reverse mortgage basics
Dealing with Outside Debt
If you’re still paying on a forward mortgage or owe other money on your property, this may affect your ability to take out a reverse mortgage, because reverse mortgages are usually considered “first” mortgages and must hold first rights to repayment against your home. How can you resolve this issue?
- Use savings to pay off the old debt before you get a reverse mortgage.
- Pay off the old debt with a lump sum advance from your reverse mortgage.
- Check to see if your forward mortgage lender is willing to be repaid after the reverse mortgage is repaid.
Any of these strategies may work. Be aware: State and local government agencies are usually the only lenders who are willing to take a backseat on repayment or to“subordinate” their loans.