| Capital Reverse Mortgage Group, Inc |
Consult your tax advisor. Consult appropriate Government Agencies. CA Department of Real Estate Broker License 00350120
Q: WILL MOM AND DAD USE UP MY INHERITANCE?
A: While tapping into their equity, your parents’ home may be
appreciating in value, which could allow for equity left at the end of the
loan. They are also able to live comfortably without having to depend
upon family members to support them.
Q: WILL THE BANK TAKE THEIR HOME?
A: No, the bank will not take their home. Throughout the life of the
reverse mortgage, your parents will continue to own their home and
retain title.
Q: HOW MUCH MONEY WILL THEY OWE WHEN THE LOAN HAS
TO BE REPAID?
A: Your parents will owe the total amount borrowed, accrued mortgage
insurance premiums, accumulated interest, service fees, and any other
costs and fees financed through the loan amount.
Q: WHEN DO MY PARENTS REPAY THE LOAN?
A: There are three viable options for your parents. They can sell their
home, repay the lender and collect the proceeds, choose to reimburse the
lender directly from a personal account, or refinance the loan.
Q: WHAT HAPPENS TO THE EQUITY IF MY PARENTS OR I DECIDE
TO REPAY THE LOAN BY SELLING THEIR HOME?
A: If they decide to sell their home they keep all equity above the loan
payoff amount.
A: While tapping into their equity, your parents’ home may be
appreciating in value, which could allow for equity left at the end of the
loan. They are also able to live comfortably without having to depend
upon family members to support them.
Q: WILL THE BANK TAKE THEIR HOME?
A: No, the bank will not take their home. Throughout the life of the
reverse mortgage, your parents will continue to own their home and
retain title.
Q: HOW MUCH MONEY WILL THEY OWE WHEN THE LOAN HAS
TO BE REPAID?
A: Your parents will owe the total amount borrowed, accrued mortgage
insurance premiums, accumulated interest, service fees, and any other
costs and fees financed through the loan amount.
Q: WHEN DO MY PARENTS REPAY THE LOAN?
A: There are three viable options for your parents. They can sell their
home, repay the lender and collect the proceeds, choose to reimburse the
lender directly from a personal account, or refinance the loan.
Q: WHAT HAPPENS TO THE EQUITY IF MY PARENTS OR I DECIDE
TO REPAY THE LOAN BY SELLING THEIR HOME?
A: If they decide to sell their home they keep all equity above the loan
payoff amount.
| Reverse Mortgage FAQ's For Children and Heirs |
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Q: WHAT HAPPENS TO MY MOM AND DAD'S HOME IF THEY MOVE TO A SENIOR CARE FACILITY?
A: A reverse mortgage becomes due when the last borrower moves out of his or her home permanently. For instance, moving into
a senior care facility, selling the home, passing away or moving in with the children.
Q: WHAT HAPPENS IF THE LOAN BALANCE BECOMES GREATER THAN THE VALUE OF THE HOME?
A: The Home Equity Conversion Mortgage (HECM) is a non-recourse loan, which means that the borrower can never owe more
than what the house is worth. As HECM borrowers, your parents pay a mortgage insurance premium to the US Department of
Housing and Urban Development (HUD). They, in turn, guarantee that the borrower will never owe more than the value of their
home when the loan becomes due and payable.
Q: WHAT ARE THE EFFECTS ON SOCIAL SECURITY AND MEDICARE?
A: A reverse mortgage doesn’t effect regular Social Security or Medicare benefits. To find out how it impacts on means-tested
programs, contact CAPITAL REVERSE MORTGAGE GROUP, INC or the agency directly.
Q: ARE THERE RESTRICTIONS ON HOW MY PARENTS SPEND THEIR MONEY?
A: Your parents can spend their money any way they want. Borrowers have used reverse mortgages to pay for grandchildren’s
educations, vacations, new cars, home improvements or to eliminate debts. The money can be used for anything they desire.
Q: IS THERE ANY INFORMATION THAT PROVIDES WHAT ALL OF THE FEES WILL BE?
A: A Total Annual Loan Cost (TALC) disclosure, which is required by the Federal Reserve Board, will be provided to your
parents. The TALC displays the total transaction costs over the projected life of the loan, which will allow your parents to
understand all the costs.
*As always, please consult a tax advisor.
A: A reverse mortgage becomes due when the last borrower moves out of his or her home permanently. For instance, moving into
a senior care facility, selling the home, passing away or moving in with the children.
Q: WHAT HAPPENS IF THE LOAN BALANCE BECOMES GREATER THAN THE VALUE OF THE HOME?
A: The Home Equity Conversion Mortgage (HECM) is a non-recourse loan, which means that the borrower can never owe more
than what the house is worth. As HECM borrowers, your parents pay a mortgage insurance premium to the US Department of
Housing and Urban Development (HUD). They, in turn, guarantee that the borrower will never owe more than the value of their
home when the loan becomes due and payable.
Q: WHAT ARE THE EFFECTS ON SOCIAL SECURITY AND MEDICARE?
A: A reverse mortgage doesn’t effect regular Social Security or Medicare benefits. To find out how it impacts on means-tested
programs, contact CAPITAL REVERSE MORTGAGE GROUP, INC or the agency directly.
Q: ARE THERE RESTRICTIONS ON HOW MY PARENTS SPEND THEIR MONEY?
A: Your parents can spend their money any way they want. Borrowers have used reverse mortgages to pay for grandchildren’s
educations, vacations, new cars, home improvements or to eliminate debts. The money can be used for anything they desire.
Q: IS THERE ANY INFORMATION THAT PROVIDES WHAT ALL OF THE FEES WILL BE?
A: A Total Annual Loan Cost (TALC) disclosure, which is required by the Federal Reserve Board, will be provided to your
parents. The TALC displays the total transaction costs over the projected life of the loan, which will allow your parents to
understand all the costs.
*As always, please consult a tax advisor.
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| 959 South Coast Drive, Suite 490 Costa Mesa, CA 92626 (714) 433-0738 |