ElderLaw News — The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News

ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President., William S. Fralin, Esq., President.

Reverse Mortgage – Questions & Answers

What is a reverse mortgage?

A reverse mortgage is a loan that allows seniors age 62 and older to access a portion of the equity in their home. The proceeds from the loan are generally tax-free, and borrowers are free to use their proceeds however they choose– whether it’s to pay off debt, eliminate monthly payments, cover medical expenses, or fix up their home.

How is it different from a home equity loan?

With a home equity loan, borrowers must have a sufficient income-versus-debt ratio to qualify, and they are required to make monthly payments. A reverse mortgage is different in that it makes payments to the borrower, and there are no income or credit score requirements. The amount available to the borrower through a reverse mortgage depends on the age of the borrower, current interest rates, and the appraised value of the home.

Can anyone get a reverse mortgage?

To be eligible for a reverse mortgage, all borrowers must be titleholders of the property and must be age 62 or older.

How much money can I get from a reverse mortgage?

Loan amounts vary and are based on the type of reverse mortgage, the age of the borrower, the appraised value of the home, and current interest rates.

What if I have an existing mortgage?

You may be eligible even if you owe money on an existing mortgage. However, the existing mortgage balance must be paid off at closing. You can choose to pay off the balance with proceeds from the reverse mortgage or another source.

Is my home eligible?

Single-family, 2- to 4-unit multi-family, modular, manufactured, planned unit developments (PUDs) and condo homes may be eligible. Co-op and mobile homes are not eligible. The property must also be your primary residence.

When will the loan become due?

Circumstances that will cause the loan to become due include, but are not limited to:

-- Last surviving borrower(s) permanently moves out of the home or passes away
-- Last remaining borrower(s) fails to live in the home for 12 consecutive months
-- Borrower(s) fails to pay property taxes or insurance
-- Property deteriorates beyond what is considered reasonable

Will my heirs or I have to sell the home when the loan becomes due?

When the loan matures, you or your heirs will have to repay the amount owed. Options include:

-- Paying off the entire balance and keeping the home, which can also be done by refinancing with a standard mortgage
-- Selling the home to pay off the balance.

Speakers

If you are interested in having an Elder Law attorney from The Estate Planning & Elder Law Firm, P.C. speak at an event, then please call us at:

Maryland (301) 214-2229
Virginia (703) 243-3200
Washington DC (202) 223-0270

The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

Visit us on the world wide web

Our websites contain information about The Estate Planning & Elder Law Firm, P.C. and an archive of our newsletters and other estate planning, estate administration, and elder law articles and resources.

http://www.chroniccareadvocacy.com

Distribution of This Newsletter

The Estate Planning & Elder Law Firm, P.C. encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to The Estate Planning & Elder Law Firm, P.C. If you are interested in a free subscription to the Elder Law News, then please e-mail us at office@chroniccareadvocacy.com, telephone us at (703) 243-3200, or fax us at 703-841-9102.

This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

Copyright © 2006-13 by The Estate Planning & Elder Law Firm, P.C.