Tips For Handling Reverse Mortgages After Death

A reverse mortgage lets seniors live in their houses without having to pay mortgage payments and could also offer retirees with their much needed money. But just like all other loans out there, reverse mortgages need to be paid back eventually. Things can be complicated when it is time to pay back the mortgage. This will depend on the amount of equity you’ve got in your home and if you would like the house to remain in your family after you pass away.

Create a Solid Plan On How To Handle A Reverse Mortgage After Your Death

Get A Will

Your pay off plan should include creating a will before you take out a reverse mortgage loan to make sure that all of your assets, including your home, are transferred to the right individual upon your death. If you don’t have a will, your home would undergo a probate process and the state would decide who would inherit your share of your home.

Update Your Records Regularly

Under the tax laws that are set in place these days, reverse mortgage borrowers who purchase or make significant improvements in their homes could be eligible for a home interest tax deduction once the loan has been paid off. However, the only way for you to prove if the interest rate is indeed deductible is to make sure that you keep all your records so that you have the documents to prove how you used the funds from your loan.

Determine The Best Pay Off Option

In most cases, heirs just sell a house after the borrower of the reverse mortgage dies and your will could determine how you would like the remaining proceeds to be utilized once the loan is paid off.

One good way for you to pay off the reverse mortgage loan is to sell your house to your kids while you are still living, and use the sale proceeds to pay off the reverse mortgage loan. There’s also the option that involves renting the home back from your kids while you are alive. In case you decide to do this, you should consult an estate planning attorney or an accountant who can help you manage the sale of your home so you can avoid running into problems with gift tax laws. In case it’s important for your family to keep the house, you should think about paying off the loan while you are alive, probably with assets such as cash value in your life insurance policy or cash from an investment account. 

Reverse mortgages Columbia are types of loans that can be quite complicated. Therefore, borrowers as well as their heirs have to know how to pay back the loan once it comes due. By knowing and understanding the options ahead of time, borrowers of reverse mortgages as well as their loved ones could decide what options are the best for their unique situations.

Call Reverse Mortgage Specialist if you are interested in knowing more about reverse mortgages.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/