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What is a "Adjustable Rate Home Equity Conversion Second Mortgage" ?.......this is one of the documents I'm trying to understand. Since I've known the FIL, he and his son (passed) have always been story tellers, and since he's getting older, his stories get more unbelievable. He's trying to convince me to "retire early so we can all move south where it is more affordable and telling me he can get us health coverage for $325 a year....month....no year". We do plan on doing this, but when we're ready.
What is a "Adjustable Rate Home Equity Conversion Second Mortgage" ?......
Hmmmm......sounds like this is the Reverse Mortgage from what I googled. The amount is about 350K above what the property is worth (500K total), and if he burned thru that to the point where his SS and Pension isn't enough, then somehow we need to get a closer look at whatever it is that he is paying out.
Hmmmm......sounds like this is the Reverse Mortgage from what I googled. The amount is about 350K above what the property is worth (500K total), and if he burned thru that to the point where his SS and Pension isn't enough, then somehow we need to get a closer look at whatever it is that he is paying out.
Yowzers. $500k is more than most people retire on for their entire retirement. I sure hope he didn't burn through that.
Even if he sold the house, sounds like it wouldn't be enough to satisfy the debt.
not sure what you are looking at, but hecm arm liens get recorded at 150% of the appraised value (or max claim amount, whichever is less). you need to look at a monthly statement to determine his actual loan balance.
if the home is underwater the borrower has no personal liability.
do the math. staying in this home with a reverse mortgage and just paying taxes, insurance and maintenance might be a good option. in many cases that is cheaper than paying rent somewhere else.
Last edited by anicon; 12-21-2018 at 07:05 PM..
Reason: spelling errors
not sure what you are looking at, but hecm arm liens get recorded at 150% of the appraised value (or max claim amount, whichever is less). you need to look at a monthly statement to determine his actual loan balance.
if the home is underwater the borrower has no personal liability.
do the math. staying in this home with a reverse mortgage and just paying taxes, insurance and maintenance might be a good option. in many cases that is cheaper than paying rent somewhere else.
Thank You. From what Documents I could find in County Records, the home was paid in full in 2001, then in 2007 45K was borrowed, 2008 another 55K, then 2011 came the Reverse Mortgage with a Max of 505K...I agree, it's best he stay in place. He tells us between the two of them, there is about 2,500 SS and Pension. Taxes are 3,500.
If the recorded reverse mortgage lien is 505K, that means the home appraised for $336,675 when the loan was taken out.
You stated FIL is 85 and took the loan 7 years ago, making him 78-79 at the time of origination.
Using HECM Principal Limit conversion factors from 2011, a 79 year old would have qualified for roughly 65% of the value.
$336,675 x 65%= 219K in available proceeds.
Minus 100K or so that went toward paying off his other mortgages, he could have easily burned thru 130k in cash since the loan was taken out. and have nothing left in the credit line.
Since the servicer wont talk to you, the only way you're going to find out the loan balance is if he shares a monthly statement.
Property taxes are under $300 a month. even with insurance and upkeep, he's never living cheaper anywhere else. Unless he moves in with you
IMHO- If he decides to stay in the home, make sure he catches up on the taxes and insurance ASAP. And then keeps up with them. Lender will foreclose over that. Find out if his spouse is a non borrower, if she is make a plan for her if something were to happen to him. She'll need a new place to live and will most likely be working with substantially less monthly income. Not something she'll want to think about but it's important.
If the recorded reverse mortgage lien is 505K, that means the home appraised for $336,675 when the loan was taken out.
You stated FIL is 85 and took the loan 7 years ago, making him 78-79 at the time of origination.
Using HECM Principal Limit conversion factors from 2011, a 79 year old would have qualified for roughly 65% of the value.
$336,675 x 65%= 219K in available proceeds.
Minus 100K or so that went toward paying off his other mortgages, he could have easily burned thru 130k in cash since the loan was taken out. and have nothing left in the credit line.
Since the servicer wont talk to you, the only way you're going to find out the loan balance is if he shares a monthly statement.
Property taxes are under $300 a month. even with insurance and upkeep, he's never living cheaper anywhere else. Unless he moves in with you
IMHO- If he decides to stay in the home, make sure he catches up on the taxes and insurance ASAP. And then keeps up with them. Lender will foreclose over that. Find out if his spouse is a non borrower, if she is make a plan for her if something were to happen to him. She'll need a new place to live and will most likely be working with substantially less monthly income. Not something she'll want to think about but it's important.
Good luck!
Great Info....Thanks....and I told him last night, "If need be, we will make room"......Wife sez "Hell no !"
Great Info....Thanks....and I told him last night, "If need be, we will make room"......Wife sez "Hell no !"
Smart wife.
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