The answer is NO. If your parents decide to take out a Reverse Mortgage, you will never be responsible for paying any part of it back. Reverse Mortgages are Non Recourse Loans, meaning they can only be paid back through the sale of the property, or voluntary payments by the borrower.
I always urge children to sit down with your parents and discuss all your options when considering a Reverse Mortgage. Things such as if you plan on keeping the home, selling the home or even if you have no plans for the home. These are all important things to discuss so they don’t become a spontaneous surprise at the time of your parent’s passing.
Reverse Mortgages are financial tools that require a lot of decision making. Which one is right for your parents? How to take the money they qualify for? How much do they NEED versus how much do they QUALIFY for?
Once you have spent time educating yourself on the program, it will be easier to decide how to structure the loan to best suit your parent’s needs and lifestyle. Whichever way they decide to go, you will never have to worry about owing money on their home.
The only way you would have any financial responsibility, would be in the case that you wanted to keep the home after they pass away. You would naturally have to refinance the mortgage and take over payments yourself. Otherwise, you can simply walk away from the home if their was not financial gain such as from the sale of the property if the home was worth less than was owed.
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