Author Topic: Reverse Mortgage best option for my parents?  (Read 1229 times)

sliqx

  • 5 O'Clock Shadow
  • *
  • Posts: 6
Reverse Mortgage best option for my parents?
« on: January 26, 2015, 03:06:48 PM »
Hello Everyone,

New to the forum and could use some guidance. Recently, I have found out that my parent's have been unable to keep up with property taxes and now are trying to be foreclosed. They are 66 and 62 who are currently living off of social security. The property taxes are about ~$6k a year. They currently owe ~$60k in both property and judgment lien. The house, however, is completely paid off, and has a net of $260k. My parents recently got served from the property tax lien company and is now trying to foreclose the home. My question is - would a reverse mortgage be the best option for them? I have been trying to do some research on the RM and it seems like a good option - but I don't know if there is anything "hidden" I should know about? I would also imagine that my parents would want to stay for probably another 3-4 years max and downsize afterwards as the home is too big for just 2 people.

Any input or help would be great. Thanks.

Aphalite

  • Bristles
  • ***
  • Posts: 425
Re: Reverse Mortgage best option for my parents?
« Reply #1 on: January 26, 2015, 03:44:30 PM »
Why not just sell the house and move to an apartment now rather than 3-4 years from now? Reverse mortgages are really expensive fee wise, if they have to do something where they're giving up the title to the house, they might be better served opening a 75k HELOC - less origination fees

SaintM

  • Guest
Re: Reverse Mortgage best option for my parents?
« Reply #2 on: January 26, 2015, 04:33:25 PM »
I'm not sure a lender will approve a HELOC on a property with $60k in liens plus a history of unpaid taxes. If the house is too big for two people, it's best to downsize now while things are still (sort of) on their terms.

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1413
Re: Reverse Mortgage best option for my parents?
« Reply #3 on: January 29, 2015, 04:57:25 PM »
A reverse mortgage is a terrible idea -- an outright sale is better. An RM is expensive & prohibits renting the property.

Check to see if the state/taxing authority has a tax deferral program for seniors. This is the case in Texas. The deferred property taxes are only due when the house is eventually sold.