I have paid taxes and insurance on the house. Payments on the reverse mortgage. I will be giving him $100,000 to make sure he doesn’t run out of money as he’s on SS. He owes $300,000 on the home. Should I put my name on the deed and refinance the reverse? Or put the house in a trust that it goes to me after he passes and continue to make payments? We want to make sure my investments are protected from my other siblings.
So it’s not a Reverse Mortgage but a Cash Out Re-Fi???
CashReFi are scary stuff & tend 2 b marketed to very undereducated or limited understanding of English homeowners. Go to Bogelheads if it’s this and read posts on them. If it’s this, imo y’all are screwed.
Now if it actually is a RM, RMs are all outflow….. owners over 65 living in their home, need $ so do a RM which either pays owner a $ over a set time or allows owner a draw off to a set $ amount. If owner had an existing mortgage, it gets paid in full, so only RM exists. Owners can live there “mortgage / rent” free till they die or do something not allowed under Terms required for the RM to exist. (Change could be… they move to a NH; they don’t pay property taxes; dont have required property insurance; don’t do maintenance or repairs)
RM not really designed for owner financially to re-acquire the home. RM lend plus interest & fees are such that paying everything owed + interest + fees is usually* not worth it. If a HUD backed RM, the owners or their heirs should be able to request a payoff settlement from the RM company. You should request this - if it’s HUD backed - & asap.
Mortgage companies and lenders are NOT going to blithely allow for anyone to change the title on an asset that is used for securitized lending. Whether regular mortgage, a RM, car loan, HELOC, etc. Doing this, can cause the lender to call in the loan, so due in full in maybe 30/60 days. Your parents RM agreement has in detail Terms & Requirements for the RM. You need to read and reread it. If you do not precisely understand it, get a Real Estate Attorney to review it with you. Personally I think you should do this & asap as you have been sending $ to the RM…. you want to see if basically that was a wa$te.
Giving 100k! I'm going to guess by what you wrote, that your parent(s) is/are poor with no real assets & income only is SSA $. If gifted 100K - as you posted - that $ is income the month received and an asset afterwards for them. If they are on or COULD BE ELIGIBLE for any income &/or asset based Federal or State program, that 100K has made them now ineligible. Plus could be tax issues.
Maybe you have the entrenched wealth to easily & routinely pay in the future 7-15K a month for years for each parent to be in a NH, and pay everything else for them right now (like paying their property taxes and paying all maintenance - like new roof- on that home, as that RM requires this from the owner) and pay for all till their level of care gets to the point they have spent down the 100K and are now best off in a place with 24/7 oversight. Fwiw I’ve been on this forum a long time…. folks who are truly wealthy do not come to this forum with questions…. they have people who have people who deal with these type of things for them. Really find both a Real Estate attorney and an CELA level of Estate Planning atty.
* if this is ancient RM, property value may MAY have increased enough that paying off RM + interest + fees and whatever else the RM sees fit to add, could be worth it. Elders in their 90’s. But you have to have all cash to pay RM off, in full and quickly.
You need legal choices and options here, and your post makes me very concerned that you may not fully understand here what you can do, what you cannot do, and the dire legal implications for wrong choices.
Best of luck. See an attorney ASAP.
It sounds like your goal is to become sole owner of the house after your father passes away?
But better to ask a local professional and not a global forum of anonymous randos with no accountability. You have no way to know if we're giving you sound financial advice. Talk to both a certified elder law attorney and a reputable financial planner. It will be worth the investment.
If so, take the reverse mortgage and your dad to see an attorney who is qualified to answer your questions.