For adult children
Helping Mom and Dad Decide
A clear, honest look at reverse mortgages so your whole family can make the decision together.
What You Should Know
It's a loan, not income
Interest and fees are added to the balance, which grows over time. Your parents' home equity decreases.
Your parents keep the title
They still own the home and must live in it as their primary residence.
Obligations continue
Property taxes, homeowners insurance, HOA dues and upkeep must stay current.
Counseling is required
An independent HUD-approved counselor meets with your parents first. Family can join.
An FHA-insured Home Equity Conversion Mortgage (HECM) is available to homeowners 62 and older. It is a loan: interest and fees are added to the balance, which grows over time, and your home equity decreases. HUD-approved counseling is required and a financial assessment applies. HECM limits are set by FHA and updated annually.
Questions to Ask
Ask me, and the HUD counselor, all of these.
- What are the total upfront and ongoing costs?
- How will the balance grow over 5, 10 and 15 years?
- Which payout option fits their plans best, and why?
- What happens if one parent passes away or moves to care?
- Are there alternatives, like downsizing or a HELOC?
- How will this affect what's left to the family?
What Happens to the Home Later
The loan becomes due when the last borrower sells the home, permanently moves out or passes away. At that point the family can sell the home and keep any remaining equity, keep the home by paying off the loan, or sign the home over to the lender.
Non-recourse protection
A HECM is non-recourse. Heirs never owe more than the home's value when it's sold. If the family wants to keep the home, they can pay the lesser of the loan balance or 95% of the appraised value. No other family assets are at risk.
Your Parents' Responsibilities
There is no required monthly mortgage payment, but you do have ongoing obligations. Not meeting them can cause the loan to become due.
Live in the home
It must remain your primary residence.
Pay property charges
Property taxes, homeowners insurance and any HOA dues.
Maintain the home
Keep the home in good repair.
When it comes due
When the last borrower sells, permanently moves out or passes away.
Let's Talk as a Family
Join your parents on a call, in person or by phone. I'll answer every question honestly.
Back to reverse mortgages · NMLS #172296
A reverse mortgage is a loan that must be repaid when the last borrower sells the home, permanently moves out or passes away. Borrowers must live in the home as their primary residence, stay current on property taxes, homeowners insurance and HOA dues, and maintain the home. Interest and fees are added to the loan balance, which grows over time. HUD-approved counseling is required. These materials are not from, or approved by, HUD or FHA. Fort Collins Mortgage, LLC, NMLS #172296.