Creative alternative to a reverse mortgage to keep home in family

2 Replies

Hello BP community,

Thanks to BP I recently purchased my first duplex and am now trying to help my mother out. My mother has recently fallen on hard times and needs to either sell her property or do a reverse mortgage, which I feel should be a last resort. I was hoping to use the knowledge I've gained over the last year from BP, over 200 podcasts, and several books that have been recommended to help her out by buying the property myself and just renting it back to her. Her townhome is worth $240K and she owes about 105K so she has about $135K in equity. She needs to access about 50K quickly, and reduce her $1,100/month PITI mortgage payment to about half that. The home is in a hot location in Frederick Maryland and similar models rent for $1700/month. Is there a way I can buy the home from her and structure the deal to keep her in it but reduce her mortgage payment and cash out about 50K? I'm just trying to keep from losing the home by doing a reverse mortgage. I hope I gave enough info for a suggestion. Thanks BP for any help.

@Sean Haardt If you buy the property from her and rent it back to her below market, then it might fix her issue, but you will be loosing money every month.

Why do you think reverse mortgage is a bad idea? Today's reverse mortgage is not what it was before the crash. For all intense purposes, the reverse mortgage is just like a forward mortgage. When she passes away, you will have the opportunity to refi the property into a standard forward mortgage or sell the property to payoff the reverse mortgage.

With the equity she has the reverse mortgage can be easily setup and she can have a monthly income.