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Started By
Message
Can reverse mortgages be transferred?
Posted on 1/6/23 at 8:25 am
Posted on 1/6/23 at 8:25 am
My wife's grandfather owns property and he currently has a reverse mortgage on the house/property.
He is 90 years old. My MIL (his only heir) has no desire for the property (its very rural and needs lots of work). She has given me first refusal upon his death. He is currently is good health, but at that age, planning ahead is advisable.
I know reverse mortgages are simply a loan based off some value of the property.
If I wanted to take ownership of the property, I assume all I would need to do would be to pay off the loan?
Is this correct or is there more to it?
He is 90 years old. My MIL (his only heir) has no desire for the property (its very rural and needs lots of work). She has given me first refusal upon his death. He is currently is good health, but at that age, planning ahead is advisable.
I know reverse mortgages are simply a loan based off some value of the property.
If I wanted to take ownership of the property, I assume all I would need to do would be to pay off the loan?
Is this correct or is there more to it?
This post was edited on 1/6/23 at 8:26 am
2
Posted on 1/6/23 at 9:01 am to Salmon
Basically correct. I'm pretty sure it would have to be done as a sale because it's encumbered by an escalating mortgage. The mortgage cannot be transferred or assumed.
Posted on 1/6/23 at 9:30 am to Salmon
You wouldn't want to transfer the reverse mortgage unless you want to continue to bleed equity. Upon sale, the balance on the RM will be due, so your new mortgage will pay the balance off and anything remaining will go to grandfather in a lump sum
If he's got a $50k balance and you buy it for $100k, $50k will go to the mortgage company and $50k to grandpa.
If he's got a $50k balance and you buy it for $100k, $50k will go to the mortgage company and $50k to grandpa.
Posted on 1/6/23 at 9:33 am to LSUGUMBO
What if there is no sale? Or would there have to be some sort of formal "sale", even if I don't pay anything above the remaining balance?
Posted on 1/6/23 at 10:33 am to Salmon
There has to be something filed in the courthouse to transfer the title. If it's a cash sale, then the cost of a title company is under $1,000 dollars to do the title search and prepare the paperwork. I would definitely have someone review the title just to make sure that the minerals weren't sold and forgotten about, or anything else unknown (old Right of Ways or Utility Easements) that might be encumbering the property, so you know with certainty what you're getting.
ETA: Apparently you cannot assume a reverse mortgage
Can you assume a reverse mortgage?
ETA: Apparently you cannot assume a reverse mortgage
Can you assume a reverse mortgage?
This post was edited on 1/6/23 at 10:37 am
Posted on 1/6/23 at 1:48 pm to LSUGUMBO
quote:
You wouldn't want to transfer the reverse mortgage unless you want to continue to bleed equity.
Let's just be clear.
a reverse mortgage is NOT transferable. The first thing is that Salmon would not meet the age requirement to even take out a reverse mortgage.
Posted on 1/6/23 at 1:50 pm to Salmon
quote:
Or would there have to be some sort of formal "sale"
Yes there would. I speak from experience as the FIL had a reverse mortgage on his home.
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