A reverse mortgage is for the borrower, not the borrower’s children, says a Today Show segment this week in response to a reverse mortgage inquiry. In responding to a viewer question from a woman whose mother recently took out a reverse mortgage and wonders if she can now get out of the loan to maintain an inheritance from the home, Today’s financial experts including Jean Chatzky and Sharon Epperson say that it is up to the borrower, not the children or family members.
“My now-72-year-old mother took a reverse mortgage loan…” the viewer says, “and she now realizes she will be losing her home after she either can’t live there anymore or passes away, leaving her children without an inheritance.”
Chatzky reminds the viewer that her mother received counseling as a part of the loan process, ensuring she understood the consequences.
“When she took it out, she went through counseling. She knew what she was doing because you are mandated to go through counseling before you go through with [the loan],” Chatzky says. Further, though, the experts remind the viewer that she is not entitled to an inheritance from her mother’s estate.
“I have a problem with this notion that [the borrower] owes her daughter an inheritance,” Chatzky says.
“The reverse mortgage is for the parents, the person who takes it out. Not the child,” Epperson adds.
Written by Elizabeth Ecker