How do reverse mortgages work for Veterans?

Proceed with CAUTION.
While there may be such "reverse loan" mortgages designed especially for veterans, the whole idea of Reverse Mortgages is very new and untested. If the home is paid off, but cash flow is a problem then there are many safer solutions than reverse mortgages. Before you take any action on this, please find a trustworthy financial adviser who is certified to advise seniors. You may have to pay a fee but it can save you lots of grief and financial disaster. Do not trust anyone who represents a Bank or Mortgage Firm--especially if their income is based on selling you these new untested financial products--even if they are "endorsed" by Veterans Organizations. As my high school math teacher used to say "Figures don't lie, but liars can figure"

I would be very careful about a reverse mtg. because people are very easily taken advantage of in that situation and the reverse mtg. company makes a nice little bundle. I also think your mother's estate would not benefit at all in that situation but maybe you're not concerned about that. If you Mom's home is paid off, it sounds like she wouldn't need a reverse mtg...... just a regular one - especially with the very low rates these days so that might be a better way to go. Just my opinion. I wonder if a local Veteran's Office could help you with that question also.... Good luck to you!

And one more note: with a reverse mortgage, repayment is not necessary as long as you remain IN the house. If your father had to be moved to a nursing home, what would happen then?

Talk to an elder lawyer about options.

my husband passed away he was a verteran and i we got our house thought the gi bill can i get a reverse mortgage

That's what my parents did to survive, a reverse mortgage. He's also a veteran but that doesn't play a part of their reverse mortgage, only how they bought their house in the first place.

I am a senior advocate and YES a REVERSE MORTGAGE can be a significant financial tool if used for the right reason. Not familiar with a specific VA REVERSE but the HECM is a FHA/HUD Reverse mortgage. There are many myths about what it is and before I believed ANYONE here I would check it out with competent people before I would make a decision. I know many people that are enjoying live much more having made to choice and I know a few that did it to speculate and they are not very happy.

Type your comments and experiences here.i would double and triple check. Us a reputable attorney.....if you can find one. ;0)

I was able to help my parents find the best reverse mortgage - this is a company which will compare the lenders and give you the best deal - simply search for reverse mortgage lenders direct .com they are not a bank so they are really helpful

At first I thought it was a horrible idea since we have had the home in our family now for many generations but after speaking to my lender they explained that my parents home be mine as long as I can pay off anything that the borrow. Im calculating that the home appreciation alone should cover over the interest costs so it is essentially a free loan for them - I'm glad that they now have more money for their retirement. This website helped my parents get a reverse mortgage

I think you have to be VERY careful with the reverse mortgage and very realistic as to what it means to take on debt later on in life. THE MORTGAGE, INTEREST AND ALL FEES MUST BE REPAID EVENTUALLY. All must be paid in order for the heirs can take possession of & own the home. If the heirs cannot pay off All the debt, the house will have to be sold. The one good thing about RM is that if the house is sold for below the debt, FHA will pay the difference if it is a federally backed RM. You may find that the interest and fees plus the mortgage is more than the elders can afford to pay OR that their kids who want to inhierit the house can repay. Please go over the agreement to see what the policy reads and your responsibility is.

If you do a RM, you're best bet is one that is FHA backed. There are RM that are privately funded and your consumer protection on those is limited.

If you do a RM there are 4 things that can be a problem for compliance and cause the RM to be due and payable in full:

- FAILURE TO PAY - property taxes, homeowners /flood/ wind insurance. One issue with RM is that often the homeowner - since the house is paid off - has let their insurance slide or is too low. So instead of the homeowner paying $ 300 a year for insurance, they now have to pay significantly higher rates because there is now a mortgage on the property. The RM will require this. Or instead of selecting your own insurer, the insurance is folded into the RM and uses insurers that the RM selects which can drive up the fees and costs. If you don't pay the taxes & insurance, etc., your mortgage can go into default and be foreclosed upon.
- MOVING TO A NEW RESIDENCE- if reverse mortgage property stops being your primary residence, you are out of compliance with loan. So if you move into a NH or AL or IL, you are required to pay your loan.

- BEING OUT OF THE HOME FOR MORE THAN 1 YEAR - the loan will come due. Most policies have this.

