UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: spgarg Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Reverse Mortgage Date: 1/5/2000 3:47 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
My mother-in-law has used up her meager savings and is now relying on the equity in her home to meet living expenses. We looked into reverse mortgages, but through a bank the up front costs were horrendous for a rather limited availability of funds. (Assessed value = $325,000. Funds to be provided = $132,000 over 30 months. Closing costs = $12,000.) My wife and I decided to mortgage it ourselves, and are now starting to fund Mom's expenses, which are mounting every day, as she now needs companion care. She could go on for a few months, or many years in her frail condition. I am concerned that the "arrangement" we have with her other two children, and possibly the State may be exposing me to future problems. Do I need to file a lien with the Town Clerk so I can collect my money with interest after she dies and the house is sold? What if she outlives the house value? Will the State(Title 19) try to take her house - my house then? Help! Steve
Print the post Back To Top
Author: JoePickard Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17371 of 75383
Subject: Re: Reverse Mortgage Date: 1/5/2000 9:33 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I work for a major home mortgage lender in Florida, and due to the risks of proprty value fluctuation, most reverse mortgage plans are NOT great deals for the consumer. The lender has to have an incentive for the extra risk (i.e. extra fees, a share in the equity, etc.) However, if the owner has immediate need for these funds, as it sounds in the case of your mother, it may be a superior alternative, especially if it is important to her to remain in her home. With any mortgage provided by a third party, there will be many "extra" fees and costs. It was a excellent choice to provide this mortgage to your mother; you should clearly explain all this to the other beneficiaries of you mother's will, especially if your mother is not 100%.

Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17376 of 75383
Subject: Re: Reverse Mortgage Date: 1/5/2000 10:28 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Greetings, Spgarg, and welcome. You wrote:

<<My mother-in-law has used up her meager savings and is now relying on the equity in her home to meet living expenses. We looked into reverse mortgages, but through a bank the up front costs were horrendous for a rather limited availability of funds. (Assessed value = $325,000. Funds to be provided = $132,000 over 30 months. Closing costs = $12,000.) My wife and I decided to mortgage it ourselves, and are now starting to fund Mom's expenses, which are mounting every day, as she now needs companion care. She could go on for a few months, or many years in her frail condition. I am concerned that the "arrangement" we have with her other two children, and possibly the State may be exposing me to future problems. Do I need to file a lien with the Town Clerk so I can collect my money with interest after she dies and the house is sold? What if she outlives the house value? Will the State(Title 19) try to take her house - my house then? >>

I urge you most strongly to see an attorney or two. You need advice regarding the real estate venture (i.e., the self-funded reverse mortgage) for sure, and there are other issues that an attorney skilled in elder law can help resolve. I'm sure you wish to avoid that cost, but the money saved in doing so may be detrimental to your financial health. You need qualified legal advice, and that's something you can't get on these boards.

Regards..Pixy

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: zorloc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17389 of 75383
Subject: Re: Reverse Mortgage Date: 1/5/2000 2:30 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Pixy is right you need to contact an attorney so that you can structure things properly so you don't get screwed. An attorney that specializes in guardianship (if possible in your state) would be very helpful.

For a couple years I worked for a Guardianship agency in Seattle, so I am familiar with the issues that you are dealing with, although it is within Washington State, so things can and will be different where you are.

I can give you a couple tips (but you need to confirm them with an attorney):

1) To become Medicaide eligable you need to have assests of no more than ~$2000 (not including a funeral trust, etc). This means that the house will either disallow her participation or they will put a lien on the house. So you need to get the ownership out of her name, but you can't just switch the title - they would go after you then.

2) Buying the house from your mom on contract is an excellent option. It keeps your mom private-pay as long as possible, and the house will stay in the family.

3) Investigate a Power-of-Attorney.

4) SEE AN ATTORNEY. This area is a very testy. I have seen families and estates distroyed through bickering about options. But make sure that the family is united about what needs to be done. Talk and negotiate as long as possible, avoid litigation it is incredibly expensive. I have seen cases where three sets of attorneys are paid by the elderly person's estate (the Guardian and their attorney, the Guardian-ad-Litem, and the attorney for the individual), with more attorneys paid by family. Unity will make things work better.

jbw

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement