Can I buy a house on terms that has a reverse mortgage?

Question

And if so, what considerations should be made?

I'm speaking with a seller who's father recently passed away, and the mother can no longer keep up the property. He's open to lease purchase, but is unsure how that might work with a reverse mortgage.

How does this work?

Ron S. · Answer

I'm confident the servicer with the reverse mortgage will know soon enough that the borrower is deceased and then call the loan due.

Scott Rogers · Answer

A reverse mortgage is pretty much a open line of credit. the terms are extended as long a the principle parties are living in the hose and are due generally 30 days after that changes.

Yes the Son could refinance the house. pay off the RM. then sell or lease the house.

Lucas Mills · Answer

Now if I were to take over a mortgage subject to, the bank can technically call the loan due, but they probably won't as long as payments continue to be made.

Does the same apply in this scenario, that they "technically can" but likely won't? Or is it a little different with a reverse mortgage, since they're paying the owner each month?

And let's say that the loan is called due - could her son potentially refinance with a mortgage in his name then I could take over that subject to and continue on?

Scott Rogers · Answer

Generally the loan is in full effect along as she lives in the house. once she moves from the house the Reverse mortgage is called. if the Lady, family and or estate can not settle the loan then the lender will foreclose.

Unless your down payment is enough to settle the debt, and you verify that happens I would not enter any agreement on that property. you would risk any principle you put into the venture

Jay Hinrichs · Answer

me thinks if the borrower dies the loan has to be retired.. so just like anything else pay cash.

Can I buy a house on terms that has a reverse mortgage?

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