Mortgage Problems: What If Mom & Dad Can’t Make Their Payment?.
Mortgage Problems And Reverse Mortgages Available to those aged 62 and above, a reverse mortgage is a way to refinance a home and lower monthly cash costs.
They also pay $200 a month toward property taxes and homeowners insurance.
If the Starks refinance with a reverse mortgage, they can pay off their existing loan completely.
The reason they save $500 a month is that with a reverse mortgage, there’s no required monthly mortgage payment.
Starting balance: $300,000 Original rate: 4.5% Original payment: $1,526 After ten years: Remaining balance: $229,830 New rate: 4.0% New payment: $1,097 Refinancing frees up over $400 a month.
Increasing Equity Can Help The National Association of Realtors (NAR) reported that existing home prices in June were up for “the 64rd straight month of year-over-year gains.” Because property values have increased substantially in most areas, owners may have enough equity to refinance.
Streamline Refinances Allow Declining Credit If there’s the problem of little or no equity then parental borrowers might want to consider several options.
Those with FHA-backed loans can look into “streamline” refinances, arrangements where they can get a lower rate but avoid such application hassles as credit checks, asset and employment verifications, and home appraisals.
Family Help Rather than new financing or boarders, a better option may be family help, just giving Mom and Dad what they need each month.