How to Take Out a Reverse Mortgage on a Life Estate
Reverse mortgages can be granted to life estate owners under certain circumstances. A reverse mortgage can be paid back in time or the owner can choose to grant the lender ownership of the estate once the mortgage is finished. It is important to understand the terms of the reverse mortgage before agreeing to it.
- Locate a reverse mortgage company. You can check your local phone book for reverse mortgage company listings or search for a company online. Talk with a company representative to determine whether you and your estate are eligible for a reverse mortgage. The representative may need to ask you several questions about your estate and current financial situation.
- If you are not yet the legal owner of the estate, get a written statement of permission from the legal owner. You may need to go through an attorney to receive this statement and make it legal.
- Provide the reverse mortgage lender with as much information as possible about the estate. Estates are often complicated, and it is important for the lender to know as much as possible about the legal and financial conditions that apply to the estate. This will also make the lending process faster.
- Discuss the reverse mortgage conditions with a U.S. Department of Housing and Urban Development adviser. Anytime a reverse mortgage loan is approved for an estate, the owner must meet with a HUD advisor to make sure he understands the type of loan he will be getting. Many reverse mortgage lending companies have HUD advisers that work at the same site as the representatives.
- Be sure that you understand the conditions associated with the reverse mortgage. Once a reverse mortgage is in effect on an estate, ownership of the estate cannot be changed until the mortgage is finished or repaid.
- Choose if you would like to receive the money all at once, as a monthly payment or as a credit line. Most reverse mortgage companies will let you choose; others may only offer one option.