it forces the banks to remain competitive for your business.
What happens at end of reverse mortgage?
At the end of a reverse mortgage, the loan must be repaid when the last surviving borrower passes away. Most of heirs will sell the house to pay back the loan. The heirs will not have to pay more than 95% of the appraised value if the loan balance exceeds the value of your home.
Are Mortgage Advisors Free?
The short answer is Yes, there is no direct out of pocket cost to you when using a mortgage broker. The way that the mortgage industry works, even if you are going in to your bank and using a mortgage advisor in branch, or you are using a mortgage specialist from a bank, who is paid on commission and not a salary, or a mortgage broker, who has access to more than just one bank and one lending product, the cost of the service is built into the pricing of your mortgage rate.
Can you lose your home with a reverse mortgage?
It is almost impossible to lose your home with a reverse mortgage since you borrow against your home’s equity and repay the loan with the proceeds of the sale. There aren’t many ways to lose ownership of a reverse mortgage because you still own your house, unless you fail to preserve three primary components of your home’s legal status.
Do You Pay A Fee To A Mortgage Broker?
The short answer is no. Most of the time, the lender that you select to go with, through your mortgage broker, pays your mortgage broker a referral fee. There are costs associated with setting up a mortgage, and these costs and fees are discussed as part of the process. Costs such as legal and closing costs. All borrowers are responsible for these costs. There are occasions when a mortgage broker will charge you a fee.
If you would like more information or a free consultation to see if a Reverse Mortgage is a fit for you, you can contact me below, and as a Certified Reverse Mortgage Specialist I would be more than happy to review your financing options with you and provide you with Expert Advice to Guide You Home.
