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.........considering reverst mtge.......house is about 385000.00 and have a mtge of 89000.00........considering a reverse mtge.......when passing i will be leaving house to my child........how does this all work......
Very basically, you'd get a monthly stipend dependent on the equity you own in your house. After you die, your child would have to pay it back, or the company who was paying you would own the house.
I would argue that "the lender would own the house" is far from technically correct -- even the most generous reverse mortgages rarely allow more than 70% initial equity to be withdraw. Thus upon SALE OF THE COLLATERAL the heirs would still have a nice payout.
Should the sale of the home NOT cover the indebtedness the lender, the lender WOULD NOT just "own the place" the heirs would still have the option to settle up, though there is NO obligation of the heirs to do so.
The beauty of a reverse mortgage, for those you want / need the money, is that the whole process can be accomplished in such a way that there is a lot of flexibility.
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