• Last Updated:
  • Apr 20th, 2010 9:21 pm
1 reply
Deal Addict
Aug 24, 2002
3569 posts
A reverse mortgage is sleight of hand... it's an overpriced loan mixed with overpriced insurance.

You say CHIP is "willing to help us out" but it's more likely you'd be the ones helping CHIP (to a lucrative profit.)

They lend an amount using the house as security. The loan accrues interest and fees. When your brother dies, the house gets liquidated to pay back the loan plus the interest plus their various fees and charges.

Your brother "qualifies" because at his age he's close enough to the statistical life span, so CHIP is confident that he won't live long enough that the loan plus interest and charges will exceed the value of their security.

What's the value of the house? Say it's $300,000, then your brother is giving up $150,000 in exchange for a few years of accommodations.

Considering home values are at probably the highest point of all time and they're heading WAY down any day now, I think you might be better off selling the house as fast as you can. Sorry to say it as there are probably emotions attached. But financially that's the hard truth.

You ask about the property transfer... you should consult a lawyer about that. Actually ask the lawyer about all of this.