Expert: Dick Dennis - 10/8/2008

Question
Dear Dennis:

My elderly father recently died.  My mom (in her 80s)  has moved in with my sister.  My dad asked my sister to sell the home upon his death so that money can be provided to my mom for the rest of her life and in the event she needs long-term nursing care.  The home, now owned by solely by my mom and completely paid off, is valued around 900k.

I rent an apartment in another state.  This is the home I grew up in and I’d like it to remain in the family.  I’d like to buy it but wouldn’t be able to get a mortgage because of my own credit problems and limited income.

What can be structured so that my mom gets a significant amount of cash out but that I get to own the house?

Thanks,


Winston  

Answer
What you describe, Winston, is an ideal situation for a Reverse Mortgage. I am sure you have heard of it. It is guaranteed by FHA so you know everything is legit. Your mother will receive a monthly stipend every month or a lump sum AND a monthly stipend or a lump sum only until your mother leaves us.

You cannot lose the house. Upon your mother's death you will be required to pay off what was lent during the time of the Reverse Mortgage. If you do not have the money or cannot borrow it, then HUD will sell the house to pay off the loan. Whatever balance there is goes to your mother's heirs.

I would recommend you consult with a Reverse Mortgage counselor. You will not be able to get a reverse mortgage without that consultation. Ask any kind of questions. Just go to AARP.com. I wish you well.

Dick Dennis         dixiedee13@aol.com