Plus, the estate may be passed on to heirs, but the house would not, as it would have to be sold unless the beneficiaries can pay off the remaining debt with cash. If they are forced to sell the “family home,” there is also the cost of selling, like commissions, fees, etc.
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My house (tax appraised at $260k) is paid for and I have a clear title. As I understand the reverse mortgage thing, I would be paid monthly for a portion of the equity... until I’m no longer living there (whether I move or die)... and the firm providing the reverse mortgage attains ownership of the house.
The house would then not be passed on to my daughter and she would not be responsible for any costs from my estate for the house. ....I welcome any corrections to my understanding.
I’m not inclined to do a reverse mortgage, as I don’t need the money now. I’d rather leave the property to my daughter and let her sell it or move in, as she wishes.
They attain ownership of the equity owed back. For example, if you have a $300,000 house and get a reverse mortgage for $150,000, they now have a lien on the house for $150,000 of its value plus whatever interest is owed. Whatever is left after that goes to the beneficiaries, but they would be forced to sell or pay up due to the reverse mortgage’s lien on the home.