- ALLOWING THE PROPERTY TO DETERIORATE - being away for a while, like a trip or cruise is allowed but if the property gets run down while you are away, the loan could be called in. After Hurricane Katrina, some homeowners who had RM, got letters w/detailed questionnaire as to the status of the home, how it was being secured, status of repairs, utility information, how long until they were back in the house full-time.....this was all about calling in loans that were in areas with uncertainty. Also for many the insurance proceeds for damage went to the RM holder (as they are a lein holder an indicated on the policy) and the homeowner had to be reinbursed for repairs. And Katrina was in 2005 before the real estate market tanked and there were lots more banks doing RM. Not so now.

I think that RM can work for young 62-70 year olds that are in good health, have a home that they own outright, with a property value of 300K or more; do the RM as a line of credit with a variable interest rate; and that the property is in a neighborhood that will likely increase significantly in value over the next 10 - 20 years and they are committed to living in the home for those 10 - 20 years. So that the $$ owed for the RM & fees can be paid off in full from the sale of the house & perhaps the value has increased so that there is even money left.

Harold - realize that a RM has a rising balance and falling equity. The RM interest is compounded on a loan that does not involve months payments on interest and fees and principal. It is very expensive money that will HAVE TO BE REPAID if you all want to "have had the home in our family now for many generations".

Also the % of $ you can get is not 100% of the appraised value of the home, but depends on what RM program you do, like whether it's a monthly or annual adjusting HECM, or a Fannie Mae HomeKeeper RM.

If you do it, getting a lump sum payment is the most expensive way to do a RM.
Doing it as a line of credit with a variable rate is the least expensive way to go and only use what you need from the line of credit.

Look at the % of the fees to the value of the home. If it is 7% or more, that is high.

how would a reverse mortgage & 2nd home effect applying for NJ Medicaid & Veterans Aid? My father has "on-set dementia", getting worse by the second. He is 90yrs (lives by himself) & his girlfriend (11 yrs younger) have be taking very large sums of money from RM and transferring into their joint account to fund a 2nd home that they own with joint ownership. He does everything she tells him to do and signs anything but does not remember what he just did. We have retained a lawyer for guardianship. I have POA, but we need to get 2 doctor letters stating he has dementia in order to start the process. He is also on Alzheimer Medication from the Vets. The girlfriend also diverted his Vets Benefit from his personal checking account (which her name is also on) to a Joint Account. We have Doctor Appts made for him to be tested, but when we go to pick him up, he will not come because the girlfriend is upset and wants to "know why" we are taking him to the doctor. We have not told her that we are seeking guardianship. But I think she know something is up. I had my father sign a "direct deposit" form from the Vets to re-direct the Vets benefit back into his account. He did'nt even question what he was signing. She is also trying to get Medical Power of Attorney. Can she do that?
He agrees to anything she says. Any help or comments? Thanks

we live in a working mans neighbor hood of 1940 to 1980 homes. nice paved neighbor hood streets. City utilities and adaqute maintained yards. not fancy but clean. our house is paid off. our Real Market Value is $229000. We are thinking about a RM to use the Equitity to invest and to take vacations. We are retired. My wife is 67 and I am 70 with social security and a veterns disibility. Would a RM be adviseable for the purposes mentioned and who would be the best lender to contact?

We down sized too much and now need to move back to the area we moved from and it will cost us more per month but we are ready to do so just to "go back home" to the area we have our doctors and know people. What were we thinking to move out here I do not know........but having said that I am wondering taking on a larger mortgage later in life about a reverse mortgage after about ten years in the house. We have no one to leave it to that would want or care about the house we pick or the area so in that case is that a good idea for us? We will be going VA

Moso, a lot depends on how large of a down payment you will place on the house. Usually with a VA loan, there is no down payment or very little down payment so your will be paying each month mainly interest. In ten years, I don't think you would have enough *equity* to get a Reverse Mortgage. Check with a mortgage broker to run the numbers for you to get a better idea.

Is there such a thing as a VA Reverse Mortgage? What is the difference between that and a regular reverse mortgage?

Reverse Mortgage seems like a good idea for people that don't have children or don't have anybody to leave their property too. I'm not going to care what happens to anything I have once I'm dead.